Landlord collects rent despite tenant’s bankruptcy

Two days before a commercial landlord in Nebraska was to receive a $90,000 rent payment for some cropland, the tenant filed for bankruptcy. What happens? Can the landlord still collect? The law is somewhat unclear, but in this case a federal appeals court sided with the landlord and ruled that the tenant had to pay the entire $90,000.

The tenant was a business and it filed a Chapter 11 reorganization bankruptcy (as opposed to liquidating under Chapter 7). According to the ruling, the bankrupt company still had to perform all its obligations under the commercial real property lease until the fate of the lease was decided in court.