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absent modification pursuant to § 1113, all claims arising under an unmodified collective bargaining agreement must be paid in full, even if they arose propitiation.112 The Second and Third Circuits have rejected that analysis, concluding that such claims are subject to the priority rules of §§ 502, 503 and 507.113
The Code imposes specific obligations on debtors who are lessees of nonresidential real property: a requirement to keep current obligations current, beginning within 60 days after the commencement of the case, § 365(d)(3); and a requirement to or assume or reject such leases 120 days (60 days pre-BAPCPA) after the commencement of the case, or else they will be deemed rejected, unless the court extends that time within such period. These requirements frequently lead to litigation early in a chapter 11 case.
Section 365(d)(3) requires the debtor to keep current on all obligations arising under a nonresidential real property lease from and after the commencement of the case (and § 365(d)(10) similarly provides for personal property leases). It permits courts to extend the time for performance, but not beyond the 60th day after commencement of the case. As a practical matter most debtors seem to assume the Code provides an automatic 60-day moratorium, rather than seeking a court order extending the performance time for 60 days, and most landlords seem to abide this process.
112 United Steelworkers of Am. V. Unimet Corp. (In re Unimet), 842 F.2d 879 (6th Cir.), cert. denied, 488 U.S. 828,
109 S. Ct. 81 (1988).
113 International Brotherhood of Teamsters v. Roth American, Inc. (In re Roth American, Inc.), 975 F.2d 949 (3d
Cir. 1992); Air Line Pilots Assoc., Intl. . Shugrue (In re Ionoshpere Clubs, Inc.), 22 F.3d 403 (2d Cir. 1994).
Accord, In re Kitty Hawk, Inc., 2000 WL 1769701 (Bankr. N.D. Tex. 2000)(good discussion of these cases and their
reasoning).
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