Park Avenue Associates, LLC v. Park Avenue Garage, LLC , 403 F. App'x 555 ( 2010 )

10-455-bk and 10-391-bk
In Re: Park Avenue Garage, LLC
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
R ULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT . C ITATION TO A SUMMARY ORDER FILED ON OR AFTER J ANUARY 1,
2007, IS PERMITTED AND IS GOVERNED BY F EDERAL R ULE OF A PPELLATE P ROCEDURE 32.1 AND THIS COURT ’ S L OCAL R ULE 32.1.1.
W HEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT , A PARTY MUST CITE EITHER THE F EDERAL A PPENDIX OR AN
ELECTRONIC DATABASE ( WITH THE NOTATION “ SUMMARY ORDER ”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON
ANY PARTY NOT REPRESENTED BY COUNSEL .
1 At a stated term of the United States Court of Appeals
2 for the Second Circuit, held at the Daniel Patrick Moynihan
3 United States Courthouse, 500 Pearl Street, in the City of
4 New York, on the 14 th day of December, two thousand and ten.
5
6 PRESENT: WILFRED FEINBERG,
7 BARRINGTON D. PARKER,
8 RICHARD C. WESLEY,
9 Circuit Judges.
10
11
12
13 IN RE: PARK AVENUE GARAGE, LLC,
14
15 Debtor.
16
17 _______________________________________
18
19 390 PARK AVENUE ASSOCIATES, LLC,
20
21 Claimant-Appellant,
22
23 -v.- 10-455-bk, 10-391-bk
24
25 PARK AVENUE GARAGE, LLC,
26
27 Debtor-Appellee.
28
29
30
1 FOR APPELLANT: RALPH BERMAN, (Adrian Zuckerman, on the
2 brief), Epstein, Becker & Green, P.C.,
3 New York, NY.
4
5 FOR APPELLEE: ROBERT R. LEINWAND, Robinson, Brog,
6 Leinwand, Greene, Genovese & Gluck P.C.,
7 New York, NY.
8
9 Appeal from the United States District Court for the
10 Southern District of New York (Berman, J.).
11
12 UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED
13 AND DECREED that the judgment of the district court be
14 AFFIRMED. 1
15 Claimant-Appellant, 390 Park Avenue Associates, LLC,
16 (“Landlord” or “Appellant”) appeals from a December 23, 2009
17 judgment of the United States District Court for the
18 Southern District of New York (Berman J.), which affirmed
19 two orders, dated June 1, 2009 and June 18, 2009, of the
20 Bankruptcy Court for the Southern District of New York
21 (Drain, J.). The June 1, 2009 order, as clarified by the
22 June 18, 2009 order, authorized Debtor-Appellee, Park Avenue
23 Garage, LLC, (“Debtor”) to assume an unexpired non-
24 residential lease and imposed certain additional obligations
25 upon Debtor. We assume the parties’ familiarity with the
1
This Order disposes of both appeals corresponding to
docket numbers 10-455 and 10-391. As both parties
recognize, these two appeals involve overlapping issues and
arguments.
2
1 underlying facts, the procedural history, and the issues
2 presented for review. 2
3 The bankruptcy court did not err in authorizing Debtor
4 to assume the lease pursuant to Section 365(a) of the
5 Bankruptcy Code. 11 U.S.C. § 365(a). 3 First the bankruptcy
6 court’s conclusion that assumption of the lease, in light of
2
During the pendency of this appeal, on motion by the
United States Trustee, the bankruptcy court dismissed
Debtor’s Chapter 11 petition. The dismissal order provides
that “all orders heretofore entered in this Chapter 11 case
shall remain in full force and effect” except as otherwise
provided by law. “[B]ankruptcy courts retain jurisdiction
after a case has been dismissed or closed to interpret or
enforce previously entered orders.” Gulf Ins. Co. v.
Glasbrenner, 343 B.R. 47, 56 (S.D.N.Y. 2006) (quoting In re
Williams, 256 B.R. 885, 892 (8th Cir. BAP 2001)). This
Court has the authority to grant Appellant the relief it
seeks. Further, the bankruptcy court has the authority to
interpret the effect of our decision upon the parties’
rights and liabilities which have been altered by the
bankruptcy proceedings and which, as provided in the
dismissal order, remain effective to this date. Therefore,
we reject Debtor’s argument that this appeal is moot.
3
“The rulings of a district court acting as an
appellate court in a bankruptcy case are subject to plenary
review.” In re Stoltz, 315 F.3d 80, 87 (2d Cir. 2002).
Consequently, “[i]n an appeal from a district court’s review
of a bankruptcy court decision, we review the bankruptcy
court decision independently, accepting its factual findings
unless clearly erroneous but reviewing its conclusions of
law de novo.” In re Enron Corp., 419 F.3d 115, 124 (2nd
Cir. 2005). “[T]he issue raised by the [Bankruptcy] Court’s
finding . . . that ‘adequate assurance’ existed is one of
fact” and should be reviewed under the “clearly erroneous
standard for review.” In re Sanshone Worldwide Corp., 139
B.R. 585, 590 (S.D.N.Y. 1992).
3
1 the totality of the circumstances, would benefit Debtor
2 represents a valid exercise of the court’s “business
3 judgment.” See In re U.S. Wireless Data, Inc., 547 F.3d
4 484, 488 (2d Cir. 2008) (per curiam); see also In re Orion
5 Pictures Corp., 4 F.3d 1095, 1099 (2d Cir. 1993). The
6 bankruptcy court’s determination that assumption of the
7 lease would allow Debtor to remain a going concern, and in
8 combination with capital infusions by Mr. Sopher,
9 potentially allow Debtor to return to profitability within
10 the remaining life of the lease was not clearly erroneous.
11 Second, the bankruptcy court concluded that the
12 combination of (1) Mr. Sopher’s financial wherewithal and
13 commitment to future performance; (2) “Debtor’s performance
14 obligations and resources,” including an additional three-
15 month security deposit; and (3) the condition, provided in
16 the bankruptcy court orders, that Debtor’s failure to
17 perform certain court imposed obligations would result in
18 rejection of the lease provided Landlord adequate assurance
19 of prompt cure of past defaults and adequate assurance of
20 future performance in satisfaction of Section 365(b)(1) of
21 the Bankruptcy Code. 11 U.S.C. § 365(b)(1). On this
22 record, the bankruptcy court’s finding of the existence of
4
1 adequate assurance was not clearly erroneous. See In re M.
2 Fine Lumber Co., 383 B.R. 565, 572–73 (Bankr. E.D.N.Y.
3 2008).
4 We have considered all of Appellant’s arguments on
5 appeal and find them to be without merit. For the foregoing
6 reasons, the judgment of the district court is hereby
7 AFFIRMED.
8
9 FOR THE COURT:
10 Catherine O’Hagan Wolfe, Clerk
11
12
5