Trustees Main/270, LLC v. ApplianceSmart, Inc.: Sixth Circuit Holds Shopping-Center Landlord Could Reject Replacement Tenants Tied to Its Defaulting Tenant

A Sixth Circuit panel affirmed a judgment for Trustees Main/270, LLC, owner of a Columbus, Ohio shopping center, against its former big-box tenant ApplianceSmart, Inc. and the lease guarantor JanOne, Inc. The defendants argued the landlord had failed to mitigate its damages by turning down two replacement tenants that the guarantor and an affiliated company had proposed. The court held that Ohio law does not make a commercial landlord deal with replacement tenants that carry an undue risk of another default, and that the landlord's multi-year search, which ended in an AutoZone lease, was a reasonable effort to mitigate.

Why it matters

The ruling gives commercial landlords in Ohio, and in other states that use the Restatement's reasonable-efforts test, room to turn down a substitute tenant offered by a defaulting tenant's own corporate family. It also holds that conditions such as prepaying the arrears and posting a nonrefundable deposit can be reasonable when a related party wants to take over the lease. Guarantors should expect that a slow re-leasing process for specialized big-box space will not, by itself, defeat the landlord's damages claim.

Case timeline · 3 entries Latest: October 7, 2026 — Sixth Circuit affirms judgment for landlord, holding its mitigation efforts were reasonable

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