Tenant Bankruptcy Rejection Cost Calculator

BK rejection caps landlord claim. This calculator sizes allowed damages.

Annual rent

Years remaining

Re-lease annual rent

Downtime months

Allowed claim (502(b)(6))

$252,000

Statutory cap

$252,000

Mitigation gap

$118,000

How the math works

Cap = max(1 yr, 15% × years, capped at 3 yr). Claim = min(cap, actual damages).

On $240k rent × 7 years remaining: statutory cap = max(240k, 252k) capped at 720k = $252k. If actual damage exceeds cap, mitigation gap is uncollectible from BK estate. Security deposits and guaranties provide recovery outside the 502(b)(6) cap.

How to Use

Enter remaining lease rent.
Enter lease term remaining years.
Enter mitigation (re-lease) rent.
Enter downtime months.
Read allowed claim.

Frequently Asked Questions

Section 502(b)(6) cap?

Federal BK code caps lease rejection claim at greater of (a) 1 year rent, or (b) 15% of remaining term up to 3 years. Effectively capped at 3 years regardless of lease length. Landlord also recovers unpaid pre-petition rent without cap.

Practical recovery?

Landlord claim is unsecured. Typical Ch 11 recovery on unsecured: 5-30 cents on dollar. Recovery depends on BK plan. Secured reserves (security deposit, guaranty) recoverable outside 502(b)(6) cap. LOC and guaranties key.

Mitigation?

Re-lease efforts required. Landlord claim offset by rent collected from replacement tenant. Duty to mitigate — not just sit on empty space. Document lease-up marketing efforts for BK court evidence.