A Pre-Bankruptcy Playbook for Landlords

AGG Real Estate Litigation team co-chair Knox Withers discussed pre-bankruptcy best practices for landlords, offering guidance on how to leverage pre-petition claims during a filing in an article for GlobeSt.

After a tenant files for bankruptcy, an automatic stay prohibits the landlord from collecting pre-petition debts or recovering possession without court approval. Understanding bankruptcy filing best practices is crucial to mitigate risk.

“Targeted demands or litigation against guarantors can accelerate resolution without violating the stay and often push tenants toward assumption, consensual surrender, or settlement,” Knox explained. The automatic stay leaves guarantors exposed and acts as a key pressure point to leverage during litigation.

Knox stated, “By making deliberate pre-petition decisions, documenting defaults, safeguarding administrative priority, and using guaranties strategically, landlords can shorten timelines, reduce carrying costs, and regain meaningful control over both their space and their outcome.”

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