Page 8 - NBIZ October 2021

Commercial

Landlord’s

Guide to

ADMINISTRATIVE

CLAIMS

By Angeline Vachris Kell and Stacey L. Kremling

here are two types of automatic stay that stops all creditor obtain possession of the leased space
claims that commercial actions against the debtor and the or exercise control over the premises
landlords need to property of the bankruptcy estate. of the estate stays. In other words,
know in regards to a landlord could face penalties from
bankruptcy. There The Automatic Stay Stops All enforcing, collecting, or recovering
Tare ubiquitous proofs Actions Against the Tenant under past due rents or attempting to evict a
of claims for secured or unsecured 11 U.S.C. 362 tenant in bankruptcy.
claims and administrative claims. At the commencement of a bank-
Administrative claims are requests ruptcy, the landlord should be aware Proofs of Claim and
for necessary costs and expenses of that the filing triggers the automatic Rejected Leases
preserving the bankruptcy estate. stay, which bars all actions taken by After the bankruptcy is filed, a
These administrative claims may creditors against the tenant/debtor. notice will inform the creditors of the
include post-petition rent payments. Under Section 362 of the Bankruptcy timing to file proofs of claims. If the
First, it is necessary to address Code, any attempts by a landlord to debtor is a tenant, then the debtor will
the automatic stay. Any general enforce, collect, or recover a claim also decide to reject or assume the
information on bankruptcy should from the debtor is stopped by the executory contracts including com-
also include a reminder about the automatic stay. Further, any act to mercial leases. If the debtor rejects

8 NBIZ ■ October 2021