Under Section 365(h) of the Bankruptcy Code, where a debtor, as lessor, rejects a lease, the debtor’s contractual obligations under the lease generally disappear. However, the non-debtor tenant may elect to remain in possession of the premises as long as it continues to perform its obligations under the lease. In apparent contradiction to the possessory rights of a non-debtor tenant under Section 365(h), Section 363(f) of the code allows a debtor to sell its assets, including real estate, subject to a lease, “free and clear” of “liens, claims and encumbrances.”
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