Opinion
Case No. 01-72167-DHA
November 26, 2002
James T. Lloyd, Jr., Esquire, Virginia State Bar No. 24004, TRAPANI, BERNARD LLOYD, Norfolk, VA, for Trak Auto Corporation.
This matter came before the Court on the Motion of Trak Auto Corporation, the debtor in possession in this bankruptcy case (the "Debtor"), to Assume and Assign Certain Non-Residential Real Property Leases to Advance Stores Company, Incorporated, t/a Advance Auto Parts ("Advance Auto") (the "Advance Assignment Motion"), and Objection filed by the Southtown Plaza, LLC, landlord of 2950 So. 108th Street, West Allis, WI based on inadequate funds to cure defaults; and subsequent Motion for Payment of Administrative Expense ("Perry Motion") filed by Perry Drug Stores, Inc., ("Perry") Landlord of the 1331 West Burnham Avenue, Milwaukee, WI, granted by this Court and paid by the Debtor. The parties desire an amended Order based on the payment of the cure obligations. Therefore, the Court states the following:
1. The Court has jurisdiction over this matter pursuant to 28 U.S.C. § 157 and 1334. Venue is proper in this Court pursuant to 28 U.S.C. § 1409.
2. Notice of the Advance Assignment Motion was provided to the lessors under the leases affected by this Advance Assignment Motion and to those parties who have noted an appearance in this case. This notice was adequate and appropriate under the circumstances.
3. No trustee has been appointed in this case, and an Official Committee of Unsecured Creditors has been appointed by the Office of the United States Trustee.
4. On November 9, 2001, the Court entered an Order authorizing the Debtor to employ a Joint Venture composed of Hilco Merchant Resources, L.L.C., Hilco Real Estate, L.L.C., Gordon Brothers Retail Partners, L.LC., and DiM Asset Management (collectively, "Hilco") as an asset disposition agent for the Debtor's Chicago market locations and further authorized Hilco to market leases for the Debtor and to conduct store closing and other sales (the "Hilco Order").
5. On December 13, 2001, the Debtor and Advance Auto entered into an Assumption and Assignment Agreement, which was later amended by a letter agreement, dated January 8, 2002 (collectively, the "Agreement"). A copy of the Agreement is attached hereto as Exhibit A and incorporated herein by reference. The Agreement provides for the assumption and assignment of two (2) leases in the Debtor's Chicago market.
6. The Agreement complies with all applicable provisions of 11 U.S.C. § 365 concerning the assumption and assignment of non-residential real property leases. The Agreement provides for the cure or adequate assurance for prompt cure of any default and adequate assurance for future performance under the leases to be assumed and assigned. The landlords for both locations have received the necessary cure amounts for the assumption and assignment and Advance Auto is able to perform the continuing obligations under the leases and to provide adequate assurance of future performance to the affected landlords.
7. The Debtor's decisions to assume and assign the leases in question to Advance Auto are proper exercises of the Debtor's business judgment. Advance Auto is purchasing this property in good faith.
WHEREFORE, finding it reasonable and necessary to do so, it is hereby
ORDERED, ADJUDGED, AND DECREED that the Agreement is approved in its centirety. It is further
ORDERED, ADJUDGED, AND DECREED that the terms contained within the Hilco Order shall apply with equal force and effect to this Order. It is further
ORDERED, ADJUDGED, AND DECREED that the Debtor is authorized to assume, assign and sell the leases referred to in the Agreement to Advance Auto under the conditions and terms set forth in the Agreement. It is fl.Zrther
ORDERED, ADJUDGED, AND DECREED that Advance Auto is purchasing the property referred to in the Agreement in good faith and is entitled to the protections provided in 11 U.S.C. § 363 (m). It is further
ORDERED, ADJUDGED, AND DECREED that this Order shall be effective immediately and that the 10-day stay of Rule 6004(g) of the Federal Rules of Bankruptcy Procedure shall not apply to this Order.