Termination of a Lease

The Sports Authority bankruptcy has been running into difficulty as landlords are litigating the issue of lease termination, and when the damages regarding a breached lease ends.  The statute language in 11 USC 502(b)(6) limits damages to the termination of a lease.  In the majority of jurisdictions, including our own, the courts follow state law, which tends to acknowledge the date that the business decided to surrender or vacate the premises.  However, landlords in Sports Authority (and similarly in Radio Shack and Fresh and Easy) have run into opposition from landlords who wish to have a later date, particularly the date of the bankruptcy or the date in which the property was recovered.  (the later being a dictionary definition, more than a state statutory definition)

This means they would receive more, as charges would continue to accrue, even though the tenant (i.e. Sports Authority)  communicated its attempt to vacate the premises at an earlier date.


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