Will Terminating Tenant Interests Unlock Value?

September 2012Articles Journal of Corporate Renewal

Court decisions in the 7th Circuit and in New York allow a debtor/trustee to pursue a sale of real estate under Bankruptcy Code Section 363(f) free and clear of all interests, including leasehold interests, which may maximize the value of the sale of property by eliminating the occupancy rights that a tenant may assert under Section 363(h). Such sales, however, give rise to a number of considerations, including notably, claims by tenants holding those leasehold interests.

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