Justia Landlord - Tenant Opinion Summaries

In 1999, I-4 leased Florida land to Lazy Days, with an option to purchase, prohibiting assignment without written consent. In 2008, Lazy Days notified I-4 of its intention to file for Chapter 11 bankruptcy and assign the lease to LDRV. The parties negotiated a settlement agreement in 2009. I-4 consented to assignment. Lazy Days agreed not to “argue against the Bankruptcy Court abstaining from consideration of Lease interpretation issues ... except to the extent necessary in connection with the assumption and assignment of the Lease.” The agreement provided that “there is no intent to, nor is the Lease modified in any respect,” but did not state whether the purchase option survived. The Bankruptcy Court confirmed a reorganization plan incorporating the agreement and closed the case in 2010. In 2011, LDRV attempted to exercise the option. The parties each filed state court lawsuits and LDRV moved to reopen in Bankruptcy Court, which held that the anti-assignment provision was unenforceable and that refusal to honor the option violated the agreement. The district court vacated. The Third Circuit reversed, holding that the Bankruptcy Court properly exercised jurisdiction; the agreement’s exception applied because the proceeding was “in connection with ... assignment of the Lease.” The court rejected arguments that the parties agreed to waive application of 11 U.S.C. 365(f)(3) and that the Bankruptcy Court committed an unconstitutional taking and denied I-4 due process. View "In Re: Lazy Days' RV Ctr., Inc." on Justia Law

A corporation (Infodisc) and one of its subsidiaries (M-TX) defaulted on a loan from a bank. A California court placed the borrowers in receivership to liquidate their assets securing the loan, and an ancillary receivership was opened in Texas. Meanwhile, another Infodisc subsidiary, a California corporation (M-CA), declared bankruptcy. The receiver claimed and sold property in a Texas warehouse that the Landlord alleged was not leased to Infodisc or M-TX but to M-CA. The parties disputed who the tenant was and who owned the property and fixtures in the warehouse. After the trial court rejected almost all of the Landlord's claims, the Landlord appealed. The court vacated the trial court's judgment and dismissed the case, holding that the proceedings violated the automatic stay even though M-CA was not a party to the case. The Supreme Court granted review and reversed, holding that the court of appeals should have abated the appeal to allow the application of the automatic stay to be determined by the trial court in the first instance. Remanded. View "Evans v. Unit 82 Joint Venture" on Justia Law

Plaintiff rented commercial property to AGC under a lease to expire February 28, 2007. In 2006, AGC stopped paying rent and plaintiff obtained a warrant of eviction in state court. On February 2, 2007, before plaintiff could execute the warrant, AGC filed for Chapter 7 bankruptcy; the automatic stay halted eviction efforts. Plaintiff successfully moved to lift the stay and executed the warrant on April 24, 2007. Plaintiff sought, under Section 365(d)(3) of the Bankruptcy Code, post-petition rent, attorneys’ fees, and interest for the period between the Chapter 7 filing date and the date the warrant of eviction was executed. The Bankruptcy Court denied the motion, concluding that the pre-petition issuance of the warrant of eviction terminated the relationship such that there was no “unexpired” lease, the presence of which is necessary to obtain administrative expenses under Section 365(d)(3). The district court affirmed. The Second Circuit vacated. A lease is “unexpired” for purposes of the Code where the tenant has the power to revive the lease under applicable state law. In New York it is the execution, and not the issuance, of the warrant of eviction that extinguishes the tenant’s interest in a lease, so, until the warrant is executed, the lease is “unexpired.” View "In re: Assoc. of Graphic Commc'n, Inc." on Justia Law