The transition to online shopping, interest rate increases, labor costs, maturing debt and rising inflation have collectively taken a significant toll on the retail industry, contributing to store closures and a growing number of bankruptcy filings by retail companies in recent years. Nearly 30 retailers sought bankruptcy protection in 2023. Some retailers have even filed for bankruptcy twice.
Real estate leases play a significant role in a retailer’s bankruptcy process. Commercial leases, as executory contracts, are subject to the U.S. Bankruptcy Code. While the Bankruptcy Code does not explicitly define “executory contract,” most courts have adopted the definition as “a contract under which the obligation of both the bankrupt and the …
Read the full article at: https://www.jdsupra.com/legalnews/the-real-estate-and-corporate-1204791/