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Bankruptcy Landlord Tenant Law Litigation

Resolving the Competing Desires of Buyers and Tenants In Bankruptcy

A Tension Between §§363(f) and 365(h)

How do bankruptcy judges resolve the competing desires of buyers and tenants? Must buyers bid for property knowing that tenants might have the right to stay if their leases are rejected? Are tenants in jeopardy that they might have to move elsewhere to live or work?


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Chapter 11 cases take less time from start to finish than they did 10 to 15 years ago. Companies often don’t file these days to stay in business but to sell assets and liquidate. Sometimes the key assets are buildings where people have their homes or businesses sell their goods. Buyers will want to update buildings they purchase to attract new tenants who can pay more than current ones. But current tenants might want to stay where they are and not move.

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