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socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 37804
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
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In a chapter 11 bankruptcy, we need to assume the lease for

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In a chapter 11 bankruptcy, we need to assume the lease for our office location. Can the landlord require that we pay any unpaid prepetition rent even if we are current with post petition rent as a condition to assume the lease? I thought all pre petition amounts were paid through the Chapter 11 plan, including unpaid pre petition rent.

A debtor in possession (DIP) must promptly pay both pre and postpetition rent arrearages and cure certain other pre and postpetition defaults as a condition of assuming an unexpired lease or executory contract. 11 USC § 365(b)(1)(A).

So, while lease payments are provided for by the plan, absent a negotiated settlement on a reduced lease payment with the creditor, you must bring the lease current as a prerequisite to assumption.

Hope this helps.
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