UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT

August Term, 2024

(Argued: October 23, 2024 Decided: February 3, 2025)

Docket No. 24-255-bk

IN RE: AVIANCA HOLDINGS S.A., Debtor.

AVIANCA HOLDINGS S.A.,

Debtor-Appellant,

— v. —

BURNHAM STERLING & COMPANY LLC and BABCOCK & BROWN SECURITIES LLC,

Creditors-Appellees.*

B e f o r e:

WESLEY, LYNCH, and KAHN, Circuit Judges.

* The Clerk of Court is respectfully directed to amend the official caption in this case to conform to the caption above. __________________

Debtor-Appellant Avianca Holdings S.A. agreed to pay the Creditor- Appellees Burnham Sterling and Company LLC and Babcock & Brown Securities, LLC (the “Initiators”) additional rental payments on a fixed schedule in 20 different aircraft leases. Avianca failed to pay certain of those additional rental payments that came due more than 60 days after Avianca filed for bankruptcy but before the leases were assumed or rejected. The Initiators accordingly moved to compel payment under 11 U.S.C. § 365(d)(5), which requires the debtor-in-possession to “timely perform all of the obligations of the debtor . . . first arising from or after 60 days after the order for relief . . . under an unexpired lease of personal property . . . until such lease is assumed or rejected.” The bankruptcy court (Jones, J.) granted the motion, concluding that Avianca’s obligation to pay first arose when the additional rental payments came due under the fixed schedule in the leases. Avianca appealed, and the district court (Failla, J.) affirmed. Avianca now appeals to us, arguing that its obligation to pay the additional rental payments first arose pre-petition when the leases were executed. For the reasons discussed below, we agree with the bankruptcy court and hold that the additional rental payments first arose as they came due under the leases’ terms.

AFFIRMED.

MICHAEL F. HOLBEIN, (John G. McCarthy, on the brief), Smith, Gambrell & Russell, LLP, Atlanta, GA and New York, NY, for Debtor- Appellant Avianca Holdings S.A.

PETER FRIEDMAN, (Matthew P. Kremer and Nicole Molner, on the brief), O’Melveny & Myers LLP, New York, NY, for Creditors- Appellees Burnham Sterling and Company LLC and Babcock & Brown Securities LLC.

2 GERARD E. LYNCH, Circuit Judge:

When Debtor-Appellant Avianca Holdings S.A. filed for bankruptcy, it stopped paying Creditors-Appellees Burnham Sterling and Company LLC and Babcock & Brown Securities, LLC (the “Initiators”) additional rental payments that it owed them under pre-set schedules contained in 20 unexpired airplane leases. Under those schedules, certain of those additional rental payments came due more than 60 days after Avianca filed for bankruptcy but before Avianca assumed or rejected the operative leases. The Initiators moved to compel payment of those additional rental payments on a priority basis under 11 U.S.C. § 365(d)(5). The bankruptcy court (David S. Jones, J.) granted the motion. On appeal, the district court (Katherine P. Failla, J.) agreed with the bankruptcy court’s decision and affirmed. Avianca now appeals to us. For the reasons discussed below, we AFFIRM the judgment of the district court.

BACKGROUND

Debtor-Appellant Avianca Holdings S.A., one of t