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In Re: Park Avenue Garage, LLC v. Park Avenue Garage

UNITED STATES COURT OF APPEALS FOR THE SECOND CIRCUIT


December 14, 2010

IN RE: PARK AVENUE GARAGE, LLC, DEBTOR . 390 PARK AVENUE ASSOCIATES, LLC, CLAIMANT-APPELLANT ,
v.
PARK AVENUE GARAGE, LLC, DEBTOR-APPELLEE.

Appeal from the United States District Court for the Southern District of New York (Berman, J. ).

SUMMARY ORDER

SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. C ITATION TO A SUMMARY ORDER FILED ON OR AFTER J ANUARY 1, 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.

G A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS COURT, A PARTY MUST CITE EITHER THE F EDERAL A PPENDIX OR AN C DATABASE ( WITH THE NOTATION " SUMMARY ORDER"). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON NOT REPRESENTED BY COUNSEL.

At a stated term of the United States Court of Appeals for the Second Circuit, held at the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, in the City of New York, on the 14th day of December, two thousand and ten.

PRESENT: WILFRED FEINBERG,

BARRINGTON D. PARKER, RICHARD C. WESLEY, Circuit Judges .

UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED AND DECREED that the judgment of the district court be AFFIRMED.*fn1

Claimant-Appellant, 390 Park Avenue Associates, LLC, ("Landlord" or "Appellant") appeals from a December 23, 2009 judgment of the United States District Court for the Southern District of New York (Berman J. ), which affirmed two orders, dated June 1, 2009 and June 18, 2009, of the Bankruptcy Court for the Southern District of New York (Drain, J .). The June 1, 2009 order, as clarified by the June 18, 2009 order, authorized Debtor-Appellee, Park Avenue Garage, LLC, ("Debtor") to assume an unexpired non-residential lease and imposed certain additional obligations upon Debtor. We assume the parties' familiarity with the underlying facts, the procedural history, and the issues presented for review. *fn2

The bankruptcy court did not err in authorizing Debtor to assume the lease pursuant to Section 365(a) of the Bankruptcy Code. 11 U.S.C. § 365(a).*fn3 First the bankruptcy court's conclusion that assumption of the lease, in light of the totality of the circumstances, would benefit Debtor represents a valid exercise of the court's "business judgment." See In re U.S. Wireless Data, Inc ., 547 F.3d 484, 488 (2d Cir. 2008) (per curiam); see also In re Orion Pictures Corp. , 4 F.3d 1095, 1099 (2d Cir. 1993). The bankruptcy court's determination that assumption of the lease would allow Debtor to remain a going concern, and in combination with capital infusions by Mr. Sopher, potentially allow Debtor to return to profitability within the remaining life of the lease was not clearly erroneous.

Second, the bankruptcy court concluded that the combination of (1) Mr. Sopher's financial wherewithal and commitment to future performance; (2) "Debtor's performance obligations and resources," including an additional three-month security deposit; and (3) the condition, provided in the bankruptcy court orders, that Debtor's failure to perform certain court imposed obligations would result in rejection of the lease provided Landlord adequate assurance of prompt cure of past defaults and adequate assurance of future performance in satisfaction of Section 365(b)(1) of the Bankruptcy Code. 11 U.S.C. § 365(b)(1). On this record, the bankruptcy court's finding of the existence of adequate assurance was not clearly erroneous. See In re M. Fine Lumber Co. , 383 B.R. 565, 572--73 (Bankr. E.D.N.Y. 2008).

We have considered all of Appellant's arguments on appeal and find them to be without merit. For the foregoing reasons, the judgment of the district court is hereby AFFIRMED .

FOR THE COURT:

Catherine O'Hagan Wolfe, Clerk


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