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Commercial Litigation Landlord Tenant Law Litigation

Cash Flows for Commercial Leases During COVID-19

To say the least, for those companies that filed for bankruptcy on the eve of the COVID-19 shutdowns, the strategies — and available cash flows to pay landlords — did not go as planned.

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Where feasible, companies do not file Chapter 11 petitions until after formulating both an exit strategy and plans to operate during the pendency of the bankruptcy case. For restaurateurs and retailers, this strategy will almost invariably require and depend upon cash flow for continued use of leased stores and restaurants. Planned Chapter 11 budgets must take this into account as landlords are entitled to full rent for the post-petition use of their property. To say the least, for those companies that filed for bankruptcy on the eve of the COVID-19 shutdowns, the strategies — and available cash flows to pay landlords — did not go as planned.

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