Bankruptcy & Litigation Series: #5 Eviction - Landlord Bankruptcy

The tenant will receive a notice of bankruptcy.  A landlord can elect to assume (i.e., keep) or reject (i.e., end) a lease per 11 U.S.C. s. 365.

If the debtor-landlord elects to reject the lease, the terms of the lease can be administered by the trustee.  If the debtor assumes the lease, his financial obligations to the tenant must be either current, or in the case of a debtor in possession, must provide adequate assurances (in the form of money) that he can continue to afford his maintenance of the lease obligations.  Otherwise, the lease is deemed rejected.  If a tenant will be displaced by a debtor-landlord, he should file a proof of claim for his damages, and will be compensated pro-rata in the event that there are any bankruptcy assets.