Spencer Fane Ryan Hardy recently published an article featured in ABI’s Bankruptcy Litigation Committee blog discussing rent disputes caused by the pandemic.
Titled “Litigating the Nonpayment of Rent due to the Coronavirus,” the article explains two common issues that arise in rent payment legal matters: the impact of force majeure provisions in the lease documents and the discretion of bankruptcy courts to order the deferment of rent payments.
Ryan describes three provisions relating to rental proceedings, noting the pandemic-induced challenges. “As with most matters impacted by the coronavirus, a debtor’s nonpayment of rent is not a simple one to address. Current market realities mean that it is rarely prudent, either for the lessor or the tenant, to litigate nonpayment of rent rather than reach an agreement,” Ryan explained in the article. “[W]hen an agreement is not in the cards, it is time to pay close attention to the lease’s force majeure provision and the terms of § 365(d).”
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