In re Peach Auto Painting & Collision, Inc. (00-41598)

In a motion to compel Debtor to surrender leased premises, the court held that although the bankruptcy court has the authority to enter such an order, relief in favor of Movant is not proper in this case. Movant leased operating premises to the equity owner of Debtor who allowed Debtor to use the leased premises. After the lease was deemed rejected under § 365, Movant obtained relief from the automatic stay. However, Debtor remained in possession of the property at the express permission of the equity owner. Therefore, the court held that Debtor’s right to remain in possession was dependent upon the rights of the equity owner, an issue currently pending in state court.

Thursday, March 1, 2001