The Application of Section 502(b)(6) to Nontermination Lease Damages: To Cap or Not to Cap?
53 Pages Posted: 6 Jan 2012 Last revised: 11 Jan 2012
Date Written: January 5, 2012
Bankruptcy Code Section 502(b)(6) caps a landlord's claim against a debtor-tenant. Courts disagree on whether the provision caps damages for past breaches of non-rent lease covenants, such as a tenant's contractual obligation to maintain and repair the premises. This Article contends that 502(b)(6) caps only those damages authorized under applicable nonbankruptcy law that are triggered by the termination of the lease, regardless of whether termination occurs before or after the petition date.
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