Opinion ID: 503091
Heading Depth: 2
Heading Rank: 4

Heading: Relief from Forfeiture

Text: 27 Even though the lease may have been terminated before WFI filed its Chapter 7 petition in bankruptcy, the trustee may be entitled to relief from forfeiture of the lease under California law. If so, the trustee's assumption of the lease would be proper. See City of Valdez v. Waterkist Corp. (In re Waterkist Corp.), 775 F.2d 1089, 1091 (9th Cir.1985). 28 Assumability of a lease by a trustee in bankruptcy, in the context of a lease termination claim, involves a two-part test. The first part of the test is to determine whether the lease terminated before the petition in bankruptcy was filed. Id. We have already discussed this. The second part of the test requires the court to determine whether the termination could have been reversed under a state anti-forfeiture provision or other applicable state law. Id. (emphasis added). This second step in the analysis permits the [trustee] the same opportunities to avoid forfeiture of a lease ... that it would have received under state law absent the bankruptcy proceedings. Id. (citing Butner v. United States, 440 U.S. 48, 55, 99 S.Ct. 914, 918, 59 L.Ed.2d 136 (1979)). On remand the bankruptcy court should determine whether the lease, if validly terminated by Vanderpark, could have been saved from forfeiture by application of California Code of Civil Procedure section 1179, or any other antiforfeiture provision of California law.