Treatment of a True Lease in Bankruptcy

"If an agreement is determined to be a true lease and provided that lease is in existence at the time of the bankruptcy petition filing, the lease will be subject to assumption or rejection by the trustee or the debtor-in-possession. In a Chapter 7 bankruptcy, the trustee is required to assume or reject the lease 60 days from the date of the order for relief unless the bankruptcy court for good cause shown grants to the trustee an extension of time. 11 U.S.C. § 365(d)(1).

Also in a Chapter 7, if the true lease is not assumed or rejected within that time period, the lease will be deemed rejected. Id. The 60 day rule does not apply in a Chapter 9, 11, 12 or 13 bankruptcy case. In those cases, the trustee or debtor in possession may assume or reject the true lease at any time prior to plan confirmation. 11 U.S.C. § 365(d)(2)."