In Re Streckrich Petro Corporation, 08-31860 - Eastern District of ...

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in Fisca and SPC. SPC did not ask the Court to conform all of the applicable deadlines in both cases, only the exclusivity period deadline. At this point, therefore, SPC has not requested an extension of time within which to assume or reject the lease. In In re Ted Liu’s Szechuan Garden, Inc., 55 B.R. 8, 9 (Bankr. D.D.C. 1985), the Chapter 11 debtor’s landlord filed a motion for relief from the automatic stay so that the landlord could continue state court eviction proceedings that had been stayed when the debtor filed bankruptcy. At the hearing on the motion, the court considered whether the lease had been terminated prior to bankruptcy. The debtor had not yet assumed or rejected the non-residential real estate lease under section 365(d)(4). The court considered a prior version of section 365(d)(4), which provided the debtor with 60 days, rather than 120 days, to assume or reject the lease. The court held: Id. at 11. in this case the 60-day period [for assuming or rejecting the lease] had not yet run when this Court took under advisement the question of whether or not there was an unexpired lease which could be assumed; only 36 days had elapsed. At all times it has been apparent to both Landlord and Debtor . . . that the Debtor desired to exercise both the right to redeem and the right to assume the lease. But the right to assume could not be exercised until the right to redeem was established; establishment of the right to redeem was thus a precondition before the right to assume could be exercised. The right to redeem has now been established by this Opinion. Thus, the running of the 60-day period for exercising the right to assume (or obtaining an extension of time to exercise that right) should be tolled during the time that the matter of the right to redeem has remained under advisement by this Court. . . . See generally 51 Am.Jur.2d Limitation of Actions § 140 (1970) . . . . The Ted Liu’s Szechuan Garden, Inc. court exercised “its powers as a court of equity” and held that the 60-day period was tolled during the time that it considered 26
the question of whether there was a lease that could be assumed in the bankruptcy action. Id. The court noted that its “analogy is not perfect. . . . this Court’s taking the question of the right to redeem under advisement did not positively prevent the Debtor from seeking an extension of time within which to assume or reject. Nevertheless, the Debtor may well have been lulled into inaction by what the Court did.” Id. at n.5. In this case, the Creditors filed a motion to compel SPC to assume or reject the lease. The Creditors gave SPC a period of time to object to that motion, and SPC did file an objection on March 9, 2009. In that objection, SPC argued that the Agreement was not a true lease and thus that it did not have to assume or reject it under § 365. The Creditors responded to this objection by saying “gotcha” -- they argued that the time for assuming or rejecting the lease had expired while SPC was formulating its objection. (Docket No. 40 at 2.) The Creditors asked the Court to determine whether § 365 compelled SPC to assume or reject the lease. The Court holds that once the Creditors filed their motion, they effectively asked the Court to take the matter under advisement and issue a ruling as to whether § 365 required SPC to assume or reject the lease. Once the Court took the question under advisement, SPC was most likely lulled into inaction on the issue of whether to assume or reject the lease by the fact that it had the opportunity to respond to the motion to compel assumption or rejection. The Court holds, therefore, pursuant to its equitable powers, that the Creditors’ motion to compel assumption or rejection of the lease tolled the time for assuming or rejecting the lease. At the time the Creditors filed their motion, 113 days had elapsed since SPC 27
Page 1 and 2: UNITED STATES BANKRUPTCY COURT EAST
Page 3 and 4: Streckmann (“Streckmann”) are t
Page 5 and 6: hold the Four Properties. 3 (Hooser
Page 7 and 8: argued that if SPC chose to assume
Page 9 and 10: SPC responded that, if the Agreemen
Page 11 and 12: 11 U.S.C. §365(d)(4). SPC, as debt
Page 13 and 14: discussed other factors that a majo
Page 15 and 16: full); or (2) whenever the $2 milli
Page 17 and 18: as the result of a taking, then SPC
Page 19 and 20: d. The remaining facts support a fi
Page 21 and 22: properties upon reasonable notice t
Page 23 and 24: payments have a present value equal
Page 25: the Court concludes that the Agreem

In Re Streckrich Petro Corporation, 08-31860 - Eastern District of ...

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