Brian Shaw authored an article in Law360 exploring unfamiliarity with the impact Section 502(b)(6) has on the balance of the landlord's underlying, substantive state law claim for breach or termination of a lease once it's reduced by application of Section 502(b)(6)'s cap.
Simple—yet important—questions, such as whether the balance of the state law claim is viable against other entities outside of bankruptcy, or if the landlord is similarly bound outside of bankruptcy by the limitations imposed by Section 502(b)(6), are rarely addressed within the bankruptcy case itself. However, the answers to these important questions, particularly from a circuit court, are very instructive and arm practitioners with information that is necessary to properly advise their debtor/tenant clients.
The article explores the U.S. Court of Appeals for the Eighth Circuit’s rejection of an unusual defense in Lariat Cos. Inc. v. Wigley and the court’s explanation of the effect of Section 502(b)(6) on the state law claim, generally, and on the continued viability of the balance of the state law claim.
To read the full article, click here.