Attorney Fees - Issue 2

There are no generally applicable statutes or cases for this issue.

A lessor should make sure that the attorneys’ fees provisions of its leases are broadly written to encompass not only costs of enforcing lease obligations, but also all costs incurred in protecting the lessor’s interests, including fees expended in any insolvency proceeding. For example, if a lease provides for the award of fees only for “collection,” it will not cover the fees incurred in protecting the lessor’s interest in the lessee’s bankruptcy. Much of the work in a bankruptcy relates to assumption or rejection of a lease under Section 365(b)(1) of the Bankruptcy Code, or to determining whether a plan of reorganization should be contested or not. See, e.g., In re Entm’t, Inc., 223 B.R. 141, 149 (Bankr. N.D. Ill. 1998) (examining the language of the attorneys’ fees and costs clause of a lease to determine which of the attorneys’ fees would be awarded).