“The rejection of an executory contract or unexpired lease as a result of the debtor’s failure to affirmatively assume or reject the contract or lease within the time specified by the Code.
In Chapter 7 cases an executory contract or unexpired lease of residential real property is deemed rejected if not assumed or rejected by the debtor within 60 days after the order for relief (or within such additional time as the court allows for assumption or rejection).
If the debtor is a lessee under an unexpired lease of nonresidential real property, the lease is deemed rejected if not assumed or rejected by the debtor within the earlier of 120 days after the order for relief (which may be extended by the court for a period not to exceed an additional 90 days) or the entry of an order confirming a plan. In the case of deemed rejection of an unexpired lease of nonresidential real property, the Code offers the landlord an added benefit by requiring that the debtor immediately surrender the property to the lessor.”
This definition is courtesy of our friends at Polsinelli who publish the Devil’s Dictionary of Bankruptcy Terms. You can access the Devil’s Dictionary here.
For more information about deemed rejections, read What Distressed Businesses and Their Counsel Should Know About the Consolidated Appropriations Act 2021 and Its Effect on the Bankruptcy Code and Commercial Real Estate Tenant Bankruptcy — What To Do