On a request for payment of certain administrative expense claims filed by the debtor's landlords, the court addressed four questions:
1. Are the administrative expense claimants entitled to immediate payment of allowed administrative expense claims other than as set forth in the Confirmation Order? The court granted the request for immediate payment of § 365(d)(3) post-petition/pre-rejection lease obligations and ruled that the § 503(b)(1) claims for the costs of preserving the estate are simply entitled to § 507(a)(2) priority and would be paid in accordance with the terms of the plan.
2. Are the landlords are entitled to administrative expense claims for stub rent? The court extensively analyzed the Eighth Circuit Court of Appeals decisions of Burival and Wedemeier and determined that Burival, with its endorsement of the "billing date" approach to § 365(d)(3) obligations, did not overrule Wedemeier's use of "the reasonable rental value of the property" to provide a measure of the administrative claim for rent under § 503(b)(1). Therefore, the court ruled the landlords are entitled to an administrative expense claim under § 503(b)(1) for the debtor's use of the properties between the petition date and the date the first post-petition rent payment was due.
3. Are the landlords entitled to administrative expense claims for the prorated portion of base rent or additional rent items (e.g. taxes, utilities, etc.) billed or payable post-rejection but attributable to the post-petition/pre-rejection period? The court said, "Clearly, under Burival, such charges would constitute administrative expenses if billed to the tenant prior to rejection. However, if such items were not billed before lease rejection, the provisions of § 365(d)(3) – which address post-petition lease obligations – preempt the application of § 503(b)(1) to such charges." Because these post-petition charges were not billed during the post-petition/pre-rejection period, the landlords are not entitled to claim them as administrative expenses.
4. Are the landlords entitled to administrative expense claims for additional rent items attributable to the pre-petition period that become due or payable post-rejection? For the reasons stated in the preceding paragraph, the court also denied this request.