Subtenants From Hell

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


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).

Case 2:13-bk-15130-SK Doc 523 Filed 03/12/14 Entered 03/12/14 15:56:48 Desc Main Document Page 1 of 9

mailto:[email protected]

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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.


-2- REPLY

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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


-3- REPLY

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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


-4- REPLY

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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.


-5- REPLY

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KOLODZI LAW FIRM



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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Subtenants From Hell