02-4331 HA-LO Industries, Inc. v. Centerpoint Properties Trust

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“[L]andlords, unlike other creditors, are ‘forced to deal with [their] bankrupt tenant[s] on whatever terms the bankruptcy court impose[s]’ because landlords cannot evict their tenant. 144 F.3d at 1128 (citing Robinson v. Chicago Hous. Auth., 54 F.3d 316, 317-18 (7th Cir. 1995) (automatic stay prevents landlord from evicting tenant)). We noted that Congress passed sec. 365(d)(3) to relieve landlords of the uncertainty of collecting rent fixed in the lease ‘in full, promptly, and without legal expense’ during the awkward postpetition prerejection period. Id. We therefore find Handy Andy supports our conclusion that sec. 365(d)(3) requires HA-LO to pay its November 2001 rent in full on Nov. 1, the postpetition and prerejection day on which such payment was due to CenterPoint under the terms of the lease.

“If HA-LO had rejected the lease effective Oct. 31, rather than November 2, it would not have been obligated to pay rent for November under 11 U.S.C. sec. 365(d)(3). Instead, it elected to reject the lease one day after its monthly rent obligation to Center- Point would arise. Under these circumstances, we agree with the Sixth Circuit that equity as well as the statute favors full payment.”

Affirmed.

Appeal from the United States District Court for the Northern District of Illinois, Kennelly, J., Williams, J.