Issue link: https://mbozikis.ufcontent.com/i/1422521
105 approach. See, e.g., Pacific Shores Dev., LLC v. At Home Corp. (In re At Home Corp.), 392 F.3d 1064 (9th Cir. 2004); Thinking Machines Corp. v. Mellon Fin. Servs. Corp. #1 (In re Thinking Machines Corp.), 67 F.3d 1021 (1st Cir. 1995). Pursuant to the "pro rata" approach, the court will require payment of rent which actually accrues for the postpetition period. Additionally, in response to the COVID-19 pandemic, Section 365(d)(3) was amended under the CAA Amendments with respect to debtors in Subchapter V 58 only so that the time for performance of commercial lease obligations may be extended by a court for an additional sixty days if the court so determines that a debtor is experiencing "material financial hardship" due to the COVID-19 pandemic, either directly or indirectly. This amendment will expire in December 2022. 11 U.S.C. § 365(d)(3). Section 365(d)(5), which, unlike Section 365(d)(3), is limited to cases filed under Chapter 11 of the Bankruptcy Code, provides similar requirements for a debtor's obligations arising under an unexpired commercial personal property lease beginning sixty days after the order for relief. The court may, however, modify the performance required (or the timing thereof) under Section 365(d)(5) based on the "equities of the case." 11 U.S.C. § 365(d)(5). Finally, it is not uncommon for contracts and leases to include events of default based on a party's filing for bankruptcy (or similar action), insolvency or financial condition. Although such provisions, commonly referred to as "ipso facto" clauses, may still have some legal effect, pursuant to Section 365(e) of the Bankruptcy Code, they cannot act as a basis for terminating or modifying the agreement. Section 365(e)(2), however, provides exceptions to this rule, including where (i) nonbankruptcy law allows the nondebtor party to refuse performance from or refuse to need not be paid currently. In the event that a debtor decides to assume one or more leases, the debtor would ultimately have to cure all payment defaults with respect to such leases. 58 Subchapter V covers small business reorganizations, discussed in greater detail in Chapter VI.J below.