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Who Wins in Bankruptcy – the Lessee or the Purchaser?

May 17, 2022

You represent a Chapter 11 debtor that wants to sell its property free and clear of its tenant’s possessory interest. The tenant wants to retain its rights for the rest of the lease. You need to figure out whether the debtor can extinguish the rights of the tenant through a sale under Section 363(f) of the Bankruptcy Code. The Fifth Circuit recently weighed in on this question.


Related Content

  • Bankruptcy Risks in Subleasing
    Read this practice note for a discussion of the risks to sublessees, sublessors, and overlandlords when another party to a sublease or overlease files bankruptcy.

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