The Bankruptcy Code gives a Chapter 11 debtor the right to reject leases and certain other contracts. This right is especially useful when the ongoing cost to the debtor outweighs the contract’s benefits.
In its Chapter 11 bankruptcy case, Kodak has recently filed a motion to reject the contract that allows the Kodak Theare to use the Kodak name. Kodak’s motion states that it pays “a significant annual fee” — which it does not specify — for the right to keep “Kodak” in the theatre’s name. Kodak could have opted to keep the rights or try to sell them, but its motion indicated that the cost of maintaining those rights, even pending a sale, would “eclipse” any benefit it could capture.
If your Arizona business is struggling with leases or contracts negotiated at the height of the real estate market, you may wish to consult with an Arizona bankruptcy lawyer to determine whether a Chapter 11 bankruptcy makes sense for your situation. For a free consultation, call (480) 719-1152.