- With tenant closures and lease defaults on the rise in the wake of the economic downturn caused by the COVID-19 pandemic, tenant bankruptcy filings are a major concern for landlords across the real estate industry.
- As courts of equity, bankruptcy courts not only consider the specific facts and circumstances of each case but also, because of the overriding goal of reorganization in bankruptcy, may subordinate other legal rights and policies.
The Financial Accounting Standards Board (FASB) issued proposed amendments on June 26, 2013, to provide guidance about management's responsibilities in evaluating a company's going concern uncertainties in addition to the timing and content of related footnote disclosures. Even before a company’s liquidation is imminent, there may be uncertainties about a company’s ability to continue as a going concern and, therefore, about its going concern presumption (going concern uncertainties). Currently, there is no guidance in the U.S.
Commercial lessors have long enjoyed certain individualized protections under section 365 of the Bankruptcy Code. The Third Circuit’s recent decision in In re Goody’s Family Clothing, Inc., __ F.3d ___, 2010 WL 2671929 (3d Cir. June 29, 2010), makes it clear that commercial lessors also can take advantage of the more general protections available to creditors to obtain payment for goods and services they provide to a debtor after it files for bankruptcy where the specific protections are not applicable.
Section 365(d)(3)