Rite Aid Bankruptcy Judge Issues Opinion on Important Post-Petition Landlord Lease Issues
Overview In a significant ruling for commercial landlords, dated November 3, 2025, the United States Bankruptcy Court for the District of New Jersey denied three motions filed by HVP2 LLC, the landlord of a rejected Rite Aid lease in Troy, New York (New Rite Aid, LLC, Case No. 25-14861 (MBK)). The motions sought administrative rent, adequate protection payments, late fees, attorney fees, and conversion of the case to Chapter 7. Judge Michael B. Kaplan found that the debtor had satisfied its obligations and properly surrendered the premises, denying all of the landlord’s motions. Key Takeaways for Landlords Stub Rent Paid, But Timing Not Grounds for Late Fees: The court confirmed that “stub rent” (rent due between the petition date and first post-petition payment) qualifies as an administrative expense but emphasized that the Bankruptcy Code does not require payment by a specific date; however, it must be addressed prior to plan confirmation. Relatedly, late fees for May 2025 “stub rent” were denied since the Code imposes no deadline and plan confirmation had not occurred. Common Area Maintenance (CAM) Charges Dismissed as Untimely: HVP2 raised CAM charges only in a supplemental filing, which the court refused to consider. Even if timely, the pleadings lacked sufficient support to justify payment. Lease Surrender Deemed Proper: Despite HVP2’s claim that...