An Act of God, or Another Failing Restaurant? Illinois Bankruptcy Court Rules on Force Majeure Clause in the Wake of COVID-19 Shutdown Order

The ongoing COVID-19 pandemic has raised pressing questions about how a force majeure provision in a lease will affect a tenant’s obligation to pay rent. A recent decision from a bankruptcy court in Illinois provides useful instruction as to both how courts may analyze claims of force majeure, and how property owners may consider tailoring such clauses in the future. In re: Hitz Restaurant Group, further discussed in this Legal Update, offers an early take on how at least one court may treat force majeure clauses when interpreting tenants’ obligations to pay rent during COVID-19-related shutdowns.