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§ 502(b)(6)

In re Brown

Ruling
Claim for refitting costs of commercial premises limited by statutory cap on lease damages.
Procedural posture

The debtors filed for chapter 13 bankruptcy relief. Two creditors filed a proof of claim based on the breach of a commercial lease. The debtors objected to the claim, alleging that the refitting costs necessary to re-let the property were not allowable pursuant to 11 U.S.C.S. § 502(b)(6). The bankruptcy court held an evidentiary hearing.

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Consumer opinion summary, case decided on October 23, 2008 , LexisNexis #1108-116

In re Timber Lodge Steakhouse Inc.

Ruling
Lessor's sale of premises after debtor's rejection of lease defeated any claim for future damages.
Procedural posture

The debtor filed an objection to a claim filed by creditor for an amount resulting from the debtor's rejection of a lease of Wisconsin real estate where the debtor had operated one of its restaurants.

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Commercial opinion summary, case decided on October 29, 2007 , LexisNexis #1107-112

In re FLYi Inc.

Ruling
Sale of premises by landlord terminated any claim for unpaid rent or rejection damages against debtor.
Procedural posture

A distribution trust for chapter 11 debtors objected to the claim filed by a former landlord for lease rejection damages pursuant to 11 U.S.C. § 502(b)(6).

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Commercial opinion summary, case decided on October 17, 2007 , LexisNexis #1107-043

Flanigan v. Samalex Trust (In re Flanigan)

Ruling
Claim based on debtor's guaranty of a lease was subject to rent claims limitation.
Procedural posture

Chapter 11 debtors filed a motion for summary judgment with respect to their objection to the proof of claim filed by a claimant. The debtor alleged that the claim was subject to a limitation for rent claims imposed by 11 U.S.C. § 502(b)(6).

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opinion summary, case decided on August 27, 2007 , LexisNexis #0907-110

In re Connectix Corp.

Ruling
Landlord's capped claim for unpaid commercial rent allowed but less draws on letter of credit.
Procedural posture

Creditor, the former commercial landlord of the debtor, filed a claim in the amount of $2,335,283.99 based on the debtor's future lease obligations. The chapter 7 trustee, the debtor, and its major shareholders, objected to the amount of claim, and asserted that, under the correct application of 11 U.S.C. § 502(b)(6), the landlord's recovery from the bankruptcy estate to $446,246.99.

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opinion summary, case decided on May 10, 2007 , LexisNexis #0907-025

1500 Mineral Springs Assocs. LP v. Gencarelli

Ruling
Case remanded for review of debtor's level of financial distress and reconsideration of cap on creditors'claims.
Procedural posture

Appellant creditors sought review of three orders issued by a U.S. Bankruptcy Court, which: (1) denied their motion to dismiss appellee debtor's individual chapter 11 petition for lack of good faith; (2) limited the creditors'claims against a corporate debtor for past and future rent to the amount provided by 11 U.S.C. § 502(b)(6); and (3) authorized an interim distribution to the individual debtor. The issues were consolidated for review.

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opinion summary, case decided on November 08, 2006 , LexisNexis #1206-048