In Re Jamesway Corporation

201 B.R. 73 (1996)

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Nature of the Case

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Facts

On October 18, 1995, P and its affiliates filed Chapter 11. P operated discount department stores under the 'Jamesway' name. Ps are in possession of their businesses and properties as debtors-in-possession pursuant to §§ 1107 and 1108 of the Bankruptcy Code. P and Mass Mutual (D) were parties to an agreement dated July 16, 1986, whereby P, as tenant, leased certain retail space located in the Newberry Commons shopping center. The lease states in relevant part that: if Tenant assigns this Lease or sublets all or substantially all of the demised premises (not including an assignment or sublease to an affiliate, parent or subsidiary of Tenant, or to a successor to Tenant by merger, consolidation or operation of law), and such assignment or subletting commences in or extends into the extension periods reserved under Article 3 of this Lease, then during the first twenty (20) years of such extension periods in which such assignment or sublease is in effect, Tenant shall pay Landlord 50% of the 'profits' received by Tenant from the assignee or sublessee. Thereafter, Tenant shall pay Landlord 60% of such profits. Over D's objection, the motion was granted. Both P and D agreed to defer the validity of the profit issue. P requested that the court hold the clause unenforceable.