08/23/2012 09:52 am ET Updated Oct 23, 2012

Landlord Cleared To Evict Bankrupt Marijuana Dispensary

It's still not clear whether San Diego marijuana dispensary Mother Earth's Alternative Healing Cooperative Inc. will be allowed to reorganize under Chapter 11 of the Bankruptcy Code, but it's already had its first hit of disappointment. The U.S. Bankruptcy Court in San Diego has granted the landlord of Mother Earth's headquarters permission to move forward with evicting the dispensary.

Usually when a company files for bankruptcy protection, all legal action it's involved in is halted for the duration of its Chapter 11 case, a provision of the Code called the automatic stay. However, creditors and other parties involved can petition for relief from the automatic stay.

That's what landlord Wing Avenue Investments LLC did. It petitioned the court for permission to move forward with its eviction of Mother Earth, and Judge Laura Taylor agreed.

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