The long term implications of the pandemic caused by COVID-19 and the resulting unprecedented drastic actions by state and municipal governmental entities in issuing “stay at home” and “shelter in place” orders has yet to be determined, but the short term effects are unfolding each day. Certain sectors of the economy have been effectively shut down. And the incredible disruption to the retail sector is obvious when one drives down main street or past a mall.

How bankruptcy courts address the goals of Chapter 11 under these circumstances has presented a huge challenge. In any retail proceeding, the obligations of a debtor to timely perform its post-petition obligations under the store leases is clear. But what happens during a global pandemic? The issue was recently addressed by the U.S. Bankruptcy Court for the Eastern District of Virginia in In re Pier 1 Imports, Case No. 20-30805-KRH (May 10, 2020), where the court was requested to allow the debtors to defer payments of post-petition rent for store locations. The court granted this request, and permitted the Pier 1 debtors to defer post-petition rent at many locations.