Delaware Bankruptcy

When can a landlord recover attorneys’ fees from a tenant in bankruptcy?

03/16/15

Landlords may be able to recover attorneys’ fees incurred when a debtor-tenant seeks to assume the lease, or assume and assign the lease to a third party.  To recover attorney’s fees, however, the landlord must meet several criteria.  First, the lease must expressly state that the landlord is entitled to recover attorneys’ fees as additional rent or in connection with the collection of rent.

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CPI Preference Actions – Pretrial Conference Scheduled

03/10/15

As detailed in this prior post, on February 6, 2015, Charles A.

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How does a landlord recover its administrative rent claim?

03/09/15

Section 365(d)(3) of the Bankruptcy Code requires the debtor-tenant to “timely perform all the obligations …. under any unexpired lease of nonresidential real property” until such time that the tenant assumes or rejects the lease.  If a tenant files for bankruptcy and remains in possession of the property, yet fails to pay rent as provided for under the lease, the landlord should consider filing a motion for an administrative claim.

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What are the landlord’s rights when the tenant assumes and assigns the lease to a third-party?

03/03/15

In conjunction with assuming the lease,  the Bankruptcy Code allows the debtor-tenant to assign the lease to a third party.  The party who is assigned the lease must provide the landlord with adequate assurance that it can meet the financial obligations of the lease.  If the party who is assuming the lease cannot provide the landlord with adequate assurance,  the landlord has cause to object to the assignment.

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What are the landlord’s rights when the debtor-tenant decides to assume the lease?

02/23/15

Assumption of the lease is permissible even if the terms of the lease expressly prohibit assumption.  Section 365 of the Bankruptcy Code requires a debtor-tenant to meet certain criteria in order to “assume” a lease.  First, and most importantly, the tenant must cure any and all existing defaults, both monetary and non-monetary.  Second, the debtor-tenant must provide “adequate assurance” to the landlord that the debtor will be able to perform under the lease going forward.  The tenant’s obligation to cure defaults includes the payment of late charges or similar charges that arise under the

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What are a Landlord’s “Rejection Damages?”

02/16/15

If the debtor-tenant seeks to terminate and surrender the lease, that is “reject it”, the landlord may be entitled to a “rejection damage” claim.  A landlord is not entitled to the full amount of unpaid obligations for the balance of the lease.  Instead, Section 502(b)(6) limits the recovery a landlord may receive for “rejection damages.” Under Section 502(b)(6) of the Bankruptcy Code, the landlord is entitled to rent due under the rejected lease for the greater of (i.) one year’s rent, or

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A Default is a Default, no Matter the Size?

02/01/15

In an 11 page opinion issued January 30, 2015 in the TPOP bankruptcy (13-11831), Judge Shannon held that GM did not lose the ability to enforce its contracted right to repayment just because the default was “immaterial” according to the Debtor.  The Opinion is available here.

Background

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Capital Leases in Bankruptcies – A Lesson from Xchange Technology Group

01/03/15

In a  9-page opinion released December 30, 2014 in the Xchange Technology Group bankruptcy (Bank. D. Del.

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Egenix, Inc. First Day Hearing Scheduled for January 6, 2015

01/02/15

There have been several developments in the Egenix, Inc. (“Egenix” or “Debtor”) bankruptcy case pending in the District of Delaware.  To review the initial article posted about this bankruptcy action on December 28, 2014, click here.

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Egenix, Inc. files for Bankruptcy in Delaware

12/28/14

On December 28, 2014, Egenix, Inc. filed for bankruptcy with the United States Bankruptcy Court for the District of Delaware.  As of today’s date, the only document filed with the Court in this action is the petition itself.  According to the petition, Egenix has $500,000 to $1 million in estimated assets, and $1 million to $10 million in estimated debts.

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