Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Bankruptcy StrategistKickerFeaturesTopicsCommercial LawSectionsNewsLJN Newsletters

Cleaning up After Debtor/Tenants

By Adam J. Rosen and John C. Wright
February 26, 2008

The scenario is not all that unusual. The debtor files Chapter 11, rejects a commercial real property lease and moves out ' except the debtor leaves behind unwanted equipment, debris, and sometimes, damaged property. The landlord then has to clean up the property and make any necessary repairs, and as a result, has a claim against the debtor for those costs. Courts have reached conflicting conclusions regarding whether clean-up and repair costs are capped under Code
' 502(b)(6). The Ninth Circuit's recent decision in In re El Toro Materials Co., Inc., 504 F.3d 978 (9th Cir. 2007) has cleared up some of the confusion by reversing in part In re McSheridan, 184 B.R. 91 (B.A.P. 9th Cir. 1995), a Ninth Circuit BAP decision which held that a landlord's entire claim was capped. Several other courts have relied on the McSheridan decision, including In re Foamex International, Inc., 368 B.R. 383 (Bankr. D. Del. 2007), a recent Delaware bankruptcy court decision.

Capping Cleanup Costs

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Why So Many Great Lawyers Stink at Business Development and What Law Firms Are Doing About It Image

Why is it that those who are best skilled at advocating for others are ill-equipped at advocating for their own skills and what to do about it?

Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

The DOJ's Corporate Enforcement Policy: One Year Later Image

The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.

A Lawyer's System for Active Reading Image

Active reading comprises many daily tasks lawyers engage in, including highlighting, annotating, note taking, comparing and searching texts. It demands more than flipping or turning pages.

Protecting Innovation in the Cyber World from Patent Trolls Image

With trillions of dollars to keep watch over, the last thing we need is the distraction of costly litigation brought on by patent assertion entities (PAEs or "patent trolls"), companies that don't make any products but instead seek royalties by asserting their patents against those who do make products.