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For counsel & fiduciaries

When the tenant files: how ground leases behave in Chapter 11.

For debtor's counsel, trustees, CROs, and creditors' advisors: the ground lease is often the most durable contract in the estate — and the land under a debtor's buildings is often the cleanest value to monetize. How the mechanics actually run.

Leases get assumed or rejected. Land gets valued either way.
§365
A debtor-tenant assumes (cures and performs) or rejects the lease
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363
A debtor-landowner can sell the fee free and clear, lease intact
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1
Ready buyer estates usually lack: a principal who wants the leased fee
When the leasehold is worth keeping, debtors assume: cure the arrears, keep performing, and the lease rides through the case. When the estate owns the land, the leased fee is frequently its best asset — contracted rent, senior to everything on the parcel — and a court-approved sale converts it to cash at a price institutional buyers will not offer on sub-scale positions. That last part is where we come in: we buy leased-fee positions through estates, at the recorded rent, sized from small to institutional.
What survives

Why a well-drafted ground lease is bankruptcy-durable.

Unsubordinated means no fee mortgage exists to foreclose through the property. Leasehold-lender protections — independent notice and cure, new-lease rights on termination — mean the capital stack above the land can survive its borrower. And rejection of a ground lease by a debtor-landlord runs into a tenant's statutory right to remain in possession. The structure was built for stress; bankruptcy is the stress test it passes.

Questions, answered

FAQ.

Can the estate sell the land without disturbing the lease?

Yes — a 363 sale of the fee, subject to the lease, with the lease assumed or ratified in the order, is the clean path. The buyer steps into the rent stream; the tenant's rights ride through.

What makes a leased-fee position attractive to a buyer out of an estate?

Recorded rent, real coverage from property income, an arm's-length process, and a performing operator on the leasehold. Insider history is cured by the court process itself.

Do you buy these positions?

Yes, as a principal — including positions too small for institutional buyers, and including situations where the honest entry is the fee mortgage note rather than the equity.

Get your number

Administering an estate with land under buildings?

Send the lease and the rent. We respond with a real indication quickly, and we underwrite from public records so your process stays clean.

Email us the property