Notice of Intention to Assume Is Enough to Beat the Automatic Rejection Deadline

November 13, 2024

Notice of Intention to Assume Is Enough to Beat the Automatic Rejection Deadline

A bankruptcy judge in New Jersey holds that it’s enough to file a notice of intention to assume before the automatic lease rejection deadline

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Opinion Link

View Opinion

https://abi-opinions.s3.us-east-1.amazonaws.com/Rite+Aid+-+Fair+Oaks.pdf

Case Details

Case Citation

In re Rite Aid Corp., 23-18993 (Bankr. D.N.J. Nov. 6, 2024)

Case Name

In re Rite Aid Corp.

Case Type

Business

Court

3rd Circuit

New Jersey

Bankruptcy Tags

Executory Contracts/Leases

Business Reorganization

Comments

Submitted by Douglas Tabachnik on November 13, 2024

While I have great respect and admiration for CJ Kaplan, I see obvious due process issues here. A motion gives a clear mechanism informing the counterparty of the opportunity to object and be heard, and is the reason why this course should be preferred. A mere notice does none of that and may more properly be characterized as a stealth assumption as it does not afford the landlord the mechanism to object. Whether the landlord preserved any of these issues for appeal may determine if we get a resolution of them here, or in the future.

Submitted by Kyle Arendsen on November 13, 2024

Agreed with both points - and a very difficult issue to resolve. Does this put the onus on landlords to object anytime an assumption notice is filed? I also worry about a debtor using the assumption notice process and after the automatic rejection deadline filing an amended notice wherein a debtor can try to sneakily put in new proposed cure amounts. The facts here clearly demonstrates that this landlord did not lack due process, but I'm sure there are situations where that could not be an issue. Thanks again for the insight!