The good news for party-goers and tenants: Thanks to a recent decision from the Ninth Circuit Court of Appeals, a popular nightclub in historic downtown Los Angeles will remain open notwithstanding.
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Those who lease commercial property may find themselves
unwilling participants in complex proceedings before the U.S.
bankruptcy courts when a tenant files bankruptcy. Meanwhile, the
lease becomes an asset among the property of the estate
of the debtor, and the automatic stay imposed by U.S. Bankruptcy
Code
1 serves to halt all collection and eviction
activity in their tracks.
In light of the fast-pace of many Chapter 11 reorganizations,
often involving going-concern sales, it is imperative that a
landlord be vigilant in monitoring the case and asserting lease and