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Commercial Litigation Landlord Tenant Law Litigation

Pros and Cons of Master Leases

Section 365 of the Bankruptcy Code grants debtors the ability to assume or reject any executory contract or unexpired lease. Debtors must assume or reject a lease in its entirety and are not free under Section 365 to assume only favorable provisions of a lease. Courts, however, have consistently held that they will not find a multi-property master lease to be a unitary lease merely because such properties are demised in a single document.

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Section 365 of the Bankruptcy Code grants debtors the ability to assume or reject any executory contract or unexpired lease. Debtors must assume or reject a lease in its entirety and are not free under Section 365 to assume only favorable provisions of a lease. See, In re Village Rathskeller, Inc., 147 B.R. 665, 671 (Bankr. S.D.N.Y. 1992). Courts, however, have consistently held that they will not find a multi-property master lease to be a unitary lease merely because such properties are demised in a single document. See, e.g.In re Buffets Holdings, 387 B.R. 115, 120 (Bankr. D. Del. 2008).

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