In Re Standor Jewelers West, Inc.

129 B.R. 200 (1991)


Standor (P), filed Chapter 11.P sought to assume and assign the lease to Sterling Inc. D objected to because of an alleged refusal to provide D with 'adequate assurances' that the lessee would comply with a provision in the Lease requiring the lessee to remit to the landlord 75% of the appreciation in value of the Lease as a condition to the landlord's consent to any assignment. The court held that, even if the provision of the Lease allocating 75% of the value of the leasehold to the landlord as a condition of the assignment was valid under state law, that provision constituted a restriction on transfer of the lease which was preempted by and invalid pursuant to § 365(f). D had no entitlement to any part of the $350,000.00 allocated by Sterling.  D claims that it is entitled to $262,500.00 of the $350,000.00 held in the constructive trust.