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  Los Angeles Lawyer
The Magazine of the Los Angeles County Bar Association
 
 

January 2012     MCLE Test and Answer Sheet

Test No. 210: The Pain of Rejection

 
 

Instructions for Obtaining MCLE Credit

The Los Angeles County Bar Association certifies that this activity has been approved for Minimum Continuing Legal Education credit by the State Bar of California in the amount of 1 hour. To apply for credit, please follow the instructions.

1. Study the CLE article.

2. Answer the test questions by marking the appropriate boxes. Each question has only one answer.

3. Photocopies of this answer sheet may be submitted; however, this form should not be enlarged or reduced. Mail the answer sheet and the $20 testing fee ($25 for non-LACBA members) to:

Los Angeles Lawyer
MCLE Test
P.O. Box 55020
Los Angeles, CA 90055 

Make checks payable to Los Angeles Lawyer.

4. You can also fill in the test form and submit it directly to LACBA by clicking "Submit." To submit your test answers online you will need to pay by credit card. After submitting your answers you will be presented with a screen requesting payment information. This information will be submitted in a secure mode which will allow you to safely transmit your credit card number over the Internet. If you prefer not to pay by credit card, please print this answer sheet and submit your responses by regular mail.

5. Within six weeks, Los Angeles Lawyer will return your test with the correct answers, a rationale for the correct answers, and a certificate verifying the CLE credit you earned through this self-assessment activity.

6. For future reference, please retain the CLE test materials returned to you.

 
  Test Sheet
 
 

Mark your answers to the test by clicking next to your choice.  All questions must be answered.  Each question has only one answer. This test is worth 1 hour of credit.*  

1. A tenant who attempts to gain leverage under its lease by threatening to file bankruptcy enables the landlord to terminate that lease.
 True.
 False.

2. Bankruptcy Code Section 502(b)(6) provides a formula for calculating damages under a lease.
 True.
 False.

3. Section 502(b)(6)'s cap on damages limits a landlord's recovery when the rent per square foot exceeds the statutory minimum.
 True.
 False.

4. If a tenant in bankruptcy rejects a lease with 22 years remaining on the term, the landlord's damages will be limited to three years' rent.
 True.
 False.

5. Section 502(b)(6)'s reference to the rent reserved under the lease "without acceleration" is evidence that the statute's limit on the landlord's damages is intended to measure time, not remaining rent.
 True.
 False.

6. Though courts are split on whether the 15 percent limitation on rent requires a measurement of rent or the remaining term of the lease, the distinction is ultimately unimportant to determining the landlord's damages.
 True.
 False.

7. Courts that have determined that measuring the total rent remaining under the lease rather than time is the better interpretation of Section 502(b)(6) have not identified compelling reasons for this conclusion.
 True.
 False.

8. A landlord may try to argue that expenses allocated to the tenant under the lease are not "rent" in order to avoid having those expenses subject to the Section 502(b)(6) cap.
 True.
 False.

9. A tenant that contaminates a property may receive an unintended windfall by invoking the Section 502(b)(6) cap on damages.
 True.
 False.

10. The Ninth Circuit's test for whether the landlord's damages are limited by the Section 502(b)(6) cap is whether the damages were the result of the lease rejection or some other event.
 True.
 False.

11. Maintenance expenses are likely to be excluded from rent reserved under the lease in applying the Section 502(b)(6) cap on damages.
 True.
 False.

12. The Ninth Circuit's determination of whether an expense should be considered rent reserved under the lease and thus subject to the cap on damages involves a three-prong test.
 True.
 False.

13. A landlord with a bankrupt tenant gains no benefit from holding a security deposit.
 True.
 False.

14. A landlord holding a claim against a tenant who has filed for bankruptcy protection would prefer to have its security deposit subtracted from the claim after the application of the statutory cap rather than subtracting the amount of the security deposit from the landlord's gross damages.
 True.
 False.

15. Congress intended to uphold the Oldden v. Tonto Realty Corporation rule that the security deposit should be subtracted from the total allowable claim.
 True.
 False.

16. According to In re Iron-Oak Supply Corporation, the reference in the statute to the "remaining term" indicates "a measure of time, not rent."
 True.
 False.

17. The Bankruptcy Code suggests that all damages due to a tenant's nonperformance are subject to the Section 502(b)(6) cap.
 True.
 False.

18. The bankruptcy court will determine whether the debtor can accept or reject its lease.
 True.
 False.

19. A policy reason for capping a landlord's damages in connection with the bankruptcy of the tenant is to ensure that the landlord's claim does not overwhelm the claims of other creditors.
 True.
 False.

20. Courts dealing with the delivery of a security deposit after the rejection of a tenant's lease in bankruptcy generally have not distinguished between a cash security deposit and a letter of credit.
 True.
 False.

Address and Billing

After submitting your answers you will be asked to enter your name, address, and payment information on the next screen. Once you have submitted the current form, you will be switched to a secure mode which will allow you to safely transmit your credit card number over the Internet.

If you do not wish to complete this transaction over the Internet you should print this page and send it to the address listed in Step 3 of the instructions at the top of this page.


 
Before clicking the Submit button, please verify that all questions have been answered. An error message will appear if not all questions are answered.

* The Los Angeles County Bar Association has been approved as a continuing legal education provider of Minimum Continuing Legal Education credit by the State Bar of California. This self-assessment activity will qualify for Minimum Continuing Legal Education credit by the State Bar of California in the amount of one hour.

 


 
   
 

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