Post-petition Stub Rent Allowed as an Administrative Expense Claim Under 503(b)(1)

Posted on November 18, 2008 by Morris James LLP

In re Goody’s Family Clothing, Inc., 392 B.R. 604 (Bankr. D. Del. 2008) (Judge Christopher S. Sontchi)

The Bankruptcy Court held that the court may allow an administrative claim for unpaid post-petition rent under section 503(b)(1), provided that the claim is for an actual, necessary cost and expense of preserving the estate. The amount of the claim is the fair market value of the premises, which is presumed to be the rent due under the lease, unless contrary evidence is presented. However, timing of administrative expense payments remain at the discretion of the court.

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Court Denies Landlord's Request for Section 365(d)(3) Treatment for Obligations Incurred Pre-Petition But Invoiced Post-Petition

Posted on October 26, 2007 by Morris James LLP

In re Pac-West Telecomm, Case No. 07-10562 (BLS), -- B.R. --, 2007 WL 2910093 (Bankr. D. Del. Oct. 5, 2007) (Judge Brendan L. Shannon)

Debtor Pac-West Telecomm, Inc. commenced its bankruptcy case on April 30, 2007. Carlyle One Wilshire II, L.P., a landlord of the debtor, filed a motion under 11 U.S.C. § 365(d)(3) to compel the debtor to pay amounts allegedly coming due post-petition under the leases between the parties. The motion related to two sets of charges. The first was to recapture amounts undercharged for electricity usage prior to the commencement of the case. The second was for late charges and attorneys’ fees allegedly owing under the leases.  The United States Bankruptcy Court for the District of Delaware denied the request for payment under section 365(d)(3), finding that the amounts invoiced were pre-petition obligations of the debtor.

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