Arden

This case stems from a bankruptqy claim dispute between debtor/guarantor Pérry Arden and unsecured creditor/lessor Motel Partners over breach of a long-term lease. We must decide whether the bankruptcy court abused its discretion in confirming Motel Partners’ claim compromise- and Plan of Reorganization (the “Plan”) on the ground that the claim was not subject to the damages cap in 11 U.S.C. § 502 (b)(6) (the “Cap”). The Bankruptcy, Appellate Panel (“BAP”) reversed. We have jurisdiction under 28 U.S.C. § 158 (d). and review the BAP’s decision de novo.. See Ardmor Vending Co. v. Kim (In re Kim), 130 F.3d 863, 865 (9th Cir.1997). We hold that the Cap, which limits a lessor’s claim for damages resulting from termination of a lease, is applicable to a debt- or/guarantor and that the bankruptcy court should have considered the Cap in deciding whether to allow the compromise and confirm the Plan. We therefore affirm the BAP’s decision.

I. BACKGROUND

Motel Partners, Valley Budget Operational, L.P. (“Valley Budget”), and one of Valley Budget’s general partners, Arden, are the central figures in a series of agreements to finance, construct, lease, and operate a motel on property in San…