Opinion ID: 788706
Heading Depth: 3
Heading Rank: 3

Heading: The landlord's conduct and motives.

Text: 60 Finally, the bankruptcy court note[d] that the landlord's opposition was to any [ nunc pro tunc ] effect generally without any suggestion here that this process should be speeded up so that ... the landlord could get its indefeasible right to relet the premises more quickly. The court granted the relief requested in part because it was convinced that the opposition to this relief is motivated by the landlord's interest in running the administrative rent ... [rather than by] a concern to get this indisputable right to start re-letting the premises as quickly as possible. 61 A landlord's conduct and motives are relevant to a bankruptcy court's equitable deliberations. For instance, Jamesway rested its decision to approve the retroactive rejection of a lease exclusively on the landlord's delay of the hearing on the debtor's motion. 179 B.R. at 38. Although Pacific Shores's conduct here is in no way comparable to the landlord's in Jamesway, it does not follow that Pacific Shores's conduct, or its motivation, is altogether irrelevant. 62 Neither is the amount of rent necessarily irrelevant. Pacific Shores argues that the bankruptcy court, in stating that Pacific Shores was more concerned with obtaining administrative rent than with re-letting the premises, impermissibly weighed the amount of rent in arriving at its decision. Indeed, the court noted that [t]his case wouldn't be interesting and wouldn't even be here except for a fairly interesting amount of rent per month. 63 Relying on Pacific-Atlantic Trading, as well as our later decision in Cukierman, Pacific Shores contends that we have placed that factor beyond the consideration of the bankruptcy court. Pacific-Atlantic Trading held that the contractual rate of rent, rather than the value of the trustee's use of the property, was entitled to administrative priority under § 365(d)(3). 27 F.3d at 405. Cukierman extended that holding to the context of a loan disguised as further rent under a lease obligation. 265 F.3d at 850. Adhering to the reasoning of Pacific-Atlantic Trading, we held that the lessor was entitled to the contractual rate of rent even though the rent in question was arguably completely unrelated to Cukierman's use of the property. Id. Taken together, those two cases establish a bright-line rule under which the administrative rent owed under § 365(d)(3) encompass [es] all obligations contained in a bargained-for agreement regardless of any benefit to the debtor. Id. at 851. 64 That bright-line rule governs the calculation of administrative rent, but it does not render the amount of rent irrelevant to the equitable balancing that a court must perform when deciding whether to approve a motion to reject a lease retroactively. As the district court succinctly explained, 65 for purposes of calculating administrative expenses under section 503(b)(1), the fair value of nonresidential leaseholds is irrelevant; in that circumstance, the contract rate governs. But these provisions do not preclude consideration of the amount of rent that would be due in determining whether the balance of equities weighs in favor of retroactive application of rejection. 66 At Home Corp., 292 B.R. at 203 (citation omitted). We agree with the district court that the bankruptcy court had the discretion to consider both Pacific Shores's motivation in opposing retroactive lease rejection and the amount of rent owing under the contract. 67 As did the First Circuit in Thinking Machines, we eschew any attempt to spell out the range of circumstances that might justify the use of a bankruptcy court's equitable powers in this fashion. 67 F.3d at 1029 n. 9. We likewise eschew any attempt to limit the factors a bankruptcy court may consider when balancing the equities in a particular case. We need not and do not decide whether any one of the factors on which the bankruptcy court relied, standing alone, would justify an exercise of discretion. But in combination those factors supported the court's equitable decision.