In re Hurst Lincoln-Mercury, Inc., 1-86-03587.
| Citation | 70 BR 815 |
| Decision Date | 02 March 1987 |
| Docket Number | No. 1-86-03587.,1-86-03587. |
| Parties | In re HURST LINCOLN-MERCURY, INC., Debtor. RIDGEVIEW LINCOLN-MERCURY, INC., Movant, v. HURST LINCOLN-MERCURY, INC., Debtor. |
| Court | United States Bankruptcy Courts. Sixth Circuit. U.S. Bankruptcy Court — Southern District of Ohio |
Dennis R. Williams, Florence, Ky., for movant.
Paul Nemann, Cincinnati, Ohio, for debtor.
DECISION
Movant filed this contested matter after more than 60 days had passed since the order for relief in the case, and debtor had failed to assume or reject its lease of non-residential real property.
The matter came on for a final hearing at which time testimony was heard. At the conclusion of the hearing, we ruled in favor of movant, announcing on the record the reasons for that conclusion. Essentially, we concluded that the 60 day period provided for in 11 U.S.C. § 365(d)(4) had passed without assumption by debtor, and no significant equitable basis had been shown to resist the application of the statute. Debtor contended merely that movant knew that it wanted to retain the premises, but made no showing whatever regarding why no effort was made to comply with the statute.
In its motion, movant prayed for relief in the alternative. First, it requested an order that debtor be required to surrender possession of the premises. In the alternative, it requested that the automatic stay be modified to permit it to initiate state court eviction proceedings. We were unprepared at the hearing to select between these alternatives and reserved decision thereupon. The parties have now furnished us with legal memoranda on the point. We conclude that movant is entitled to an order requiring that debtor surrender possession to it.
The statute here in question, 11 U.S.C. § 365(d)(4), was added to the Bankruptcy Code by the 1984 Bankruptcy Amendments. It provides:
Prior to that new law, the Code contained no special provision regarding treatment of unexpired leases of nonresidential real property. The prior pertinent statute contained no time period within which a Chapter 11 debtor was required to assume or reject an unexpired lease of nonresidential real property. We accept the statement of relevant legislative history regarding this new enactment to be found in In re Bernard, 69 B.R. 13 (Bankr.Hawaii 1986):
The legislative history of § 365(d)(4) shows that it was the result of heavy lobbying by the (sic) lessors. Previous to the enactment of the 1984 statute, the lessors were often frustrated by the long delay in regaining possession of their property from the debtors-lessees. As a result, many leased premises were often times left vacant while the debtors-lessees delayed in determining whether to assume or reject a lease. Meanwhile, the lessors did not receive any income from the premises leased to the debtors-lessees. Under § 365(d)(4), this immediate surrender of the premises upon rejection of the lease was to enable the lessors to once again rent the premises and to earn income from the demised premises.
It will be apparent, however, indeed from the very facts of the present case, that the language of the statute sweeps much more into its embrace than the situation which led lessors to seek its enactment. Here, there is no question about an extended period of vacancy. Such a disparity between legislative objective and employed statutory language often appeals to the bankruptcy court, a court whose fiber is permeated with the spirit of equity, and may lead to a softening of the hard edges of the law. Here, however, we are unable to find...
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