{"id":1004789922,"date":"2026-03-04T10:41:07","date_gmt":"2026-03-04T18:41:07","guid":{"rendered":"https:\/\/www.commercialsearch.com\/news\/?p=1004789922"},"modified":"2026-05-26T10:03:14","modified_gmt":"2026-05-26T18:03:14","slug":"do-you-have-a-pre%e2%80%91bankruptcy-playbook","status":"publish","type":"post","link":"https:\/\/www.commercialsearch.com\/news\/do-you-have-a-pre%e2%80%91bankruptcy-playbook\/","title":{"rendered":"Do You Have a Pre\u2011Bankruptcy Playbook?"},"content":{"rendered":"
\n
\"\"\n\t\t\t\n\t\t\t\t\n\t\t\t<\/svg>\n\t\t<\/button>
C. Knox Withers<\/figcaption><\/figure><\/div>\n\n\n

When an office or industrial tenant starts missing rental payments, landlords, investors and leasing teams hold their strongest leverage before a bankruptcy petition is filed. Once a filing occurs, the automatic stay freezes key remedies, and any surviving lease becomes property of the estate, shifting control to the bankruptcy court and the tenant-debtor. A disciplined prefiling playbook can protect cash flow, speed re-tenanting and preserve asset value.<\/p>\n\n\n\n

What really changes when bankruptcy is filed?<\/h2>\n\n\n\n

Understanding what happens on Day 1 of a bankruptcy helps frame pre-petition decisions.<\/p>\n\n\n\n

Automatic stay: <\/strong>The moment a petition is filed, most collection and eviction activity must stop unless authorized by the bankruptcy court. The stay protects both contractual lease rights and the tenant\u2019s possession. Intentional violations can result in damages and attorneys\u2019 fees. <\/p>\n\n\n\n

Ipso facto clauses<\/strong>: Lease provisions that treat bankruptcy itself as a default are known as ipso facto <\/em>(i.e., by the very fact or act) and are generally unenforceable. Boilerplate \u201cbankruptcy = default\u201d language will not save a weak pre-petition strategy.<\/p>\n\n\n\n

Ongoing obligations:<\/strong> To keep the space, a debtor must pay post-petition rent on time and cure monetary and curable nonmonetary defaults to assume the lease. Courts vary on how quickly cure must occur, but delays are not indefinite. Charges that accrued pre-petition\u2014such as year-end reconciliations billed later\u2014are usually treated as pre-petition debt while true post-petition charges qualify as administrative expenses.<\/p>\n\n\n\n

Guarantors: <\/strong>The automatic stay typically does not protect nondebtor guarantors. Personal or affiliate guarantees remain a significant pressure point even after a tenant files.<\/p>\n\n\n\n

\n\n\n\n
\n
\n
\n
\"\"<\/figure>\n<\/div><\/div>\n\n\n\n
\n

CPE Capital Markets Newsletter<\/h2>\n\n\n\n

Executive Editor Therese Fitzgerald delivers the capital markets intel that moves the needle.<\/p>\n<\/div><\/div>\n<\/div><\/div>\n\n\n\n

\n \n \n \n \n \n\n