Ninth Circuit ruling allows landlords to seek more damages against bankrupt tenants

January 17, 2017Media Mention
Legal News Line

SAN FRANCISCO (Legal Newsline) – A recent ruling from the U.S. Court of Appeals for the Ninth Circuit will help California landlords seek and claim more damages against tenants who file for bankruptcy.

The Dec. 29 ruling helps clarify when claims against bankrupt tenants for damages can and cannot be limited, or capped.

It was found that, because the tenant in the case owed more than $1.3 million in damages and arbitration fees before filing for bankruptcy, the entire amount would be awarded to the landlord because the damages didn't directly stem from a termination of the lease. Therefore, the damages claims would not be capped.

Jeff Krieger, partner at Greenberg Glusker and business lawyer, believes the Ninth Circuit made a correct ruling on the subject and took a logical approach in its decision. "I actually kind of think the decision was correct ... it didn't just go all one way and all the other way," Krieger told Legal Newsline. "If the attorney's fees related to something that was capped, then the attorney's fees were part of the cap, and vice versa."