Can a Greenpoint Small Business Keep Its Store Lease in Bankruptcy?

Compare the lease, rent ledger, default notices, cure periods, and court orders. A rent demand alone does not necessarily terminate the tenancy. Check whether the landlord complied with contractual notice requirements and whether the time to cure expired.

Under 11 U.S.C. § 365(c)(3), a nonresidential lease terminated under applicable nonbankruptcy law before the order for relief cannot be assumed. Review the commercial lease agreement and any disputed termination before filing.

Section 362 generally stays collection and eviction actions but does not revive terminated leases. Section 362(b)(10) excepts certain possession actions when a nonresidential lease expires by its stated term. A landlord may also seek relief from the automatic stay.

Under § 365(b)(1), assumption generally requires curing defaults or assuring prompt cure, compensating qualifying monetary losses, and providing adequate assurance of future performance. Statutory exceptions apply.

Compare the landlord's cure demand with payment records, including additional rent, taxes, and other charges. Identify disputed amounts before accepting a calculation. Forecast rent, payroll, inventory, taxes, and insurance against expected cash receipts, accounting for when payments become due.

Section 365(d)(3) generally requires timely performance of post-filing lease obligations until assumption or rejection. The court may extend certain obligations arising during the first 60 days for cause, but not beyond day 60.

Under § 363, using cash collateral generally requires consent from interested secured creditors or court authorization. Check whether bank accounts, receivables, or their proceeds are subject to security interests. Identify restricted funds in the business reorganization budget before relying on them for rent.

The company's automatic stay generally does not protect an owner who separately guaranteed rent. Bankruptcy or lease rejection does not automatically eliminate that person's contractual obligations.

Review the guarantee's scope and applicable defenses. Compare continued occupancy with relocation, equipment removal, and closure costs to determine whether keeping the premises is financially practical.

Under § 365(d)(4), an unexpired nonresidential lease is generally deemed rejected if it has not been assumed or rejected by the earlier of 120 days after the order for relief or entry of an order confirming a plan. A voluntary filing generally starts that period.

For cause, the court may grant an extension of up to 90 days on a timely motion. Further extensions require the landlord's prior written consent. Calendar the deadline early to allow time for cure disputes and court approval. Deemed rejection requires immediate surrender of the premises.

Assumption requires court approval and compliance with applicable cure and future-performance obligations. Rejection generally constitutes a breach and may create a landlord claim. Ordinary rejection should be distinguished from the immediate-surrender rule following deemed rejection under § 365(d)(4).

The proposed treatment should fit the Chapter 11 bankruptcy plan and financial projections.

For a case properly filed in the Eastern District of New York (EDNY), Local Rule 1002-1 designates a debtor with a Kings County address for Brooklyn.

The court is located at 271-C Cadman Plaza East, Suite 1595, Brooklyn, NY 11201-1800. Attorneys generally file through CM/ECF.

Local Rule 1007-4 generally requires a Chapter 11 debtor's affidavit accompanying a voluntary petition. It addresses business operations, significant creditors, leased premises, and projected 30-day cash receipts and disbursements. Specified waiver provisions apply.

Outside a reorganization plan, Bankruptcy Rule 6006 generally governs motions to assume, reject, or assign leases. Required parties must receive notice, including the landlord and United States trustee where applicable.

Prepare the lease, amendments, default notices, proposed cure calculation, and financial records supporting future performance.

EDNY Local Rule 6006-1 requires a timely hearing-date request for assumption. If the hearing falls after the applicable deadline, the rule provides a procedure for seeking a temporary extension through a proposed order when its conditions are met. A pending motion is not an approved extension.