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 an executory contract or lease of nonresidential real property (that does not exceed the amount due prior to March 13, 2020 under the executory contract or lease terms ) is protected from a claw back under the preference statute — so long as it does not include fees, penalties, or interest imposed after the March 13, 2020 payment deferral agreement, or include payment defaults assessed prior to March 13, 2020.

For suppliers or landlords to obtain the benefits of these protections, the parties must have:

  1. entered into an executory contract or lease;
  2. amended the contract or lease after March 13, 2020; and
  3. the amendment must have deferred or postponed payments otherwise due under the contract or lease.


By Published On: January 11, 2021Categories: BankruptcyTags: ,


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William L. (Bill) Siegel is a Shareholder and Section Head of the Cowles and Thompson Bankruptcy and Creditors’ Rights Practice Group as well as a member of the Corporate and Business Practice Group. His experience includes representing individuals and business entities in their corporate and transactional affairs, including drafting and negotiating agreements of all types, and representing individuals and business entities in disputes that may arise in litigation in State and Federal Courts. He also represents debtors, creditors, Trustees, and Committees in bankruptcy matters in Chapter 7 liquidations and Chapter 11 reorganizations. His clients include small and medium-sized businesses, start-up technology companies, and partnerships. He frequently publishes articles and content regarding trends in bankruptcy law, the economy, commercial real estate, and retail-related matters.