subtenants from hell
DESCRIPTION
Joe Francis lost control of a Girls Gone Wild production team in Chapter 11, and has been trying, unsuccessfully, to evict them from his property ever since. Here his lawyer uses sophisticated legal terminology, like "subtenant from hell," to urge the bankruptcy court to kick out the Girls Gone Wild team.TRANSCRIPT
MOTION TO COMPEL SURRENDER
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KOLODZI LAW FIRM
5981 Topanga Canyon Boulevard
Woodland Hills, California 91367
MICHAEL D. KOLODZI, STATE BAR NO. 255772
KOLODZI LAW FIRM
5981 Topanga Canyon Boulevard
Woodland Hills, CA 91367
Telephone: 818.287.7173
Facsimile: 866.571.6094
Email: [email protected]
Attorney for PERFECT SCIENCE LABS, LLC
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
LOS ANGELES DIVISION
In re GGW BRANDS, LLC, GGW DIRECT, LLC, GGW EVENTS, LLC, GGW MAGAZINE, LLC, and GGW MARKETING, LLC
Debtors. This pleading affects: All Debtors ☒ GGW Brands, LLC ☐ GGW Direct, LLC ☐ GGW Events, LLC ☐ GGW Magazine, LLC ☐ GGW Marketing, LLC ☐
Jointly Administered Under Case No. 2:13-bk-15130-SK Chapter 11 PERFECT SCIENCE LABS, LLC’S REPLY TO OPPOSITION TO MOTION TO COMPEL SURRENDER OF COMMERCIAL PROPERTY LOCATED AT 10940 WILSHIRE BLVD, SUITE 1000, LOS ANGELES, CA 90024 PURSUANT TO 11 U.S.C. §365(d)(4) Hearing: Date: March 20, 2014 Time: 8:30 a.m. Judge: Hon. Sandra R. Klein U.S. Bankruptcy Court 255 E. Temple St. Courtroom 1575 Los Angeles, CA 90012
PERFECT SCIENCE LABS, LLC (“PSL”), by and through the undersigned counsel,
hereby files the following Reply to the opposition to motion to compel the Debtors to surrender
commercial property located at 10940 Wilshire Blvd., Suite 1000, Los Angeles, California 90024
pursuant to 11 U.S.C. §365(d)(4).
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KOLODZI LAW FIRM
5981 Topanga Canyon Boulevard
Woodland Hills, California 91367
I. SUBTENANTS FROM HELL
The Chapter 11 Trustee and his Debtors are truly subtenants from hell.
Virtually immediately upon becoming Chapter 11 Trustee, R. Todd Neilson, came to this
court and obtained an order preventing PSL and its officers from having access to PSL’s own
office within the space sublet by the Chapter 11 Trustee and Debtors from PSL.
After almost a year, the Chapter 11 Trustee has failed to assume or reject the oral
sublease pursuant to which it occupies the premises in question and therefore is deemed to have
rejected the sublease, BUT REFUSES TO LEAVE.
Incredibly, the Chapter 11 Trustee questions in his Opposition how a surrender of the
premises could possibly occur since there is an injunction preventing PSL from going onto the
premises.
The answer is easy.
The surrender can work by the Chapter 11 Trustee and Debtors LEAVING THE
PREMISES, as they are now required to do UNDER Section 365(d)(4) since they have failed to
assume or reject the lease.
II. THE STIPULATION AND ORDER APPROVING STIPULATION
In its Opposition, the Chapter 11 Trustee mischaracterizes the Stipulation that Joseph
Francis and Abbey Wilson were coerced to enter into in May, 2013, and mischaracterizes the
Order approving such Stipulation.
A. Stipulation and Consent Order Do Not Require PSL to Bring a Motion for
Relief to Obtain Return of Premises and Do Not Require Surrender of
Vehicles As Condition Precedent to Bringing Present Motion for Surrender
Contrary to the assertion of the Chapter 11 Trustee, there is no provision in the
Stipulation in which “PSL agreed not to terminate the Trustee’s month-to-month lease on or
occupancy of the Premises without first seeking relief from the automatic stay and returning two
luxury vehicles.”1
Talk about revisionist history.
1 Opposition, Doc. 521, pg. 2, Lines 8-10.
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KOLODZI LAW FIRM
5981 Topanga Canyon Boulevard
Woodland Hills, California 91367
Perhaps that is the way the Chapter 11 Trustee wished that the Stipulation and the Order
read, but that is not what they say, in reality.
The Stipulation2 states in Paragraph 10.d.:
“Prior to moving for relief from the automatic stay to
terminate the trustee’s month-to-month lease on or
occupancy of the Premises, Mr. Francis and Perfect Science
agree to deliver to the Trustee or his designated
representative the Vehicles and all keys to the Vehicles.”
The Consent Order3 contains the exact same language in Paragraph 13 thereof.
Contrary to the assertion of the Chapter 11 Trustee, the above language does not require
that PSL bring a motion for relief in order to obtain the return of its Premises. The language
merely requires that IF a motion for relief is to be brought, PSL must first surrender the vehicles.
PSL has not violated the Stipulation by the present Motion because PSL is not moving for
relief from the automatic stay.
The present Motion for Surrender under Section 365(d)(4) is an entirely different
proceeding from a motion for relief from stay under Section 362 of the Bankruptcy Code.
As the Chapter 11 Trustee points out in his Opposition, the Stipulation was a contractual
agreement “carefully negotiated” between the Chapter 11 Trustee and PSL. In none of the
“carefully negotiated” provisions of the Stipulation does PSL condition its rights under Section
365(d)(4) to a surrender of the vehicles.
A stipulation is a contract and therefore basic contract principles are used to interpret a
stipulation. Jeff D v. Andrus, 899 F.2d 753, 759 (9th
Cir. 1989).
Under contract interpretation rules, a court is obligated to follow a “plain meaning
analysis” and give a clear and explicit contract provision its plain meaning. In re Utnehmer, 499
B.R. 705 (B.A.P. 2013).
In the present instance, the clear and explicit meaning of Paragraph 10.d. of the
Stipulation is that it applies only in instances where a motion for relief is sought under Section
2 Adversary Case No. 2:13-ap-01468-SK, Doc. 30 3 Adversary Case No. 2:13-ap-01468-SK, Doc. 32
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KOLODZI LAW FIRM
5981 Topanga Canyon Boulevard
Woodland Hills, California 91367
363 and does not apply to a surrender motion under Section 365(d)(4).
If the Chapter 11 Trustee and PSL had intended Paragraph 10.d. of the Stipulation to have
the broad meaning that the Chapter 11 Trustee is now claiming, they could have merely phrased
it as “Prior to terminating the trustee’s month-to-month lease on or occupancy of the Premises,
Mr. Francis and Perfect Science agree to deliver to the Trustee or his designated representative
the Vehicles and all keys to the Vehicles.”
By instead having language limiting the provision’s application to instances where a relief
from stay was sought, the intent was obviously that it not apply to other situations, such as the
present motion for surrender.
B. Stipulation Does Not Create Right of Occupancy Separate from Sublease
Again, in an attempt to mischaracterize the clear language of the Stipulation to suit his
needs, the Chapter 11 Trustee claims that he is not now occupying the Premises pursuant to the
pre-petition oral sublease, but rather the Stipulation creates an independent right to occupy the
Premises.
This is simply not true.
If the Stipulation indeed created the independent right to occupy the Premises that the
Trustee asserts, why would Paragraph 10.d of the Stipulation put restrictions on PSL’s ability to
seek a motion for relief “to terminate the Trustee’s month-to-month lease on or occupancy of the
premises.”
If the Stipulation were intended to create a right of occupancy independent from the oral
month to month lease, then the Trustee and PSL wouldn’t need to concern themselves with the
termination of the month to- month pre-petition lease in Paragraph 10.d.
The fact is that the Chapter 11 Trustee’s occupancy is directly dependent upon the pre-
petition month to month lease and the Stipulation contains no provisions giving the Chapter 11
Trustee a right to occupancy of the Premises independent of that lease.
III. PURPORTED PAST ACTIONS BY JOSEPH FRANCIS AND ABBEY WILSON
ARE IRRELEVANT
In his Opposition, the Chapter 11 Trustee, as he is known to do, tries to obfuscate the
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KOLODZI LAW FIRM
5981 Topanga Canyon Boulevard
Woodland Hills, California 91367
relevant facts by slinging a lot of mud. In his Opposition, the Chapter 11 Trustee describes
supposed violations by Joseph Francis and Abbey Wilson of a TRO, and tries to fault PSL for not
mentioning these in its Motion for Surrender.
Such supposed violations were not mentioned by PSL in its Motion because they are
IRRELEVANT to the Motion. Any such supposed violations of the TRO were resolved by the
Stipulation. In addition, such violations do not have any effect upon the right of PSL to the
surrender of the Premises now pursuant to Section 365(d)(4) of the Bankruptcy Code.
Similarly, it is irrelevant to the present Motion that PSL may have first considered
bringing a motion for relief from stay under Section 362 of the Bankruptcy Code and then opted
to bring the present motion for surrender under Section 365(d)(4). The only pertinent fact is that
PSL did not bring a motion for relief under Section 362 and therefore the requirements of
Paragraph 10.d. of the Stipulation and Paragraph 13 of the Order that the vehicles be surrendered
prior to the bringing of a motion for relief are inapplicable.
IV. CHOICE BETWEEN REWRITING THE STIPULATION OR
ENFORCING THE BANKRUPTCY CODE
It is no secret that this Court has a strong dislike of Joseph Francis, and by extension,
Abbey Wilson and PSL. This Court, at times, has also seemed to bend over backwards for the
Chapter 11 Trustee. However, the Chapter 11 Trustee is now asking this Court to ignore the
Bankruptcy Code (Section 365(d)(4) in particular), and to rewrite the Stipulation, and to deny
PSL the remedy to which it is clearly entitled under Section 365(d)(4). This Court must refuse to
go that far.
V. CONCLUSION
Based on the foregoing, PSL asks that the Court issue an Order directing Debtor to
IMMEDIATELY SURRENDER the Nonresidential Property and to permit PSL to use self-help
to retake possession of the Nonresidential Property without further Court order if the
Nonresidential property is not immediately surrendered. The Chapter 11 Trustee has interfered
with the business of PSL long enough and should be given no additional time to vacate the
Premises.
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KOLODZI LAW FIRM
5981 Topanga Canyon Boulevard
Woodland Hills, California 91367
DATED: March 12, 2014 Respectfully submitted,
KOLODZI LAW FIRM
By: /s/ Michael D. Kolodzi
MICHAEL D. KOLODZI, ESQ.
Attorney for PERFECT SCIENCE LABS,
LLC
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