Megafoods Stores, Inc. v. Flagstaff Realty Associates

OPINION OF THE COURT

SAROKIN, Circuit Judge:

A landlord defaulted on its responsibility to make necessary repairs to the demised premises, and the commercial tenant, as provided in the lease, cured the default by making the repairs. The lease permitted the tenant to offset the cost of those improvements against future rents. The issue presented is whether the monies expended by the tenant before bankruptcy can be re couped or otherwise credited against rental payments due thereafter, where the landlord, now debtor-in-possession, rejects the lease. We conclude that they can, and thus reverse.

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