Ab liquidating corp
(fka Fisker Automotive, Inc.) (the "Debtors") filed voluntary petitions in the United States Bankruptcy Court for the District of Delaware seeking relief under the provisions of Chapter 11 of the United States Bankruptcy Code.The Debtors continue to operate their businesses and manage their properties as debtors-in-possession.
and shall allow such claim in such amount, except to the extent that ... In sum, the relevant part of Section 502(b)(6) provides that a landlord's claim is limited to the lesser of: (1) its actual damages; or (2) one year's lease payments.1 AMB and the Creditors' Committee agree that AMB's gross damages were $5 million.2 Because this amount exceeds one year's rent ($2 million), they agree that the Landlord's Cap applies. Employing this approach, AMB's gross damages of $5 million, minus the $1 million Security Deposit/Letter of Credit yield "mitigated damages" of $4 million.
(6) if such claim is the claim of a lessor for damages resulting from the termination of a lease of real property, such claim exceeds ... The only issue in this appeal is whether to apply the $1 million Security Deposit/Letter of Credit against the $5 million "gross damages" number or the $2 million "capped" number. Indeed, the purpose of the Landlord's Cap is "to compensate the landlord for his loss while not permitting a claim so large ... These "mitigated damages" exceed one year's rent of $2 million.
Section 502 sets forth the mechanism for calculating the amount of allowable claims against a bankruptcy estate. Mindful of the fact that the legislative history's endorsement of Oldden effectively eviscerates this argument, AMB urges us not to delve into congressional intent, arguing that the text of Section 502 is unambiguous and therefore precludes inquiry into legislative history.
Subsection (b)(6) governs claims by landlords and provides that if objection to a claim is made: (b) the court, after notice and a hearing, shall determine the amount of such claim ... This provision is commonly referred to as the "Landlord's Cap" because it caps the amount a landlord may claim as damages because of a Debtor's rejection of a lease. According to AMB, the plain language of Section 502 requires a court to: (1) determine the landlord's gross damages (net of any recovery through re-letting the property); (2) subtract from those gross damages any "mitigation" from security deposits or letters of credit; (3) compare this "mitigated damages" amount to the statutory cap of one year's rent; and (4) allow a claim for the lesser of either the "mitigated damages" or one year's rent.
The letter of credit in this case was likewise fully-collateralized by Debtor's property.
Thus, even under Judge Klein's reasoning, the proceeds were appropriately deducted from AMB's capped claim.
On November 22, 2013 (the "Petition Date"), FAH Liquidating Corp.
(fka Fisker Automotive Holdings, Inc.) and FA Liquidating Corp.
On April 17, 2000 AMB and Debtor entered into a five-year lease (the "Lease") for certain commercial property.
This case was decided on stipulated facts in the bankruptcy court.
416 F.3d 961 (2005) In re: AB LIQUIDATING CORP., fka Adaptive Broadband Corporation, Debtor, AMB Property, L. Official Creditors for the Estate of AB Liquidating Corp., fka Adaptive Broadband Corporation, Appellee. AMB re-let the premises to another tenant and filed a ,000,000 proof of claim for damages resulting from Debtor’s rejection of the Lease.