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In re TSB, Inc.

United States Bankruptcy Court for the District of Idaho
302 B.R. 84 (2003)


TSB, Inc. (TSB) (debtor) operated a tavern and leased its premises from Knapp-Block 44, LLC (Knapp). TSB filed for reorganization under chapter 11 of the bankruptcy code. Knapp continued to operate the business as a debtor in possession. The court converted the reorganization to a chapter 7 liquidation and appointed a trustee. The trustee took possession of the business. Knapp soon informed the trustee that it would lease the premises to City Grill. City Grill also wished to purchase some of the tavern’s property, including tables, chairs, and bar equipment. The trustee left the property on the premises with the understanding that City Grill would purchase the property. Meanwhile, Knapp completed the new lease with City Grill and allowed City Grill to begin renovating the premises. The estate property remained on the premises for over three months, from the date the lease was deemed rejected until it was sold to City Grill. The storage of this estate property took up about 10 percent of the total space of the premises. Knapp filed an application with the bankruptcy court for an administrative claim for rent allegedly accrued during the time that the property sat in the unused premises.

Rule of Law


Holding and Reasoning (Myers, J.)

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