In re I-Mind Education Systems, Inc.

Memorandum re Attorneys’ Fees

After several hearings, the court granted the Chapter 7 trustee’s motion to assume a real property lease. The lessors asserted, as part of the cost of curing defaults, that they recover their reasonable attorneys’ fees. The trustee has objected, arguing that there is no basis for the award of attorneys’ fees as part of the cost of assumption. The notion that a landlord must always be compensated for attorneys’ fees upon assumption of a lease has been soundly rejected. In re Westside Print Works, Inc., 180 B.R. 557, 563-64 (9th Cir. BAP 1995); In re Shangra-La, Inc., 167 F.3d 843 , 849 (4th Cir.1999). On the other hand, the landlord is entitled to recovery of its attorneys’ fees if the lease clearly provides for them. Thus, if the lease contained a provision requiring the lessee to pay a reasonable attorney’s fee if the lessor employs an attorney by reason of the lessee’s default, then the lessors would be entitled to recover their attorneys’ fees. In re Bullock, 17 B.R. 438, 439 (9th Cir. BAP 1982). Unfortunately for the lessors in this case, the attorneys’ fee provision in their lease was not drafted broadly enough to allow recovery of their fees…