In Re Pacific-Atlantic Trading Co., a California Corporation, Debtor. Edward F. Towers, Trustee v. Chickering & Gregory, a Partnership
Opinion
Opinion
Hug, J.
Opinion by Judge HUG.
In this case, we are asked to decide whether a trustee’s failure to pay the full amount of a debtor’s rent obligation, under a nonresidential real estate lease, for the period following the order for relief but prior to rejection of the lease, pursuant to 11 U.S.C. § 365 (d)(3), gives rise to an administrative claim for the full amount of the rent accrued during that period, regardless of the actual value conferred by the lease upon the estate. We conclude that it does.
I.
FACTUAL AND PROCEDURAL BACKGROUND
In 1986, Chickering and Gregory (“Chick-ering”) entered into a sublease with Pacific-Atlantic Trading Corporation (“Pacific”). Under this lease, Pacific sublet approximately 26,645 square feet of office space on the 22nd and 23rd floors of Three Embarcadero Center, San Francisco, California. The term of this lease was July 1,1986 to February 28, 1992. Commencing August 1, 1986, the rent was $46,628.75 per month in advance,- along with any additional charges imposed upon Chickering by its lessor under the master lease. Pacific also leased a certain amount of storage space in the building for an additional monthly charge.