Temporary Extension of Time for Debtor-Tenants to Decide Whether to Assume or Reject Certain Leases
On December 27, 2020, President Trump signed into law the Consolidated Appropriations Act of 2021 (CAA). The CAA includes a temporary extension for debtor-tenants to assume or reject certain leases. Section 365 deals with the assumption and/or rejection of residential and non-residential leases when a debtor files bankruptcy. Section 365(d)(4) [...]
The Effect of the COVID Act on the Bankruptcy Preference Laws
The “Consolidated Appropriations Act, 2021” (“COVID Act”) effective December 27, 2020 amends Section 547 of the Bankruptcy Code and protects suppliers and landlords through agreement to defer payments made after March 13, 2020. Specifically, an agreement entered into on or after March 13, 2020 to defer or postpone payments under [...]
Commercial Landlord Tenant Issues in Bankruptcy — Especially During the Pandemic
Introduction Commercial tenants are defaulting at a faster rate due to the pandemic. But whether we are in a pandemic or not, commercial landlords need to know what to do if their tenants file bankruptcy be it Chapter 7 (liquidation) or Chapter 11 (reorganization). In this regard, the landlord [...]
UPDATE: COVID-19, Business Interruption, and Insurance Coverage
A recent opinion, Urogynecology Specialist of Florida v. Sentinel Insurance Company, LTD., (M.D. Fla. Sept. 24, 2020) 6:20-cv-1174-ORL-22EJK, sheds light on approaches to COVID-19 and the 2020 Shutdown -- and the impact to business. The United States District Court for the Middle District of Florida refused to dismiss a COVID-19 [...]
Contractual Obligations, Force Majeure, and COVID-19
At this point it is premature to determine how Texas courts will decide the breadth and applicability of a force majeure clause related to COVID-19 . That said, do not expect courts to allow a party to invoke force majeure if the event was not specifically identified and especially [...]
The Necessity for Co-Tenancy and Other Related Clauses
The retail apocalypse began long before COVID-19 . With many retailers already over-leveraged and shopping patterns changing, retailers were already shuttering stores, seeking a reduction in rent and/or filing bankruptcy. Afterall, many major retailers including anchor tenants like Sears, had already filed bankruptcy. COVID-19 has merely sped up the process. [...]
Bankruptcy Usage of Key Employee Retention Plans and Key Employee Incentive Plans
Introduction Creditors in mega-bankruptcies and people in general are up in arms over the ridiculous bonuses companies are giving their “key” employees and executives -- styled as “retention bonuses.” Pre-Bankruptcy Retention For practical reasons, companies facing financial uncertainty need to retain key employees. Therefore, the Bankruptcy Code enacted a [...]
Bankruptcy Courts Allow Business Debtors to Defer Rent in Response to COVID-19
In re Pier I Imports Inc., 20-30805 (Bankr. E.D. Va. May 10, 2020) At least one bankruptcy court has crafted a remedy not otherwise addressed prior to the Coronavirus outbreak. For instance, the bankruptcy court overseeing the Pier 1 Imports bankruptcy case allowed Pier 1 to temporarily defer rent owed [...]
COVID-19 and the Plight of the American Movie Theater
Americans have been going to the movies for more than a century, but for the first time in recent history, theaters are closed, and even if they open in the foreseeable future -- the audience may be limited. With this in mind, many of our treasured movie theaters are [...]
The Case Study of Neiman Marcus and the Fate of Other Department Stores
While the notorious fashion icon, Neiman Marcus, may be the first among retailers to succumb to the economic impact of COVID-19, the virus was only the final straw in a long financial journey – a plight facing many retailers in the past 2-3 years. Background Many of our well-known [...]
