Property Management

A West Virginia commercial tenant has a 5-year lease. In year 3, the tenant goes bankrupt. Under federal bankruptcy law, the trustee in bankruptcy may:

AImmediately terminate the lease without any compensation to the landlord
BAssume or reject the lease, paying any unpaid rent if assuming✓ Correct
CForce the landlord to accept reduced rent payments permanently
DOnly extend the lease but never terminate it

Explanation

When a commercial tenant files for bankruptcy, the bankruptcy trustee has the right to assume (keep) or reject (terminate) the lease. If assuming the lease, the trustee must cure any defaults and provide adequate assurance of future performance.

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