Summary
The United States Bankruptcy Court for the Northern District of Georgia held that a master lease covering multiple restaurant properties was severable under 11 U.S.C. § 365. The court determined that amendments allowing the landlord to sever individual properties and apportion rent altered the parties’ original intent that the lease be unseverable. Debtors were permitted to reject the lease as to certain properties and assume the remaining leases, subject to cure and adequate assurance of future performance.
Court
United States Bankruptcy Court for the Northern District of Georgia, Atlanta Division
Jurisdiction
United States Bankruptcy Court for the Northern District of Georgia, Atlanta Division
Decision date
June 12, 2026
Docket number
26-53945-SMS
Disposition
other
Questions Presented
- Whether the master lease was severable under 11 U.S.C. § 365.
- Whether the amendments to the original master lease changed the parties' agreement so that the lease could be severed and partially rejected.
- Whether the master lease was severable under applicable Georgia or Florida law based on the parties' intent, the allocation of consideration, and the interrelationship of the parties' obligations.
Holdings
- The master lease was severable, allowing the debtors to reject it as to some properties while assuming the remaining leases.
- The amendments transformed the parties' operative agreement into a severable lease.
- The master lease was severable under the applicable state-law analysis because the amendments made consideration distinct and permitted property-by-property severance, even though the purpose of leasing each property was similar.
Court Document
Open PDFLoading document…