Goody's obtained a better than 105% recovery from the store-closing sales, and these sales were an integral part of the bankruptcy proceedings.
By Goody's own admission, the sale was “pretty successful” and brought in 105.4% of costs. § 365(d)(3), Goody's did pay, and the Landlords accepted, the rent due for the month of July on July 1, 2008. The Landlords filed administrative expense claims under § 503(b)(1) for the “stub rent,” characterizing it as unpaid, post-petition rent that was an actual, necessary cost and expense of preserving the estate.
Additionally, Goody's received from the agent an amount equal to per diem rent associated with use of the Landlords' property to conduct the closing sales, including the entire “stub rent” period. Goody's objected, arguing the “stub rent” was due under the Leases prior to the petition date, making it a general, unsecured pre-petition claim entitled to no special priority.
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“Stub rent” here is the amount due a landlord for the period of occupancy and use between the petition date and the first post-petition rent payment. § 365(d)(3), first addressed in Centerpoint Properties v. (In re Montgomery Ward Holding Corp.), 268 F.3d 205 (3d Cir.2001). Because the District Court sat as an appellate court to review the Bankruptcy Court, we review the Bankruptcy Court's legal determinations de novo, its factual findings for clear error, and its exercises of discretion for abuse thereof. We answer “no” to the first question and “yes” to the second. Section 365(d)(3) does not preempt § 503(b)(1)Section 365(d)(3) of the Bankruptcy Code imposes a special duty with respect to unexpired leases of nonresidential real property: The trustee shall timely perform all the obligations of the debtor, except those specified in section 365(b)(2), arising from and after the order for relief under any unexpired lease of nonresidential real property, until such lease is assumed or rejected, notwithstanding section 503(b)(1) of this title. In contrast, when the contract has been fully performed prior to the petition date, it is no longer executory and thus not entitled to payment priority as an administrative expense. Del.2003) (“It is beyond dispute that all of the Debtors' landlords whose properties are occupied and used post-petition have valid administrative claims.” (emphasis added)); In re HQ Global Holdings, Inc., 282 B.
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