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Click here for the full text of this decision FACTS:EOP-Colonnade of Dallas leased office space to Stonebridge Technologies. Under the lease, Stonebridge was to provide a $105,298 cash deposit, and to secure a $1.4 million letter of credit. Bank of Oklahoma issued the letter of credit in EOP’s favor, and Stonebridge executed a $1.25 million certificate of deposit payable to the bank to reimburse the bank in the event the letter of credit had to be drawn against. Almost exactly a year after signing the lease, owing EOP $71,895 for various charges and rent, Stonebridge filed for Chapter 11 bankruptcy. After filing the petition, Stonebridge paid EOP $50,000 to be applied against the rents owing. On Oct. 23, EOP and Stonebridge announced an agreement in which the lease would be rejected no earlier than Oct. 1 and no later than Oct. 23. Before this announcement, however, EOP initiated a draw request against the letter of credit on Oct. 22. The bank rejected the request because of technical deficiencies, but on Oct. 25, the bank processed a second, corrected request. The bank issued EOP a check for more than $1.4 million. On Nov. 8, the bankruptcy court entered a nunc pro tunc order approving the rejection of the lease as of Oct. 2. The court approved EOP’s administrative post-petition rent claim for $42,137, and the parties agreed that the pre-petition rent due from Sept. 1 to Sept. 5 was $17,569. EOP never filed a proof of claim for its actual lease rejection damages, however. On Dec. 12, the bank sought relief from the automatic stay to apply the certificate of deposit to the reimbursement owed it for what it paid out to EOP. The bank and Stonebridge’s trustee eventually agreed to allow the certificate of deposit to be applied in exchange for an assignment of the bank’s claims against EOP for an allegedly improper draw against the letter of credit. The trustee thus brought an adversary action against EOP in bankruptcy court, saying EOP breached the lease and made negligent representations to the bank, which led to the premature draw against the letter of credit, and retaining an amount in excess of the cap in Bankruptcy Code �502(b)(6). Section 502(b)(6) prevents a lessor who files a claim against the estate from reaping an unfair share of the bankruptcy estate over the remaining pool of unsecured creditors. The bankruptcy court ruled that EOP prematurely drew on the letter of credit, and, because the letter of credit was part of the security deposit, EOP also retained an amount in excess of the �502(b)(6) cap. The bankruptcy court found that EOP’s draw before the lease rejection order constituted a negligent misrepresentation to the bank that the full sum of the letter of credit was due and owing. The district court affirmed, and EOP appeals. HOLDING:Reversed and remanded. The court, on its own initiative, inspects the bankruptcy court’s, and hence the district court’s and its own, jurisdiction over the claims. The court says that two claims � 1. breach of the lease by the premature draw on the letter of the credit, and 2. breach of the lease by retaining an amount in excess of the �502(b)(6) cap � directly relate to damage allegedly done direction to the estate by EOP. The other two claims � 3. negligent misrepresentation that the sums were due and owing by prematurely drawing on the letter of credit, and 4. negligent misrepresentation that the sums were due and owing by drawing proceeds in excess of the �506(b)(6) cap � came to the trustee through assignment. The lease is property of the bankruptcy estate, so any breach of the lease (i.e., claims No. 1. and No. 2.) has an effect on the estate, and any recovery on the claims brought for the breach of the lease goes directly to the estate. Claims No. 3. and No. 4. do not obviously affect the estate, but the court says upon closer look, such an effect is evidence: a claim by the bank against EOP affects the need for the bank to seek reimbursement from Stonebridge’s bankruptcy estate. Having decided that all four claims are within general bankruptcy jurisdiction, the court then reviews whether they are core or noncore proceedings. On one hand, the court notes that the breach-of-lease claims are governed by specific Bankruptcy Code provisions, and are thus core proceedings. On the other hand, negligent misrepresentation claims are usually not considered to be core proceedings. “Although the grafting of bankruptcy terms onto the interpretation of a Lease does not automatically result in core jurisdiction, as a practical matter, these particular negligent misrepresentation claims are substantively related to the interpretation of rights created in bankruptcy. In other words, the substantive rights asserted by the Trustee could arise only in the context of a bankruptcy case. Because these claims are dependent upon the rights created in bankruptcy and would not exist but for the filing of Stonebridge’s bankruptcy, we find that these claims should be included within the bankruptcy court’s core jurisdiction.” The court observes that it is “well-established” in this circuit that letters of credit and the proceeds from them are not property of the debtor’s estate. Yet, �502(b) applies only to claims against the bankruptcy estate. Claims under �502(b) are not automatically assumed simply because the debtor assumes or rejects a lease under Bankruptcy Code �365, the court continues, but rather must be formally filed against the estate in the bankruptcy court. Thus, the �502(b)(6) damages cap does not apply to limit the beneficiary’s entitlement to the proceeds of the letter of credit unless and until the lessor makes a claim against the estate. The court notes that EOP did not file a claim against the estate. “In sum, � 502(b)(6) does not alter the entitlement of EOP to the full proceeds of the Letter of Credit in the case where EOP has not also filed a claim against the estate for recovery of unpaid lease monies. The bankruptcy court’s conclusion to the contrary was in error.” The court then reviews the breach-of-lease and negligent misrepresentation claims as they relate to the claims for premature draw. Interpreting the terms of the lease, the court finds that the lease’s acceleration clause permitted the draw by EOP when Stonebridge first defaulted on its rent payments. There was no misrepresentation to the bank, therefore. OPINION:Per curiam; King, C.J., Jolly and Dennis, JJ.

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