Blockbuster in Central Pennsylvania; Commercial tenants in bankruptcy

From Yahoo finance comes the story of numerous companies that might not exist in one year. Blockbuster stands out among the list because of its real estate usage:

Blockbuster may still be around as a company that has movie kiosks and a small mail and Internet-delivered content business. But its brick and-mortar business is dead.

I have no idea whether this prediction is true, but commercial landlords can take action to protect themselves (not merely from Blockbuster but from any commercial tenant that might disappear or declare bankruptcy).

There remain numerous Blockbuster locations in Central Pennsylvania. Some have closed over the past few years, including one in Hampden Township and one in Silver Spring Township. Numerous other commercial tenants have abandoned their properties or declared bankruptcy since the real estate bubble began its collapse.

The most important concept for a commercial landlord to remember in a tenant bankrtuptcy is to keep on top of the time limitations set by the bankruptcy code. The bankruptcy code requires the tenant either to make arrangments for full payment of all past due arrearages or to abandon the property within a set time limit. But these provisions do not enforce themselves. The landlord must file motions with the bankruptcy court to ensure that the tenant either pays or leaves. Otherwise, the tenant might remain in the property indefinitely without paying rent.

Future posts here will explain those time limitations and provide guidance.