by Kevin Lis­se­more*

Bank­rupt­cy allows finan­cial­ly dis­tressed enti­ties to alter their legal rela­tion­ships with oth­er par­ties by pro­vid­ing bank­rupt­cy trustees and debtors in pos­ses­sion with the abil­i­ty to reject oth­er­wise valid execu­to­ry con­tracts or com­mer­cial leas­es.1 This pro­vides bank­rupt enti­ties with a unique oppor­tu­ni­ty to avoid per­form­ing in full agree­ments that may not ben­e­fit them in the future. This pow­er can have a sig­nif­i­cant neg­a­tive impact on par­ties who con­tract with a debtor, because those par­ties can only receive the expect­ed con­sid­er­a­tion by fil­ing a claim in the bank­rupt­cy, where they will typ­i­cal­ly only receive a frac­tion of the val­ue of that claim upon con­fir­ma­tion of a final bank­rupt­cy plan. As such, the pre­cise extent of the sec­tion 365 rejec­tion pow­er has gen­er­at­ed sig­nif­i­cant litigation.

Sec­tion 365(d)(3), for exam­ple, requires bank­rupt­cy trustees and debtors in pos­ses­sion (the “debtor”) to time­ly com­ply with all oblig­a­tions aris­ing under their lease until the time they choose to assume or reject it.2 The cru­cial ques­tion for cred­i­tors and debtors in this sit­u­a­tion is exact­ly what “oblig­a­tions” arise under their lease agree­ment and, per­haps more impor­tant­ly, when a par­tic­u­lar oblig­a­tion is deemed to arise. This deter­mi­na­tion is par­tic­u­lar­ly sig­nif­i­cant when a debtor choos­es to reject their lease short­ly after a rent bill comes due. Since debtors are required to vacate the premis­es imme­di­ate­ly upon rejec­tion,3 they may ulti­mate­ly pay in full for an entire rental peri­od with­out actu­al­ly occu­py­ing or using the premis­es for the entire­ty of the period.

Debtor-ten­ants argue that this prac­tice is unfair or against the inter­est of oth­er cred­i­tors. Indeed, some dis­trict and bank­rupt­cy courts have found that debtors need only pay in full for the pro­rat­ed por­tion of the rental peri­od that accrued before they reject­ed their lease.4 But each of the fed­er­al courts of appeals to have con­sid­ered this ques­tion have inter­pret­ed the statute in favor of land­lords, and ordered that rent oblig­a­tions com­ing due pri­or to rejec­tion must be paid in full even if the debtor vacates the premis­es before the end of the rental peri­od.5 This Con­tri­bu­tion will argue in favor of the view adopt­ed by these cir­cuit courts, because it is sup­port­ed by the plain mean­ing of sec­tion 365(d)(3)’s text, the statute’s pur­pose in the greater con­text of the Bank­rupt­cy Code, and pol­i­cy considerations.

11 U.S.C. § 365(d)(3) states that “[t]he trustee6 shall time­ly per­form all the oblig­a­tions of the debtor . . . 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.” Two com­pet­ing inter­pre­ta­tions of this statute have emerged: the pro­ra­tion approach, under which the debtor is only required to pay “sums com­ing due under a lease dur­ing the post-peti­tion, pre-rejec­tion peri­od that per­tain to ben­e­fits real­ized by the estate dur­ing that peri­od,”7 and the per­for­mance date approach, which requires that “any amount com­ing due under a lease in the post-peti­tion, pre-rejec­tion peri­od must be paid in full by the debtor with­out regard to whether the pay­ment per­tains to a pre-peti­tion or post-rejec­tion ben­e­fit.”8 For decades, tex­tu­al­ism has been the pre­dom­i­nant method of statu­to­ry inter­pre­ta­tion in Amer­i­can jurispru­dence.9 And while the per­for­mance date approach nat­u­ral­ly aris­es from the plain text of the statute, the pro­ra­tion approach can only rely on extra­tex­tu­al prin­ci­ples for support.

In the con­text of rent charges, these two inter­pre­ta­tions con­flict when a debtor opts to reject their com­mer­cial lease short­ly after the due date for rent. In most leas­es, rent for the month (or oth­er spec­i­fied peri­od) is due in full on the first day of the peri­od. Under the per­for­mance date approach, since all the rent for the peri­od comes due at once, the debtor would be respon­si­ble to pay the entire­ty of the rent for that peri­od in full, even if they reject the lease and move out short­ly after the due date. The pro­ra­tion approach, on the oth­er hand, asserts that a debtor in this sit­u­a­tion should only have to pay in full the amount allo­ca­ble to the pro­por­tion of the rental peri­od that passed before they reject­ed their lease.

Since “oblig­a­tion” is not defined in the bank­rupt­cy code, sec­tion 365(d)(3) pre­sum­ably uses the word “in its com­mon­ly under­stood sense” rel­e­vant to the con­text.10 Black’s Law Dic­tio­nary defines an oblig­a­tion as “a legal or moral duty” or “a for­mal, bind­ing agree­ment or acknowl­edge­ment of a lia­bil­i­ty” to pay or do some­thing, “espe­cial­ly a duty aris­ing by con­tract.”11 In the con­text of lease oblig­a­tions, then, the con­tract itself is defin­i­tive in set­ting the par­ties’ oblig­a­tions there­un­der.12 There­fore, when the lease includes a term oblig­at­ing the ten­ant to pay rent in full on a spe­cif­ic date, the debtor in pos­ses­sion or bank­rupt­cy trustee must per­form that oblig­a­tion in full if they do not reject their lease before the con­trac­tu­al due date. Indeed, every court of appeals to address this issue has looked to the applic­a­ble leas­es and con­se­quent­ly adopt­ed the per­for­mance date approach.13

When the plain mean­ing of the statu­to­ry text is straight­for­ward and results in a rea­son­able out­come, it must be enforced as writ­ten.14 This is not the only sup­port, how­ev­er, for adopt­ing the per­for­mance date approach. Con­sid­er­ing the pur­pose of the statute as part of a broad­er leg­isla­tive regime can also illu­mi­nate its prop­er inter­pre­ta­tion. Sec­tion 365(d)(3) orig­i­nat­ed in the 1984 amend­ments to the Bank­rupt­cy Code. Pri­or to that amend­ment, lease oblig­a­tions that arose after a debtor filed its bank­rupt­cy peti­tion, but before it chose to reject its lease, were only addressed under 11 U.S.C. § 503. Sec­tion 503(b)(1) pro­vides that cred­i­tors may be paid imme­di­ate­ly and in full for “the actu­al, nec­es­sary costs and expens­es of pre­serv­ing the estate” dur­ing the bank­rupt­cy pro­ceed­ing.15 Sup­port­ers of the pro­ra­tion approach point to sec­tion 503’s require­ment that these “admin­is­tra­tive expens­es” be pro­rat­ed, such that only the amount allo­ca­ble to the peri­od pri­or to rejec­tion would be due in full. Based on the gen­er­al prin­ci­ple that the Bank­rupt­cy Code should not be “read . . . to erode past bank­rupt­cy prac­tice absent a clear indi­ca­tion that Con­gress intend­ed such a depar­ture,”16 they con­clude that oblig­a­tions under sec­tion 365(d)(3) should be pro­rat­ed in the same way.17

This inter­pre­ta­tion is flawed for sev­er­al rea­sons. First, it does not com­port with the text of sec­tion 365(d)(3), which says that the new treat­ment it pre­scribes for the cat­e­go­ry of expens­es that fall under its purview will apply “notwith­stand­ing sec­tion 503(b)(1).”18 This clause pro­vides the req­ui­site clear indi­ca­tion that Con­gress intend­ed these expens­es to be treat­ed in a new, dif­fer­ent way. And, look­ing beyond the text, “[i]t seems clear . . . that Con­gress enact­ed § 365(d)(3) for the pur­pose of alter­ing a pre-Code prac­tice that had cre­at­ed a prob­lem for land­lords of non-res­i­den­tial prop­er­ty . . . .”19 Under sec­tion 503, a cred­i­tor request­ing to be paid an admin­is­tra­tive expense for one or more of the debtor’s lease oblig­a­tions would have to ded­i­cate the time and expense of pro­vid­ing notice and attend­ing a hear­ing in order to get paid. And even at that hear­ing, they would only be able to recov­er the rea­son­able val­ue of the debtor’s actu­al use of the premis­es. Addi­tion­al­ly, if the bank­rupt­cy court found that the rent price set in the lease was unrea­son­able, it could dis­place the bar­gain entered into by the par­ties and instead lim­it recov­ery to what­ev­er it deemed to be the fair mar­ket val­ue of the premis­es.20

This treat­ment was espe­cial­ly prob­lem­at­ic for land­lords because, unlike oth­er enti­ties that might be con­tract­ing with a debtor, a land­lord can­not go out and sell the ser­vice they were ini­tial­ly pro­vid­ing to the bank­rupt­cy par­ty to a new con­trac­tu­al partner—the debtor is allowed to stay in the premis­es, immune from evic­tion,21 while they take up to 300 days to decide whether to assume or reject their lease.22 Thus, the land­lord is an invol­un­tary cred­i­tor in bank­rupt­cy, forced to allow a debtor to monop­o­lize their prop­er­ty with­out receiv­ing fair pay­ment in return.23 Con­gress was cer­tain­ly cog­nizant of land­lords’ chal­leng­ing predica­ment under sec­tion 503 when it enact­ed sec­tion 365(d)(3). The pur­pose of the new leg­is­la­tion was to ben­e­fit land­lords, by elim­i­nat­ing the need to apply for a hear­ing and prove that the full amount of their claims is nec­es­sary to the preser­va­tion of the estate.24 It fol­lows that the oth­er restric­tion of sec­tion 503, such as the pro­ra­tion of admin­is­tra­tive expens­es, would also be dis­placed when sec­tion 365 became law.25

Even leav­ing the statu­to­ry text and the rest of the Bank­rupt­cy Code aside, the per­for­mance date inter­pre­ta­tion of sec­tion 365(d)(3) is also prefer­able in terms of its prac­ti­cal out­comes. While crit­ics assert that it dis­places the fun­da­men­tal theme of equal treat­ment amongst bank­rupt­cy cred­i­tors and pro­vides a wind­fall to com­mer­cial land­lords,26 the per­for­mance date approach mere­ly reflects the com­mon con­gres­sion­al prac­tice of pri­or­i­tiz­ing cer­tain types of cred­i­tors when there is a pru­den­tial rea­son to do so. More­over, the per­for­mance date inter­pre­ta­tion of sec­tion 365(d)(3) incen­tivizes land­lords to rent to ten­ants with a high­er risk of default, there­by sup­port­ing the growth of small and mid­size businesses.

One of the fore­most objec­tions to the per­for­mance date approach is that apply­ing it “often con­verts what would be prep­e­ti­tion debt (attrib­ut­able to either pre-order-for-relief occu­pan­cy or post-rejec­tion occu­pan­cy) into an admin­is­tra­tive claim, there­by vio­lat­ing the prin­ci­ple of cred­i­tor equal­i­ty.”27 This argu­ment, how­ev­er, over­sim­pli­fies the Bank­rupt­cy Code—when Con­gress deter­mines that anoth­er val­ue out­weighs the gen­er­al cred­i­tor equal­i­ty axiom, it freely pri­or­i­tizes cer­tain cred­i­tors or expens­es over oth­ers.28 While pro­ra­tion is a rea­son­able way to sat­is­fy the claims of sim­i­lar­ly sit­u­at­ed actors, Con­gress enact­ed sec­tion 365(d)(3) specif­i­cal­ly because com­mer­cial land­lords are not like oth­er actors, giv­en their sta­tus as invol­un­tary cred­i­tors pre­clud­ed from access­ing or receiv­ing pay­ment for their prop­er­ty dur­ing the pen­den­cy of the bank­rupt­cy. Pro­ra­tion is not a panacea, and leg­is­la­tion can and should sup­plant it when there is a com­pelling pol­i­cy rea­son to do so.

Anoth­er com­mon­ly alleged flaw of the per­for­mance date approach is that it cre­ates a wind­fall for land­lords, allow­ing them to col­lect rent allo­ca­ble to the post-rejec­tion peri­od imme­di­ate­ly and in full, while oth­er cred­i­tors must wait to be paid until the court approves a final plan.29 How­ev­er, this crit­i­cism ignores the fun­da­men­tal ben­e­fits of the approach and instead empha­sizes con­tin­gent risks which par­ties can eas­i­ly avoid through due dili­gence. Indeed, with­out the per­for­mance date approach, land­lords would actu­al­ly be sub­ject to greater loss­es than oth­er cred­i­tors.30

First, land­lords in this sit­u­a­tion do not have the req­ui­site con­trol to effect a wind­fall gain because the bank­rupt par­ty (the trustee or debtor in pos­ses­sion), not the land­lord, deter­mines when to reject a lease. The bank­rupt par­ty can eas­i­ly reject at the end of the rent peri­od and there­by avoid any con­tin­u­ing post-rejec­tion expense.31 The per­for­mance date approach is also just as like­ly to work to the ben­e­fit of debtors: for exam­ple, if rent comes due the day before the debtor files for bank­rupt­cy, and the debtor does not make the pay­ment before fil­ing, the entire rent expense would be treat­ed as a reg­u­lar pre-peti­tion claim, payable only in part and at the end of the bank­rupt­cy pro­ceed­ing.32

The per­for­mance date approach embod­ies an emi­nent­ly sen­si­ble view of what Con­gress intend­ed to achieve in pass­ing sec­tion 365(d)(3). Allow­ing land­lords to col­lect the final period’s rent pay­ment in full once a ten­ant rejects the lease gives them the chance to main­tain finan­cial sta­bil­i­ty while find­ing new ten­ants to replace reject­ing debtors. This task takes time, as it is hard to pre­dict when a debtor will choose to reject a lease, and an ongo­ing glob­al pan­dem­ic fur­ther com­pli­cates the process of releas­ing. The pro­ra­tion approach, on the oth­er hand, would sad­dle land­lords with high­er loss expo­sure in the event a ten­ant becomes insol­vent and rejects their lease. This would incen­tivize land­lords to rent only to large, high­ly sol­vent cor­po­ra­tions, and dis­cour­age bar­gain­ing with small or ear­ly-stage busi­ness­es that might have a height­ened risk of default or bank­rupt­cy. The per­for­mance date inter­pre­ta­tion of § 365(d)(3) eas­es the con­se­quences of ten­ant insol­ven­cy for land­lords, who are oth­er­wise held in in a state of uncer­tain­ty by a ten­ant who may not be able to pay while they decide whether or not to assume their lease.33

Ulti­mate­ly, § 365(d)(3) gov­erns sit­u­a­tions where one par­ty, debtor or land­lord, will inescapably suf­fer greater con­se­quences than the oth­er. In such a case, the deci­sion of which par­ty deserves prece­dence is a sub­jec­tive eval­u­a­tion much more apt for the people’s rep­re­sen­ta­tives in Con­gress than the judi­cia­ry. In pass­ing the lan­guage of § 365(d)(3), Con­gress made this choice in favor of com­mer­cial land­lords. And while “[o]ne can dis­agree with this leg­isla­tive clas­si­fi­ca­tion as a polit­i­cal mat­ter . . . when lan­guage as clear as ‘all the oblig­a­tions of the debtor . . . under any unex­pired lease’ is invoked by a land­lord,” a court’s only role is to iden­ti­fy the oblig­a­tions defined in that lease and enforce them accord­ing­ly.34

* Kevin Lis­se­more is a J.D. Can­di­date (2023) at New York Uni­ver­si­ty School of Law. This piece is a com­men­tary on the prob­lem at the 2022 Duber­stein Bank­rupt­cy Moot Court Com­pe­ti­tion host­ed by St. John’s Uni­ver­si­ty School of Law. The ques­tion pre­sent­ed was whether 11 U.S.C. § 365(d)(3) requires a trustee or debtor in pos­ses­sion to pay rent due pri­or to the rejec­tion of an unex­pired non-res­i­den­tial real prop­er­ty lease but allo­ca­ble to the peri­od after the effec­tive date of rejec­tion. This con­tri­bu­tion presents a pro-land­lord inter­pre­ta­tion of the dis­put­ed pro­vi­sion, advo­cat­ing for full pay­ment of all the debtor’s oblig­a­tions which arise pri­or to the rejec­tion date of a lease, includ­ing all rent expens­es which come due in this post-peti­tion, pre-rejec­tion peri­od. The views expressed here­in do not nec­es­sar­i­ly reflect the view of the author.

1. 11 U.S.C. §§ 365(a), 365(d) (pro­vid­ing that debtors have at least 60 days from the date they file for bank­rupt­cy to decide whether to assume or reject a contract).

2. 11 U.S.C. § 365(d)(3).

3. 11 U.S.C. § 365(d)(4); see also In re curio Shoppes, Inc., 55 B.R. 148, 153–54 (Bankr. D. Conn. 1985).

4. See, e.g., In re NET­tel Corp., 289 B.R. 486, 489 (Bankr. D.D.C. 2002); In re Trak Auto Corp., 277 B.R. 655, 663 (Bankr. E.D. Va. 2002), rev’d on oth­er grounds, 367 F.3d 237 (4th Cir. 2004); In re Ames Dep’t Stores, Inc., 306 B.R. 43, 65 (Bankr. S.D.N.Y. 2004).

5. Buri­val v. Roehrich (In re Buri­val), 613 F.3d 810, 812 (8th Cir. 2010) (“This court agrees . . . that § 365(d)(3) is not ambigu­ous. . . . Rent oblig­a­tions in such leas­es must be per­formed when they arise after fil­ing and before rejec­tion . . .”); HA-LO Indus., Inc. v. Cen­ter­point Props. Tr., 342 F.3d 794, 798 (7th Cir. 2003) (“Under the pre­scrip­tions of § 365(d)(3), HA–LO is required to time­ly per­form all lease oblig­a­tions that arise after [the peti­tion date], until the lease is reject­ed.”); Cen­ter­point Props. v. Mont­gomery Ward Hold­ing Corp. (In re Mont­gomery Ward Hold­ing Corp.), 268 F.3d 205, 210 (3d Cir. 2001) (“[F]inding a straight­for­ward inter­pre­ta­tion that pro­duces a ratio­nal result and no oth­er rea­son­able inter­pre­ta­tion con­sis­tent with the text, we are con­strained to hold that § 365(d)(3) is not ambigu­ous.”); Koenig Sport­ing Goods, Inc. v. Morse Road Co. (In re Koenig Sport­ing Goods, Inc.), 203 F.3d 986, 989 (6th Cir. 2000) (“The spe­cif­ic oblig­a­tion to pay rent . . . arose . . . dur­ing the post­pe­ti­tion, pre­re­jec­tion peri­od. Under these cir­cum­stances, § 365(d)(3) is unam­bigu­ous as to the debtor’s rent oblig­a­tion and requires pay­ment of the full month’s rent.”).

6. This sec­tion also extends to Chap­ter 11 debtors in pos­ses­sion under 11 U.S.C. § 1107(a).

7. Koenig Sport­ing Goods, Inc. v. Morse Road Co. (In re Koenig Sport­ing Goods, Inc.), 229 B.R. 388, 391 (B.A.P. 6th Cir. 1999), aff’d, 203 F.3d 986 (6th Cir. 2000); see also In re Ames Dep’t Stores, 306 B.R. at  65 (apply­ing the pro­ra­tion interpretation).

8. In re Comdis­co, Inc., 272 B.R. 671, 674–76 (Bankr. N.D. Ill. 2002); see also Koenig Sport­ing Goods, 229 B.R. at 390.

9. See Rubin v. Unit­ed States, 449 U.S. 424, 430 (1981) (“When we find the terms of a statute unam­bigu­ous, judi­cial inquiry is com­plete, except in rare and excep­tion­al cir­cum­stances.” (inter­nal quo­ta­tion marks omit­ted)); Bostock v. Clay­ton Coun­ty, 140 S. Ct. 1731, 1737 (2020) (“When the express terms of a statute give us one answer and extra­tex­tu­al con­sid­er­a­tions sug­gest anoth­er, it’s no con­test. Only the writ­ten word is the law. . . .”); See also Har­vard Law School, The 2015 Scalia Lec­ture | A Dia­logue with Jus­tice Ele­na Kagan on the Read­ing of Statutes, YouTube at 08:28 (Nov. 25, 2015), (“We’re all tex­tu­al­ists now.”).

10. In re Mont­gomery Ward Hold­ing Corp., 268 F.3d at 209.

11. Oblig­a­tion, Black’s Law Dic­tio­nary (11th ed. 2019) (empha­sis added).

12. In re Mont­gomery Ward Hold­ing Corp., 268 F.3d at 209 (“[A]ny inter­pre­ta­tion [of § 365(d)(3)] must look to the terms of the lease to deter­mine both the nature of the ‘oblig­a­tion’ and when it ‘aris­es.’”).

13. See supra note 6.

14. See Lamie v. Unit­ed States Tr., 540 U.S. 526, 528 (2004) (“[W]hen the statute’s lan­guage is plain, the sole func­tion of the courts—at least where the dis­po­si­tion required by the text is not absurd—is to enforce it accord­ing to its terms.”) (quot­ing Hart­ford Under­writ­ers Ins. Co. v. Union Planters Bank, N. A., 530 U.S. 1, 6, (2000)).

15. 11 U.S.C. § 503(b)(1).

16. Cohen v. De La Cruz, 523 U.S. 213, 221 (1998) (inter­nal quo­ta­tions and cita­tions omitted).

17. See Child World, Inc. v. The Campbell/Mass. Tr. (In re Child World, Inc.), 161 B.R. 571, 575–76 (S.D.N.Y. 1993).

18. 11 U.S.C. § 365(d)(3).

19. In re Mont­gomery Ward Hold­ing Corp., 268 F.3d at 211

20. Joshua Fruchter, To Bind or Not to Bind—Bankruptcy Code § 365(d)(3): Statu­to­ry Mine­field, 68 Am. Bankr. L.J. 437, 438.

21. 11 U.S.C. § 362(a)(3) (stay­ing pro­ceed­ings, includ­ing evic­tions, involv­ing the debtor until the con­fir­ma­tion of a final bank­rupt­cy plan).

22. 11 U.S.C. § 365(d)(4) (pro­vid­ing 210 days, plus a 90-day exten­sion upon motion to the court, for a trustee or debtor in pos­ses­sion to decide whether or not to reject their lease).

23. See HA-LO Indus., 342 F.3d at 799 (“[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.” (quot­ing In re Handy Andy Home Improve­ment Ctrs., Inc., 144 F.3d 1125, 1128 (7th Cir. 1998))).

24. See H.R. Conf. Rep. No. 98–882, at 598–99, reprint­ed in 1984 U.S.C.C.A.N. 576, 598–99 (state­ment of Sen. Hatch, Sen. con­fer­ee on bill) (not­ing that invol­un­tary cred­i­tor land­lords are “forced to pro­vide cur­rent ser­vices . . . with­out cur­rent pay­ment. No oth­er debtor is put in this posi­tion. . . . This bill would lessen these prob­lems by requir­ing the trustee to per­form all the oblig­a­tions of the debtor at the time required in the lease[,]” rather than after con­duct­ing an admin­is­tra­tive expense hear­ing under sec­tion 503(b)).

25. See In re Krys­tal Co., 194 B.R. 161, 164 (Bankr. E.D. Tenn. 1996) (adopt­ing the per­for­mance date approach and hold­ing “Con­gress intend­ed § 365(d)(3) to shift the bur­den of inde­ci­sion to the debtor . . ., a sen­si­ble adjust­ment of this par­tic­u­lar debtor-cred­i­tor relationship.”).

26. See, e.g., Vic­to­ria Kothari, 11 U.S.C. § 365(D)(3): A Con­cep­tu­al Sta­tus Argu­ment for Pro­ra­tion, 13 Am. Bankr. Inst. L. Rev. 297, 321, 348 (2005) (“Oblig­a­tions of the land­lord that arose pre-peti­tion should be clas­si­fied and treat­ed in the same man­ner as any oth­er pre-peti­tion creditor.”).

27. In re NET­tel Corp., 289 B.R. 486, 492–93 (Bankr. D.D.C. 2002); see also Howard Deliv­ery Serv., Inc. v. Zurich Amer­i­can Ins. Co., 547 U.S. 651, 655 (2006) (“[W]e are mind­ful that the Bank­rupt­cy Code aims, in the main, to secure equal dis­tri­b­u­tion among creditors.”).

28. See, e.g., 11 U.S.C. § 507 (orga­niz­ing a range of claims into cat­e­gories, each with a dif­fer­ent lev­el of pri­or­i­ty in receiv­ing dis­tri­b­u­tion from the bank­rupt­cy estate); 11 U.S.C. § 1110 (allow­ing lessors of large air­craft or ves­sels to reclaim pos­ses­sion of their leased prop­er­ty from the debtor ear­li­er than oth­er lessors).

29. See In re Ames Dep’t Stores, 306 B.R. at 69–70.

30. See supra notes 24–25 and accom­pa­ny­ing text.

31. In re Koenig Sport­ing Goods, 203 F.3d at 989.

32. See In re The 1/2 Off Card Shop, Inc., No. 00–48425-WS, 2001 WL 1822419, at *3 (Bankr. E.D. Mich. Mar. 7, 2001).

33. HA-LO Indus., 342 F.3d at 799.

34. In re Geonex Corp., 258 B.R. 336, 342 (Bankr. D. Md. 2001) (quot­ing 11 U.S.C. § 365(d)(3)).