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Landlord Tenant Law Litigation

Bankruptcy Court Opens Door for Tenants to Assume Leases After a Pre-Bankruptcy Eviction Warrant

A recent decision in a Chapter 11 bankruptcy case in the U.S. Bankruptcy Court for the Southern District of New York highlights the significant impact that a 2019 amendment to the New York Real Property and Procedures Law will have on future disputes in bankruptcy cases where the tenant files for bankruptcy after the issuance of a warrant of eviction but before its execution.

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A recent decision in the Chapter 11 case of Payam, 642 B.R. 365 (Bankr. S.D.N.Y. Aug. 10, 2022) by Chief Judge Martin Glenn of the U.S. Bankruptcy Court for the Southern District of New York highlights the significant impact that a 2019 amendment to the New York Real Property and Procedures Law (RPAPL) will have on future disputes in bankruptcy cases where the tenant files for bankruptcy after the issuance of a warrant of eviction but before its execution. With the deletion of just a few words from RPAPL §749(3), the 2019 amendment opens the door for tenant-debtors to assume leases even after a pre-bankruptcy warrant of eviction has been issued, without the need for the tenant to first vacate the warrant of eviction.

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