Creditors’ Rights 10
A: The new law, which takes effect in October, tightens up this area of leasing in favor of creditors’ rights.
Section 364(d)(4) “tightens the reins” on debtors in favor of lessors of non-residential properties. It states that the debtor must immediately surrender the property to the lessor if an unexpired lease is not assumed or rejected by the earlier of: 1) 120 days of bankruptcy filing or 2) when the reorganization plan is confirmed. Under the old law, the debtor was required to take action, but the guidelines weren’t as strict. So, if you own commercial property that you lease to tenants, the changes give the law (and you) more “teeth.”
