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Commercial Lease Claims and Environmental Cleanup Claims In Bankruptcy Law

By Andrew C. Kassner and Joseph N. Argentina Jr.
November 01, 2025

Since enactment of the Bankruptcy Code, certain types of claims continue to be vigorously litigated, perhaps because adjudication requires a fact-intensive analysis by the court. In the commercial real estate sector, such examples include landlord-tenant commercial real estate lease claims and the disposition of environmental cleanup claims under state and federal law. In this article, we report on two recent decisions. One involves the calculation of landlord damage claims and the extent such claims are subject to the damage cap under Section 502 of the Bankruptcy Code. The other involves whether environmental clean-up claims under federal and state law for commercial real estate were discharged under a confirmed Chapter 11 plan.

State Law Environmental Claims Accrued Before Bankruptcy but Not Federal CERCLA Claims


In In re Weiand Automotive (Case No. 09-13338 (TMH)), the U.S. Bankruptcy Court for the District of Delaware recently adjudicated the issue of whether certain state and federal environmental claims were discharged under a confirmed Chapter 11 plan that was confirmed back in 2010. After extensive discovery and an evidentiary hearing, the court held the state law claims had been discharged because they accrued when the claimant knew or should have known of the contamination, prior to confirmation of the plan. However, the federal law claims were not discharged because under the federal CERCLA statute, the claims accrued when the claimant incurred response costs, which happened after plan confirmation.

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