Cukierman

This is an appeal from the Ninth Circuit Bankruptcy Appellate Panel (“BAP”) that involves the interpretation of the administrative priority given obligations under a lease of commercial property. See 11 U.S.C. § 365 (d)(3); In re Pacific-Atlantic Trading Co., 27 F.3d 401, 405 (9th Cir. 1994). The issue is whether obligations denominated in a lease as “further rent” are entitled to priority, even though the obligations actually represent repayments of promissory notes. The bankruptcy court and the BAP both agreed with the landlords’ trustees that the obligations were entitled to administrative priority, and the debtor appeals. We affirm on the basis of the statutory language, purpose, history, and the reasoning of our prior decisions. We also deal with the subsidiary issues of administrative priority for attorney’s fees and interest.

The debtor and lessee in this case is appellant Moshe Eliezer Cukierman, and the properties in question are two commercial properties in Berkeley, California. In December 1985, he sold the properties to Trans-Action Commercial Investors, Ltd. and Trans-Action Commercial Mortgage Investors, Ltd. (“TACI/TACMI”). Cukierman agreed to “lease and/or…