A bankruptcy filing by an office or retail tenant presents a number of challenges for the landlord. Baker Donelson has substantial experience navigating this process and regularly protects the landlord's interests when a tenant files for bankruptcy protection. Prompt and effective actions in the bankruptcy court can minimize risk, and our teams of bankruptcy, commercial restructuring and real estate attorneys have assisted landlords in handling all aspects of these fast-moving cases, including:
- Pre-bankruptcy enforcement of lease provisions in a defaulted lease.
- Protecting a lessor's interests in connection with proposed terms of going-out-of business sales.
- Obtaining post-bankruptcy filing rent, including pro rata "stub" rent for the month of the bankruptcy filing.
- Negotiating amendments to existing leases.
- Responding to a lessee's efforts to assign a lease notwithstanding provisions in the lease prohibiting its assignment.
- Negotiating and documenting the terms of the assignment of leases to a new tenant, including obtaining additional security.
- Addressing issues related to a lessee's rejection of a lease, including surrender of premises, assertion of claim for breach of lease, and re-letting space to new tenant.
- Operational issues that may arise during bankruptcy proceedings.
- Obtaining the return of a security deposit or draw on letter of credit.
- Asserting claims for payment defaults that preceded bankruptcy filing and for damages arising out of rejection of lease during bankruptcy.
- Leasing space to new tenants following the surrender of space during bankruptcy proceedings.
Our attorneys have protected the rights of commercial and retail landlords in bankruptcy proceedings in courts across the country. We have assisted retail landlords in bankruptcy matters involving leases in retail locations ranging from big box retailers, shopping malls, pad sites, food courts, street-level retail in mixed-use properties and flagship stores in historic urban locations. We have also represented office landlords for locations ranging from portions of a single floor to leases exceeding 100,000 square feet for the headquarters of a multinational corporation.
In every case, we recognize that our clients' primary objectives are usually to collect rent when the tenant remains on the premises, and to recover possession of the space when the tenant is no longer paying rent. We have an established track record of achieving these objectives in a cost-effective manner.
Some representative bankruptcy cases include:
- Radio Shack – Delaware
- Circuit City – Virginia
- Filene's Basement – Delaware
- Winn Dixie – Florida
- Service Merchandise – Tennessee
- Hollywood Video/Movie Gallery – Virginia
- Coldwater Creek – Delaware
- Grubb & Ellis – New York
- Regal Cinemas – Tennessee
- Footaction – New York
- Ritz Camera – Delaware
- State Stores – Texas
- Calumet Photographic – Illinois
- Olsson's Books and Records – Maryland
- Corinthian Colleges – Delaware
- Cosi – Massachusetts
- ITT Educational Services – Indiana
- Golfsmith – Delaware