In a victory to the Cortlandt Liquidating estate (created in the Century 21 chapter 11 case), for which Alan Halperin serves as Plan Administrator, the United States District Court for the Southern District of New York recently upheld the decision of the Bankruptcy Court that section 502(b)(6) of the Bankruptcy Code applies to cap the claim of a lessor on account of a guaranty of a lease and that such cap must be calculated in accordance with the “time approach” as opposed to the “rent approach”. Section 502(b)(6) places a cap on the amount of damages a landlord may collect from a debtors’ estate so that such a claim does not overwhelm the unsecured claims pool. The Cortlandt decision represents new precedent in the SDNY with the district joining the growing trend of jurisdictions who favor the “time approach.” The difference between the two approaches in this case was significant, resulting in greatly increased value for unsecured creditors.
The case is Lincoln Triangle Commercial Holding Co., LLC. v. Alan D. Halperin, solely in his capacity as Plan Administrator of Cortlandt Liquidating LLC, Case. No. 23-cv-03262-MKV.
