June 15, 2022

Assume, Assign, Reject: What Happens to a Commercial Lease in Bankruptcy?

Written By

Amelia M. Adams
Member, Stoll Keenon Ogden PLLC

Commercial leases play a critical role in virtually every sector of the American economy. Leased real estate houses businesses of all shapes and sizes, and leased equipment runs small copy rooms, massive construction projects, and everything in between. Recognizing the importance of leases to business operations, the United States Bankruptcy Code includes a statutory scheme gov­erning leases. While involvement in a bankruptcy may seem a remote possibility for many attorneys, the widespread import of leases in the business community underscores the need for counsel to have a working familiarity with the Code’s treatment of leases before a bankruptcy notice crosses their desks. Bankruptcy cases – especially business cases – often move quickly, and knowing the lay of the land at the outset can be invaluable to counsel and client. Through this article, counsel will gain an understanding of mile­stones that lessors of commercial real estate or equipment should consider when a lessee is a debtor in a chapter 7 or 11 business bankruptcy case.


Written By