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Note: Pathmark Stores, Inc. (Tenant) leased properties from Gator Monument Partners, LLLP (Landlord). Landlord sued Tenant for failure to comply with the lease, which required Tenant to obtain insurance. Landlord asserted that Tenant had obtained insurance policies with deductibles in excess of the amount allowed under the lease and self-insured retentions prohibited by the lease.

The Bankruptcy Court, Drain, J., ruled that Tenant's insurance policies were not in breach of the lease, but ordered Tenant to make certain cures to ensure that Landlord's own insurance would not be affected by any failure on the part of Tenant to pay the deductible.

Landlord appealed. The United States District Court for the Southern District of New York, Briccetti, J., affirmed, ruling that Tenant had adequately cured any gaps in insurance coverage by securing a standby letter of credit to cover any deductible payment that it might fail to make.

[JEB/cmh]

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