Park Avenue Associates, LLC v. Park Avenue Garage, LLC

SUMMARY ORDER 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 /.), which affirmed two orders, dated June 1, 2009 and June 18, 2009, of the Bankruptcy Court for the Southern District of New York (Drain, /.). 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 nonresidential 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. 2 The bankruptcy court did not err in authorizing Debtor to assume the lease pursuant to Section 365(a) of the Bank *557 ruptcy Code. 11 U.S.C. § 365(a). 3 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) “Debt- or’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. Footnotes [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 Sanshoe Worldwide Corp., 139 B.R. 585, 590 (S.D.N.Y.1992).