November 10, 2022
Tenant’s Claim to Recover Security Deposit from Bankrupt Landlord May Be Treated as an Unsecured Loan
A commercial tenant may expect that its security deposit will be segregated or held in trust by its landlord and therefore be available to be returned to it when the lease is terminated. As explained in a recent New York federal court decision,1 however, if a commercial lease does not require the landlord to segregate…