In re: Assoc. of Graphic Commc’n, Inc.

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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