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After the signing of the lease, the last thought entering the landlord's consciousness is that its new tenant is going to file for bankruptcy protection during its tenancy. In the beginning stages of the relationship between landlord and tenant, there is a brief period of shared optimism about the future and the joint prosperity that the new union is bound to offer.

Bankruptcy presents a unique forum for a cash-strapped debtor to sell otherwise unassignable and unprofitable leases to third parties, for immediate cash, and free of liens, certain contract restrictions, certain transaction costs, and future liability. While the bankruptcy arena offers unique opportunities, it poses special risks. The primary players in a bankruptcy lease sale scenario are the debtor, the prospective buyers, and the landlord. A debtor's goal is getting as much value as fast as possible for its creditors. A prospective buyer wants to pay as little as possible, with sufficient due diligence, and have an unassailable sale with whatever lease modifications are necessary for it to remodel and reopen. A landlord's objective is timely lease compliance and a financially and operationally sound buyer. Each party can benefit from following these four basic rules of bankruptcy lease sales.

Since its enactment in 1978, the Bankruptcy Code has provided a means for debtors either to reorganize their financial affairs or to liquidate their assets. Within this framework, bankrupt tenants have often utilized the provisions of the Bankruptcy Code to the detriment of landlords, and landlords have increasingly become either involuntary creditors or financiers during a bankruptcy case or have suffered some type of unexpected loss.

The United Air Lines bankruptcy case has spawned several reported decisions, at the bankruptcy court level, the district court level and the circuit court level.

Highlights of the latest commercial leasing cases from around the country.

When considering a new lease for a single use property, generally the tenant of the property will want to consider its "exit" strategies at the time of the initial negotiation of the lease. Potential "exit" strategies may include: assignment of the lease, early termination rights and options to purchase the property. The last on the list of these "exit" strategies, options to purchase the property, often creates substantial business issues for the landlord and tenant, as well as drafting issues for their legal representatives. As a result, certain conceptual issues, set forth and discussed below, should be addressed when drafting an option to purchase the property.

The work letter that is attached to a lease, particularly an office lease, is a very important part of the lease document. Because it is an exhibit, and because many leasing professionals are not especially well versed in construction issues, the work letter is frequently given little attention during a lease negotiation.

Is the landlord's right to cure a defect in the premises a perpetual one? The answer depends on where you are, what your lease says, and whether you have documented complaints and repairs adequately.

Highlights of the latest equipment leasing news from around the country.

Ever since the Medici family of Florence popularized the use of written documents to facilitate trade between city states and nations in the 15th century, letters of credit and their progeny, bills of lading, warehouse receipts and similar instruments of title, have consisted of written documents. Commercially effective and reasonably efficient for hundreds of years, letters of credit and documents of title in tangible form have become increasingly outmoded because of economic and temporal constraints. A recent article in <i>The Wall Street Journal</i> estimated that at least 5% of the cost of all international trade transactions was attributable solely to the cost of documentation [Gabriel Kahn, "Financing Goes Just-in-Time," <i>The Wall Street Journal,</i> June 4, 2004, Section A, p. 10]. With the growth of international trade and the relocation of manufacturing from industrialized nations to countries with cheaper labor costs, international shipments have increased dramatically as cost-conscious businesses search for increased efficiency. The historic standard of a 2-week turnaround for a written letter of credit for a secured bill of lading transaction and the cost of associated paperwork have created a need for a cheaper, faster system. Not surprisingly, merchants have found opportunities to use the Internet and other electronic arrangements to help solve this problem. This article will describe some of the alternative electronic bill of lading arrangements that have arisen since the 1990s for shipping goods internationally and the impetus that their spread provided to a Uniform Commercial Code working group that responded by overhauling and updating Article 7 to make it more reflective of modern trade practice.