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file a rejection or assumption of the The Supreme Court or even argue cause to allow it to
leases. The Plan will also include declared four factors to file a late administrative claim and
a deadline to file administrative therefore did not allow the claim. The
claims. Administrative claims for determine excusable Court may have ruled differently had
landlords include rental payments neglect: “the danger the landlord shown that it did not
owed after the bankruptcy filing. of prejudice to the receive notice of the administrative
If the Plan does not include a dead- deadline or “other criteria that meets
line for administrative claims, then it debtor, the length the "excusable neglect” standard.”
is almost certain that the Confirmation of the delay and its The past 18 months have been
Order will include this information, potential impact on especially challenging for both land-
usually in bold or capitalized letters. lords and tenants due to the economic
Prudent landlords should continue to judicial proceedings, impacts of COVID-19. It may be
communicate with their attorney(s) the reason for the exponentially more difficult to locate
during the bankruptcy to prevent any delay including a new tenant than it is to work with a
miscommunications. It is worth noting current tenant. At least, if the tenant
administrative claims for post-petition whether it was within files bankruptcy, information and
rent are not filed like ordinary proofs the reasonable control knowledge about choices can help
of claim with the claims’ register. of the movant, and landlords protect their rights. N
Administrative claims are filed on
the Court’s docket as an application, whether the movant Angeline Vachris Kell is an Attorney
similar to a motion. If landlords do acted in good faith.” at HooverSlovacek LLP. She
not file the administrative claims as received her J. D. from South Texas
a separate document by the deadline College of Law and a Bachelor of
on the Court’s docket, the debtor or Arts with a major in Spanish from
plan administrator may object, and the the University of Texas. Mrs. Kell
Court may disallow the post-petition good faith.” Pioneer Inv. Servs. Co. v. is the Past President of the Hon.
administrative rent claim. Brunswick Assocs. Ltd. P'ship., 507 Arthur L. Moller/David B. Foltz, Jr.
U.S. 380, 395, 113 S. Ct. 1489, 123 L. American Inn of Court. Information
The deadline passed, now what? Ed. 2d 74 (1993). about Mrs. Kell is available https://
If the deadline to file an applica- A handful of notable bankruptcy hooverslovacek.com/attorneys/
tion for an administrative expense Courts have dealt with this issue. angeline-angie-kell/. Mrs. Kell may
claim has passed without filing a The Bankruptcy Court in the District be contacted by email at kell@
claim, the landlords should contact of Delaware decided this issue in hooverslovacek.com.
2
their counsel. Under Section 503(a), Bluestem. In Bluestem, the foreign
a landlord may “…tardily file such vendor sold goods post-petition but Stacey L. Kremling is an attorney
request if permitted by the court failed to file a timely application for at Womac Law. She received her
for cause.” 11 U.S.C. § 503(a). If a administrative expense claim on the J.D. from South Texas College of
landlord has proof that he/she did not Court’s docket. The Court found that Law and a Bachelor of Business
receive notice to file the administra- the foreign vendor was unfamiliar Administration from Southwest
tive claim by a date certain, usually with the United States bankruptcy Texas State University.
in a Confirmation Order, it may laws and did not receive notice to
petition the Court to allow a late-filed file the administrative claim due to Endnotes
administrative claim. postal delays during COVID-19. As 1. See Case No. 20-33163; In re CEC
Section 503(a) allows a landlord to the vendor could demonstrate “cause” Entertainment, Inc., et al; (Jointly Administered),
show cause for filing a late adminis- and “excusable neglect,” the Court In the United States Bankruptcy Court for the
trative claim. Courts generally apply reconsidered its late-filed claim and Southern District of Texas, Houston Division.
the “excusable neglect” standard granted it administrative status. (MI); Case No. 20-32564, In re Stages Stores,
set forth by the Supreme Court in The Northern District of Texas Inc. (Jointly Administered), In the United States
Bankruptcy Court for the Southern District
Pioneer. The Supreme Court declared Bankruptcy Court, in Taco Bueno, of Texas, Houston Division. (DRJ); Case No.
four factors to determine excusable also considered this issue, disallow- 20-20182, In re J.C. Penny Company, Inc. (Jointly
3
neglect: “the danger of prejudice to ing the administrative claim. The Administered), In the United States Bankruptcy
the debtor, the length of the delay landlord requested post-petition rent Court for the Southern District of Texas,
and its potential impact on judicial in its proof of claim filed in the claim’s Houston Division. (DRJ)
proceedings, the reason for the delay registry and not as an application for 2. In re Bluestem Brands, Inc., 70 Bankr. Ct. Dec.
(LRP) 145, 2021 Bankr. LEXIS 1980 (Bankr. D. Del.
including whether it was within the administrative expense filed on the July 27, 2021).
reasonable control of the movant, Court’s docket. The Court noted that 3. In re Taco Bueno Rests., Inc., 606 B.R. 289, 301
and whether the movant acted in the landlord failed to demonstrate (Bankr. N.D. Tex. 2019).

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