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1440 Richmond Realty Corp. v. Four Bridges Development Corp.

Other Lower Courts

May 4, 2001

1440 Richmond Realty Corp., Doing Business as Vitale Sunshine Realty, Plaintiff,
v.
Four Bridges Development Corporation, Doing Business as The Atrium, et al., Defendants.

COUNSEL

Olshan, Grundman, Frome, Rosenzweig & Wolosky for Bern Realty, Inc., defendant.

O'Neill, Stern & O'Neill for Four Bridges Development Corporation, defendant.

Decker & Decker for plaintiff.

OPINION

Joseph J. Maltese, J.

This Court holds that the plaintiff's action for a real estate broker's commission was not discharged by the defendant's

Page 43

bankruptcy.T he burden of proving that the plaintiff creditor had notice or actual knowledge of a bankruptcy proceeding is upon the defendant debtor.

Facts

In May of 1993, the plaintiff who is a real estate broker procured 680 Cinema Corp. as a tenant for a 10-year lease for a movie theater for the codefendant Four Bridges Development Corporation (FBDC), who was the net lessee of the Four Bridges South Shopping Plaza owned by the codefendant Bern Realty, Inc. (Bern). This action for the broker's commission was commenced in August 1993 against FBDC. On March 7, 1997, 680 Cinema Corp. and Bern executed an " Extension and Modification of Lease" which provided, inter alia, that the lease between FBDC and 680 Cinema Corp. was terminated, and that FBDC's rights and obligations under the lease have been assigned to and assumed by Bern.

After the assignment from FBDC to Bern and upon learning that FBDC and Bern shared common stockholders, plaintiff sought an order to amend its complaint to include Bern as an additional party defendant. That order was granted by Justice Frank V. Ponterio, on January 19, 1999.

Bern maintains that it never entered into any contract with plaintiff for the payment of a real estate commission and, even assuming that Bern was the assignor or " alter ego" of FBDC, any debts owed by Bern have been discharged in bankruptcy. Bern contends that since the plaintiff's claim arose in 1993, when plaintiff allegedly procured a tenant for Bern's property, any debt based on this claim was extinguished by the Bankruptcy Court's order confirming the Sixth Amended Plan of Reorganization under chapter 11 of the Bankruptcy Code (11 U.S.C.). The order confirming the plan discharged the debtor (Bern) from any and all claims that accrued on or before February 4, 1997 and created a permanent injunction barring any attempts to collect such debts prior to that date against Bern.

Discussion

Bankruptcy Code ยง 1141 (d) (1) (A) (i) provides that confirmation of a chapter 11 reorganization plan " discharges the debtor from any debt that arose before the date of such confirmation ... whether or not ... proof of the claim based on such debt is filed." Exceptions to this general rule are set forth in section 523 of the Bankruptcy Code. ...


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