This article will explore and explain the two approaches circuit courts use when § 365(d)(3) of the Bankruptcy Code is at issue and will analyze the best approach in the context of COVID-related increase in commercial tenants’ bankruptcy claims. Specifically, this article will analyze how each approach affects the parties by explaining which party is protected at the different stages, and will explain what and when a tenant must pay a landlord. This article will then describe options each party could pursue at different stages in the bankruptcy and outline how each option affects the payment to the landlord. Lastly, this article will recommend courts adopt the proration approach as it is likely the best path for navigating COVID-related bankruptcies and the future.
COVID-19 and the Rise in Commercial Real Estate Bankruptcies: The Path to Reach the Goals of Bankruptcy Code §365(D)(3),
15 J. Bus. Entrepreneurship & L.
Available at: https://digitalcommons.pepperdine.edu/jbel/vol15/iss1/5