Corporation Bankruptcy vs the Commercial Landlord

[UTCVenturesLtd]

A retailer who has a corporation rents some commercial space in a strip mall. The retailer have 2 years left on a three year lease. Sales are down and they get behind in the rent to the point that they cannot recover. The debt has grown too fast. There is no way out. They cannot even borrow funds to continue so must wind down their corporation. The retailer saw that things were not going well a few months prior and has been trying to sell the shop, but no luck either. The retailer was hoping that by capping off the losses that maybe they could try something else with the corporation and try to save it from utter failure. How does a landlord deal with them? How does the retailer wind down a corporation that goes bankrupt? What is the procedure for both parties in doing what they have to do? What are the retailer`s liabilities as a director of their corporation as well? Just limited to paying the employee`s wages or anything done with their own name and not the corporations`?
Dean
[email protected]

 

[brentdavies]

Does the landlord have a proper commerical lease with the tenant? This is typically a 20 page document, detailing what happens when in default? ( Does not matter if either party are corporations or persons)

Are any of the fixtures in the store leased from other business? ie coolers, displays, etc. ( registry search)

If no lease in place, then you need a good lawyer to guide you through the process ( For either party)

The Residential tenancy act does apply in commerical properties

With 2 years of 3 year lease remaining, I would try to make a deal to "Quit Claim" the lease, or cut your losses and move on.

Good Legal advice is a must.

Good luck

 

[UTCVenturesLtd]

Does the landlord have a proper commerical lease with the tenant? This is typically a 20 page document, detailing what happens when in default? ( Does not matter if either party are corporations or persons)

222 They just have a 3 page lease. ??? Nothing about default.

Are any of the fixtures in the store leased from other business? ie coolers, displays, etc. ( registry search)

222 Retailer owns all the fixtures except for the debit machine.

If no lease in place, then you need a good lawyer to guide you through the process ( For either party)

The Residential tenancy act does apply in commerical properties

222 I talked to a businessman who went through a bankruptcy with a company that he had. His advice was to have both a good accountant and a good lawyer.

With 2 years of 3 year lease remaining, I would try to make a deal to "Quit Claim" the lease, or cut your losses and move on.

222 That was what i suggested. Not sure a landlord would like a retail business but the fixtures are worth about 40% of the balance owing on the lease til it expires. Better than nothing and if flipped fast enough, the landlord could come away smiling on the deal too.

Good Legal advice is a must.

Good luck