[WSBARP] Evictions and Bankruptcy

Wed Jan 19 14:02:21 PST 2022

Here are my off-the-top-of-the-head opinions in response to your questions:

(1) With respect to any hesitancy created by a threat of bankruptcy, LL can proceed right up to the point of filing.
(2) LL can still proceed against non-BK husband.  If wife hasn't filed yet, it will be up to husband to go after wife for any contribution or indemnity based on the divorce decree or other agreement between the parties.
(3) A regular civil action would work, if your client's only aim is to recover lost rents.  If your client wants to recover possession of the property, you will need to go the UD route.
(4) I don't know, but I can find out on another Listserve.

Consider whether the wife is operating the business as an entity or as a sole proprietorship.  That will make a difference on who gets sued and what protections a bankruptcy will provide to either lessee.

Mark B. Anderson
ANDERSON LAW FIRM PLLC
821 Dock St  Ste 209  PMB 4-12
Tacoma, Washington 98402
+1 253-327-1750
+1 253-327-1751 (fax)
marka at mbaesq.com<mailto:marka at mbaesq.com>
www.mbaesq.com<http://www.mbaesq.com/>
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From: wsbarp-bounces at lists.wsbarppt.com <wsbarp-bounces at lists.wsbarppt.com> On Behalf Of Paul Neumiller
Sent: Wednesday, January 19, 2022 10:38 AM
To: WSBA RPPT Real Property Discussion Forum <wsbarp at lists.wsbarppt.com>; Listserve RealProp (realprop at googlegroups.com) <realprop at googlegroups.com>
Subject: [WSBARP] Evictions and Bankruptcy

Listmates:  H & W sign commercial lease as individuals.  H & W divorce last year.  Commercial Lease in default over the course of the three years of existence.  We were about to serve the 3-day notice and LL receives an email from an attorney saying that the Wife (who kept the business going in the leased premises) is going to file a bankruptcy using a different law firm.  LL has heard threats of bankruptcy in the past. So,

  1.  Can LL proceed with UD until the notice of the actual bankruptcy filing date?  It is my (very basic) understanding that the stay of bankruptcy is based on notice of the actual filing date, not the notice of a potential or threatened filing date.
  2.  Can LL still proceed against the ex-husband (who by the way is in active military duty)?   The ex-husband signed the lease individually and should be liable to the LL regardless of any apportionment of assets or liabilities in the dissolution decree.  Is this correct?
  3.  Thinking aloud, how does this even work?  Husband probably doesn't have possession of the leased premises so a UD doesn't work against the ex-husband and a bankruptcy filing would, at least for now, protect the Wife.  So, I guess a regular civil action for past rent against the ex-husband may be the only alternative right now?
  4.  Bonus Question:  It is my understanding that the bankruptcy court can determine to maintain or terminate the lease.  If the BK court wants to continue the lease, then the current rent must be paid port filing date?

[Paul A_ Neumiller]

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