This article appeared in The Bankruptcy Strategist, featuring the strategies and techniques devised by the country’s top bankruptcy lawyers and reports on innovative procedural techniques, legislative developments and recent judicial rulings — plus what they mean for you and your clients.
The Bankruptcy Code provides a Chapter 11 debtor a powerful tool to aid its restructuring efforts. A debtor may assume valuable real estate leases, and reject onerous ones. As explained below, a debtor’s time to assume commercial leases under which it is a lessee is limited to either 210 or 300 days from the date of the bankruptcy filing, unless the landlord consents to further extensions. The Bankruptcy Code further provides that a debtor’s failure to assume a commercial lease before expiration of this time limit results in the lease being “deemed rejected,” requiring the debtor to surrender immediately possession of the leases premises.