Arizona Appetito's Stores, Inc. v. Paradise Village Investment Co. (In re Arizona Appetito's Stores, Inc.)

Arizona Appetite’s Stores, Inc. (Appetite’s), a Chapter 11 debtor-in-possession, appeals the denial of its motion to assume a ground lease for nonresidential real property after having filed a motion to reject the lease. Appetite’s contends that it could assume the lease even after the expiration of the sixty-day period set forth in 11 U.S.C. § 365 (d)(4) because its motion to reject, filed within the sixty-day period, prevented the lease from being “deemed rejected” under 11 U.S.C. § 365 (d)(4). Court approval, Appetite’s argues, is required to make rejection effective.

Both the bankruptcy and the district courts ruled that because Appetite’s failed to file a motion to assume the lease within the statutory period, the lease had been deemed rejected under section 365(d)(4). We affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Appetite’s filed a voluntary Chapter 11 bankruptcy petition on September 10, 1987. When listing its executory contracts as property of its estate, Appetite’s listed a ground lease in a shopping center in Paradise Valley, Arizona owned by Paradise Village Investment Company (PVIC).

That lease, subject of this appeal, was executed between PVIC as lessor and RBG…