Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 1 of 28 Desc Main UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF NEW YORK In Re: Case No. 15-12242 TO-DO DEVELOPMENT LLC, Chapter 11 Debtor. MOTION OF TROY LOCAL DEVELOPMENT CORPORATION FOR ENTRY OF AN ORDER PURSUANT TO SECTIONS 362(d)(1) and (d)(4) OF THE BANKRUPTCY CODE GRANTING RELIEF FROM THE AUTOMATIC STAY TO PROCEED WITH FORECLOSURE ACTION AND CONFIRMING THE AUTOMATIC STAY DOES NOT STAY EVICTION PROCEEDING, AND IN THE ALTERNATIVE GRANTING RELIEF TO PROCEED WITH EVICTION PROCEEDING Troy Local Development Corporation (“the TLDC” or “Secured Lender” or “Movant”) by and through its counsel, Harris Beach PLLC, as a secured creditor, hereby files this Motion for Relief from the Automatic Stay pursuant to 11 U.S.C. §362(d)(1) and (4) and Federal Rule of Bankruptcy Procedure 4001 (the “Motion”), to: (i) permit the prosecution of the foreclosure proceeding commenced by the TLDC in the Supreme Court of the State of New York, County of Rensselaer (the “Foreclosure Action”) against To-Do Development, LLC (the “Debtor” or ToDo”), wherein the TLDC obtained orders prior to the petition date, granting the TLDC, inter alia, authority to collect all rents and to take possession of real property located at 41-43 Third Street, Troy, New York (the “Real Property”) and evict the tenants of the Real Property, (ii) grant the TLDC in rem relief by directing that any subsequent filing shall not be provided with the protections of section 362(a) as it relates to the Real Property, and (iii) confirm the automatic stay does not stay the eviction proceeding currently pending in the Troy City Court (the “Eviction Proceeding”). The Debtor is a single-asset real estate debtor who is unable to propose 1 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 2 of 28 Desc Main a confirmable plan and obtained the loans from the TLDC based on misrepresentations. Accordingly, the TLDC submits that it is entitled to relief from the automatic stay and respectfully states as follows: FACTUAL BACKGROUND 1. On or about November 5, 2015 (the “Petition Date”), the Debtor filed its second voluntary Chapter 11 Petition under with the United States Bankruptcy Court for the Northern District of New York.1 The Debtor is presently operating as a Debtor-in-Possession in accordance with §1107 of the Bankruptcy Code. No trustee, examiner or committee of unsecured creditors has been appointed. 2. The Debtor asserts ownership in the Real Property that it purportedly purchased to redevelop the building (the “Project”). While the Petition, Schedules and Statement of Financial Affairs do not reflect any income source or identify any unexpired leases or contracts, upon information and belief, the Debtor leases a certain area of the Real Property to O’Brien’s Public House Inc. in exchange for a monthly rental payment of $2,000.00 which is the only source of revenue for the Debtor. 3. O’Brien’s Public House Inc., a/k/a O’Briens Public House (“O’Briens” or the “Operator”) is a New York corporation that is wholly controlled and operated by the daughter of the sole member of the Debtor, Allisandra O’Brien. The TLDC Loans 4. Movant is the secured creditor of the Debtor. The Debtor applied to the TLDC for financing in the form of a $75,000.00 working capital loan, the proceeds of which were to be 1 A prior Chapter 11 bankruptcy case was filed nearly one year ago, on October 8, 2014 at Case No. 14-12210 (the “First Case”). The First Case was dismissed by Order entered April 23, 2015. 2 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 3 of 28 Desc Main used by the Debtor to undertake the Project (the “Application”). A copy of the Application is attached hereto as Exhibit “A”. 5. Through the Application, To-Do represented that it had paid $80,000.00 in cash for the Real Property. This is clear from the numerous representations as to the purchase price of the Real Property, including the Settlement Statement (HUD-1) attached to the Application that specifically states that the Contract sales price was $80,000.00. 6. The Debtor hid the fact that it executed and delivered a purchase money mortgage in favor of the Seller, SCC Development LLC in the amount of approximately $71,600.00 (the “Purchase Money Mortgage”). A copy of the Purchase Money Mortgage is attached hereto as Exhibit “B”. 7. Clearly, the Financial Estimates for 41-43 Third Street contained in the Application do not reference the Purchase Money Mortgage relating to the Real Property, nor the debt service required to satisfy same.2 8. By resolution dated October 11, 2013 the TLDC authorized the issuance of a $75,000.00 working capital loan with respect to the Project (“Loan 1”). 9. On October 11, 2013 Debtor, for the purpose of evidencing the above-described working capital loan from the TLDC, executed and delivered to the TLDC a Loan Agreement (“Loan Agreement 1”) and a Promissory Note (“Note 1”), pursuant to which Debtor promised to pay the TLDC the principal sum of $75,000.00, together with interest, by the payment of monthly installments up to October 1, 2015 at which time the complete indebtedness was due 2 In addition, the Purchase Money Mortgage contains a representation that the Debtor “has applied for and will be receiving from the City of Troy, grant monies in the sum of $21,600.00 on or about November 1, 2013.” These grant monies were to be paid over to SCC Development, LLC and if not paid, an additional $1,300.00 penalty per month for every month that the grant monies were not paid to SCC Development, LLC was required to be paid. 3 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 4 of 28 Desc Main and owing. Copies of Loan Agreement 1 and Note 1 are attached hereto respectively as Exhibits “C” and “D”. 10. As per the terms of Loan Agreement 1 and Note 1, Debtor agreed, commencing January 1, 2014, to make quarterly interest payments in accordance with a Schedule of Amortization (Schedule A) attached to the Loan Agreement 1 until the second anniversary date at which time a balloon payment was due in the amount of the full principal balance of Loan 1. 11. As security for the payment of the indebtedness of Loan 1 under Loan Agreement 1 and Note 1, Debtor executed, acknowledged and delivered to the TLDC a Mortgage and Security Agreement (“Mortgage 1”) dated October 11, 2013, whereby Debtor mortgaged to the TLDC the Real Property. A copy of Mortgage 1 is attached hereto as Exhibit “E”. 12. Mortgage 1 was duly recorded in the Office of the Rensselaer County Clerk on October 16, 2013 in liber 6967, page 159. 13. Subsequently, Debtor applied to the TLDC for additional financing in the form of a $25,000.00 working capital loan (“Loan 2”), the proceeds of which were to be used by Debtor exclusively to install a sprinkler system at the Real Property. 14. By resolution on December 13, 2013 the TLDC authorized the issuance of Loan 2 with respect to the Project, again upon assurances from Debtor that the only debts and encumbrances associated with the Real Property was at the time, Mortgage 1. 15. On December 20, 2013 Debtor, for the purpose of evidencing the above-described Loan 2 from the TLDC, executed another loan agreement (“Loan Agreement 2”) and another Promissory Note (“Note 2”) pursuant to which Debtor promised to pay to the TLDC quarterly principal payments and monthly interest payments through January 1, 2015, at which time the complete indebtedness associated with Loan 2 was due and owing. Copies of Loan Agreement 2 4 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 5 of 28 Desc Main and Note 2 are attached hereto respectively as Exhibits “F” and “G”. 16. As per the terms of Loan Agreement 2 and Note 2, Debtor agreed to make monthly interest and quarterly principal payments in accordance with a Schedule of Amortization attached to Note 2. 17. Loan Agreement 1 and Loan Agreement 2 are hereinafter collectively referred to as the “Loan Agreements”. 18. Note 1 and Note 2 are hereinafter collectively referred to as the “Notes”. 19. In addition to the Loan Agreements and Notes, Debtor executed and acknowledged and delivered to the TLDC an additional Mortgage and Security Agreement (“Mortgage 2”), dated December 20, 2013 associated with Loan 2 and whereby Debtor mortgaged to the TLDC the Mortgaged Premises as a subordinate mortgage to Mortgage 1, with specific cross-default provisions. A copy of Mortgage 2 is attached hereto as Exhibit “H”. 20. Mortgage 2 was duly recorded in the Office of the Rensselaer County Clerk on December 31, 2013 in liber 7039, page 74. 21. Loan 1 and Loan 2 are hereinafter collectively referred to as the “Loans”. 22. Concurrently with the execution of the above-described Loan Agreements and Notes, Debtor executed Assignments of Leases and Rents with each of the Loans whereby Debtor assigned to the TLDC all the right, title and interest in all leases and contracts for the use and possession of the Mortgaged Premises (collectively, the “Assignment of Rents”). A copy of the unconditional Assignment of Rents dated October 11, 2013 is attached hereto as Exhibit “I”; and a copy of the unconditional Assignment of Rents dated December 20, 2013 is attached hereto as Exhibit “J”. 23. Upon information and belief, the Debtor breached the terms and conditions of 5 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 6 of 28 Desc Main Note 2 and Mortgage 2 by failing to use the proceeds from the $25,000.00 working capital loan to install a sprinkler system at the Mortgaged Premises as specifically required within Loan Agreement 2. PRIOR HISTORY 24. In addition to the failure to use the proceeds from Loan 2 in accordance with the terms of Loan Agreement 2, the Debtor defaulted on the payment obligations under the Loans by failing to make certain of the required payments as required under Note 2 and Loan Agreement 2. The Foreclosure Action 25. On July 24, 2014, the TLDC commenced a foreclosure action in the Supreme Court of the State of New York, Rensselaer County entitled Troy Local Development Corporation v. To-Do Development LLC, et al, at Index No. 247426 (the “Foreclosure Action”). A copy of the Summons and Complaint (without exhibits) filed in the Foreclosure Action is attached hereto as Exhibit “K”. 26. The TLDC moved by Order to Show Cause to formally enforce its rights under the Assignment of Rents to collect the rental payments from all tenants at the Real Property. By Order entered October 6, 2014, the TLDC was authorized to collect all rental payments, assume all rights of the Debtor in all leases of the Real Property, and awarded interest, fees and costs in connection with the foreclosure (the “Rent Order”). A copy of the Rent Order is attached hereto as Exhibit “L”. The First Case 27. The First Case was filed with this Court on October 8, 2014 at Case No. 14- 12210. In the First Case, Movant sought relief from the stay to pursue the Foreclosure Action. 6 272645 2676122v1 Case 15-12242-1-rel 28. Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 7 of 28 Desc Main A Consent Order was entered in connection with the Motion for Relief whereby the TLDC agreed to adjourn a determination on the motion on several occasions provided that the Debtor take certain steps to comply with chapter 11 requirements relating to the case, including but not limited to, seeking authority to use cash collateral and filing monthly operating reports. 29. In the meantime, the Debtor filed a Disclosure Statement and Plan of Reorganization; a confirmation hearing was never held. 30. In order to determine the feasibility of the proposed Plan of Reorganization, Movant sought and was granted authority to conduct a Rule 2004 examination of Debtor’s principal, Terry O’Brien (“Ms. O’Brien”). 31. Based on Ms. O’Brien’s testimony and other actions of the Debtor, Movant filed a motion to dismiss for cause (the “Motion to Dismiss”) on the grounds that: a. The case was filed in bad faith b. The Debtor failed to file monthly operating reports and to comply with this Court’s Order outlining Basic Chapter 22 Guidelines. c. The Debtor failed to answer questions at a court-ordered 2004 Examination. 32. The Motion to Dismiss was granted by Order entered April 23, 2015. Continuation of the Foreclosure Action and Commencement of the Eviction Proceeding 33. Once the First Case was dismissed, Movant continued with the Foreclosure Action and also commenced an eviction proceeding in the City Court of Troy to evict the tenants of the Real Property. That Eviction Proceeding was assigned Index No. LT 003540-15/TR (the “Eviction Proceeding”). 7 272645 2676122v1 Case 15-12242-1-rel 34. Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 8 of 28 Desc Main Upon information and belief, O’Brien’s Public House and Ms. O’Brien are tenants subject to the Eviction Proceeding. 35. Movant obtained an Order and Judgment in the Eviction Proceeding for $12,145.00 against O’Brien’s Public House for unpaid rent, and an Order directing the tenants to vacate the Real Property (the “Eviction Order”). A copy of the Eviction Order is attached hereto as Exhibit “M”. 36. Upon information and belief, a Warrant of Eviction was served on a principal of O’Brien’s Public House and on Ms. O’Brien on November 4, 2015 (the “Warrant of Eviction”). A copy of the Warrant of Eviction is attached hereto as Exhibit “N”. 37. In addition to the Eviction Proceeding, Movant continued with the Foreclosure Action by filing a Motion for Summary Judgment. The Motion for Summary Judgment was granted by Order entered June 25, 2015, which appointed a referee, directed the referee to compute the amounts due, and authorized an award to Movant. A copy of the Summary Judgment Order is attached hereto as Exhibit “O”. 38. Movants have received the Referee’s Oath & Report as to Amounts Due and were in the process of obtaining a Judgment of Foreclosure in order to conduct the Foreclosure Sale when the instant case was filed. A copy of the Referee’s Oath & Report of Amounts Due (the “Referee’s Oath”) is attached hereto as Exhibit “P”. 39. This case was commenced on November 5, 2015 which has the effect of staying the Foreclosure Action. It is Movant’s position that the tenants are not entitled to the benefit of the Automatic Stay as neither O’Brien’s Public House nor Ms. O’Brien are debtors in this case. Notwithstanding this, Movant is seeking a comfort order confirming that the Stay is not implicated, and that the Eviction Proceeding can continue. 8 272645 2676122v1 Case 15-12242-1-rel 40. Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 9 of 28 Desc Main Further, for the reasons set forth herein, Movant is seeking an order terminating the Stay so that it can proceed with the Foreclosure Action. Pre-Petition Indebtedness 41. As of September 18, 2015, the Debtor was obligated and indebted to the TLDC in an amount in excess of $125,277.08 (the “Pre-Petition Indebtedness”). See Ex. P. I. LEGAL PREDICATES 42. This Court has jurisdiction over this Motion pursuant to 28 U.S.C. §§157 and 1334. This matter is a core proceeding under 28 U.S.C. §§1408 and 1409. The legal predicate for the relief sought herein is 11 U.S.C. §362(d). II. LEGAL ARGUMENT 43. Relief from the automatic stay is warranted under §362(d)(1) for cause. Section 362(d)(1) of the Bankruptcy Code requires a bankruptcy court to grant relief from the automatic stay to a creditor “for cause, including lack of adequate protection.” 11 U.S.C. § 362(d)(1). The concept of adequate protection requires a debtor to propose some form of relief, typically in the form of periodic cash payments that will preserve the secured creditor’s interest in the collateral, pending the outcome of the bankruptcy proceedings. In re Monroe Park, 18 B.R. 934 (D.C. Del. 1982). 44. In the case at bar, cause exists because the Debtor has insufficient income to make reasonable adequate protection payments to the TLDC. Moreover, the Debtor is unable to propose a confirmable plan of reorganization due to a lack of income. Under section 362(d), the TLDC is entitled to relief from the automatic stay. 45. Additionally, the TLDC should be granted relief from the automatic stay for “cause” because this case is essentially a two-party dispute between the TLDC and the Debtor. 9 272645 2676122v1 Case 15-12242-1-rel 46. Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 10 of 28 Desc Main The Debtor is a single asset real estate entity with, upon information and belief, very few unsecured creditors. 47. The Debtor commenced the First Case after the Foreclosure Action was commenced and the Rent Order was entered. This case was filed after the Summary Judgment Order was entered in the Foreclosure Action and the Eviction Order authorizing the eviction of the tenants was entered in the Eviction Proceeding. The Eviction Order clearly has the effect of eliminating the Debtor’s income, which is comprised solely of Rents, and it is TLDC’s position that the Eviction Proceeding is not stayed as the subjects of the Warrant of Eviction are nondebtors and are not entitled to the protections associated with section 362 of the Bankruptcy Code. 48. Indeed Item 1 of the Statement of Financial Affairs filed with the Petition and Schedules reflects that the Debtor has had no income in the past two years. 49. The Debtor also has unclean hands in that the Loans were obtained based on misrepresentations by the Debtor principal to the TLDC. In particular, as noted above, in connection with obtaining Loan 1 and Loan 2, the Debtor’s principal stated to the TLDC that the Debtor paid for the Real Property in full with cash; instead, the Debtor paid $80,000 in cash but also granted SCC Development LLC the Purchase Money Mortgage. See Exhibit “B”. The granting of the Purchase Money Mortgage was not disclosed to the TLDC in the Debtor’s Application to the TLDC, and as such was a material misrepresentation and misleading inducement for the TLDC’s discretion to lend. 50. With respect to Loan 2, the funds were to be used to pay the contractor that installed a new sprinkler system in the Real Estate. Instead of paying the contractor, upon information and belief, the funds were used for other expenses; a debt of $21,000.00 is reflected 10 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 11 of 28 Desc Main as being due and owing to Matthews Sprinklers in the Debtor’s Petition. 51. Notably, Schedule D of the Debtor’s Petition and Schedules reflects that a contractor filed a mechanic’s lien on the Real Property for the improvements to the property in the amount of $15,500.00 thereby further encumbering the Real Property, and Schedule F reflects an unsecured debt owing to Matthew’s Sprinklers in the amount of $21,000. Debtor’s failure to bond over or satisfy any such lien is a material event of Default under Loan Agreement 1 and Loan Agreement 2. 52. Finally, the Debtor’s schedules state that the Real Property has a value of $550,000. It is submitted that this value is speculative at best as the TLDC has an appraisal dated July 14, 2014 that values the Real Property at $250,000 (the “Appraisal”). A copy of which is attached hereto as Exhibit “Q”. 53. Under these circumstances, cause exists so that the TLDC should be granted relief from stay to continue the Foreclosure Proceeding. a. The Debtor is Unable to Propose a Confirmable Plan 54. The Debtor is unable to propose a plan of reorganization. The Debtor’s only asset is the Real Property that is only partially usable, the tenants have been evicted (or are the subject of the Warrant of Eviction) and the rent, if any, belongs to the TLDC. The Debtor has no other source of income or capital to fund a plan. Schedule B of the Debtor’s Petition lists $1,000 in a bank account as the Debtor’s only non-real property asset. It is unclear how any further renovations on the Real Property that will increase the value will be funded. Further, upon information and belief, the principal of the Debtor will not be able to provide new value to retain her equity interest in the Debtor. 11 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 12 of 28 Desc Main b. The TLDC has an Absolute Right to the Rents and Thus the Rents May Not Be Used by the Debtor to Fund a Plan of Reorganization 55. The Debtor has not provided an explanation for how it anticipates paying for the ongoing expenses of the bankruptcy case. To the extent the Debtor intends to rely on the rental income from the Real Property to maintain the operations and presumably fund a plan of reorganization, it is submitted that this is not available to the Debtor. The Tenants have been or will be evicted so that rents are no longer available. Regardless of the status of the eviction, to the extent the Debtor attempts to rely on any Rents it is clear that the Rents are the property of the TLDC and cannot be used for these purposes. 56. By virtue of the Assignment of Leases and Rents, the Debtor absolutely, irrevocably and unconditionally transferred, to the TLDC all of the right, title and interest to the Rents. See Exhibits “I” and “J”, at p. 1. 57. Indeed, the Assignment of Leases and Rents specifically provides: For value received, the receipt of which is hereby acknowledged, the Company hereby absolutely, irrevocably and unconditionally transfers, assigns, sets over and grants to the Corporation all the right, title and interest in, to and under all leases and contracts for the use and occupancy of the [Real Property] now in existence or hereafter arising, together with all the rents, royalties, issues, profits, income, security deposits, and other benefits at any time occurring with respect to the leases (collectively, the “Rents”) and all extensions, renewals, modifications or replacements of the leases, and together with any and all guarantees of the obligation of the tenants under the leases (singularly, a “Tenant”, and collectively the “Tenants”), whether now existing or as signed after the date of this Assignment, and all extensions and renewals of the guarantees. The leases, together with any and all guarantees, modifications, extensions, and renewals of the leases, are singularly a “Lease,” or collectively, the “Leases” in this Assignment. Company also assign and absolutely transfer [sic] to Corporation all right, title and interest of Company in and to and under all contracts pertaining to the operation of the [Real Property]. Id. (emphasis added). 12 272645 2676122v1 Case 15-12242-1-rel 58. Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 13 of 28 Desc Main The Assignment of Leases and Rent further specifically provides: This Assignment is separate and apart from the Note. This Assignment is a present, absolute, and unconditional assignment to Corporation of the Rents, the Leases and the Contracts. This Assignment presently gives Corporation the right to collect the Rents and to apply the Rents in partial payments of the Debt, as well as all other sums payable, as provided in the Note or any other security instruments or loan documents given as security for the Debt and to utilize the Contracts in the operation of the Property. This Assignment is intended by Company to create, and will be construed to create, an absolute assignment to Corporation. This Assignment is not intended by Company to be an assignment as security for the performance of the Note, Loan Agreement, and Mortgage and Security Agreement or any other debt owed by Company to Corporation. This Assignment is intended to create, and will be construed to create a present transfer of an interest or interest in real estate and is entitled to be recorded. Id., at pp. 1-2 (emphasis added). 59. The Assignment of Leases and Rents granted the Debtor a revocable license to collect the rents as follows: Corporation grants to Company a revocable license to collect, as agent of Corporation and subject to this Assignment, the Rents, as the Rents become due, and to enforce the Lease, so long as no Event of Default by Company exists in payment or performance of the Note, Loan Agreement, Mortgage and Security Agreement or this Assignment. The revocable license will terminate upon written notice from Corporation to Company, if an Event of Default occurs as provided in the Note, Loan Agreement, the Mortgage and Security Agreement or in this Assignment. Unless and until the license is revoked, Company will apply the rents (other than nonforfeited security deposits) to the payment of taxes, assessments, insurance premiums, utilities charges, and operation, repair, replacement, and maintenance charges with respect to the [Real Property] which are due and payable at the time of collection of the Rents, before using the rents for any other purpose. Id., at p. 2. 60. It is submitted that where, as here, the Assignment of Rents is clear and unambiguous, the terms must be enforced according to their plain meaning. 13 272645 2676122v1 Case 15-12242-1-rel 61. Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 14 of 28 Desc Main It has been held: [w]here the terms of a contract are clear and unambiguous, ‘and reasonable people could not disagree as to the meaning of the text, the contract’s interpretation is a question of law to be answered by the court.’ Sage Realty Corp. v. Jugobanka, D.D., 1998 WL 702272, *4 (S.D.N.Y. 1998); see RJE Corp. v. Northville Industries Corp., 329 F.3d 310, 314 (2d Cir. 2003). In such cases, the contract is to be interpreted with reference only to the four corners of the document and evidence as what was ‘really intended but unstated or misstated is generally inadmissible.’ Emcee Personnel v. Morgan Lewis & Bockius, LLP, 269 A.D.2d 353, 702 N.Y.S.2d 633, 634 (2d Dep’t 2000), quoting W.W.W. Assocs., Inc. v. Giancontieri, 77 N.Y.2d 157, 565 N.Y.S.2d 440, 443, 566 N.E.2d 639 (1990); see RJE Corp., 329 F.3d at 314. Clear and complete writings should generally be enforced according to the terms contained therein. Burns v. Bankruptcy Estate of Swyers, 2003 WL 23350110 *2 (W.D.N.Y. December 9, 2003); see Site Remediation, 92 F. Supp.2d at 135-36. O’Brien v. Argo Partners, Inc., 736 F. Supp.2d 528, 534 (E.D.N.Y. 2010). 62. Here, the Assignment of Rents absolutely and unconditionally assigned, inter alia, title to the Rents to the TLDC; there is no ambiguity to the terms of the Assignment of Rents so that they must be enforced. 63. A recent case decided in the Southern District of New York with facts nearly identical to those here, expressly held that the assignment of rents executed in favor of the lender was effective under New York law so that the rents were not property of the bankruptcy estate. In re Soho 25 Retail, LLC, 2011 WL 1333084, at *7-*8 (Bankr. S.D.N.Y. March 31, 2011). 64. In Soho 25, the Debtor executed a promissory note, mortgage and assignment of leases and rents, each were separate documents. Id. at *1. The Soho 25 assignment of rents contained a provision similar to the provision in the instant Assignment, i.e. that the debtor had a revocable license to collect the rent, that the assignment was absolute and unconditional, and that it was not an assignment for additional security. Id. at *2. 65. The Soho 25 court found it particularly relevant that the assignment provided 14 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 15 of 28 Desc Main lender with the “full power, in the name and stead of [the Debtor] to demand, collect, receive and give complete acquittance for any and all of the Rents now due or that may hereafter become due . . .” Id. It was also found to be notable that the “Lender’s rights regarding the rents are not contingent upon the Lender taking control of the property or even initiating action to take such control. . . .” Id. 66. The Assignment of Rents executed by the Debtor in the instant case contains both a directive that the TLDC is granted authority to collect the rents, and that such right is not contingent upon any action by the TLDC other than by the TLDC giving the Debtor and the Tenants notice that the TLDC intends to enforce its rights in the Rents. See Exhibits “I” and “J”, at p. 2. 67. As in Soho 25, the Debtor defaulted by failing to make the payments as provided in the Notes and notice of such default was properly given to the Debtor and to O’Brien’s Public House that included a termination of the license (the “Default Notices”). On May 12, 2014, the TLDC sent a Notice of Default to both the Debtor and O’Brien’s Public House advising of the default in payment of Loan 2 which constitutes a default of Loan 1. Thereafter, on July 21, 2014, the TLDC affirmatively terminated the license; copies of the Default Notices are attached hereto as Exhibits “R” and “S” respectively. Also on July 21, 2014, the TLDC notified O’Brien’s Public House that is had the right to collect rental payments (the “Tenant Notice”). Specifically, by the Tenant Notice, the TLDC directed that “[u]pon receipt of this Notice you are to submit all monthly rental payments as provided in the Lease Agreement directly to the TLDC.” A copy of the Tenant Notice is attached hereto as Exhibit “T”. 68. In Soho 25, the lender commenced a foreclosure action that sought the appointment of a rent receiver. Id. at *3. The Debtor defaulted and a referee was appointed. Id. 15 272645 2676122v1 Case 15-12242-1-rel 69. Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 16 of 28 Desc Main As in Soho 25, the Debtor failed to cure any defaults so that the TLDC commenced the Foreclosure Action. Additionally, the TLDC obtained the Rent Order that expressly authorizes the TLDC to collect all rental payments, assume all rights of the Debtor in all leases of the Real Property. See Exhibit “L”. 70. Soho 25 recognized that New York law controlled the issue of what constitutes property of the bankruptcy estate pursuant to 11 U.S.C. §541 and found it relevant that the real property was located in New York and that the loan documents provided for New York law to govern and should be used to construe the documents. Soho 25, 2011 WL 13333084, at * 5. Likewise, the Real Property here is located in New York and the Loan Agreements specifically provide for New York law to govern all rights, duties and obligations of the parties under the agreement. See Exhibits C and F, at ¶ 13.4 respectively. 71. The Soho 25 court conducted a thorough and complete analysis of the relevant case law concerning the enforceability of an assignment of rents. See Soho 25, 2011 WL 1333084, at * 6. Indeed, the court recognized that “the majority of New York state cases are of the view that an absolute assignment is not permitted, regardless of the language in the agreement.” Id. (citing Lt Propco, LLC v. Carousel Ctr. Co., L.P., 68 A.D.3d 1695, 1696 (N.Y. App. Div. 4th Dept. 2009). The court determined however that it did ‘not need to resolve this murky legal question because the Lender here took sufficient affirmative steps to make the Assignment effective under New York law.” Id. at * 7. 72. Specifically, the affirmative steps necessary to assert an interest in the rents was found to include “requesting the appointment of a receiver to collect the rents, demanding or taking possession, commencing foreclosure proceedings, or seeking an order for the sequestration of rents.” Id. (citing United States v. DiGiulio, No. 95–CV–219S, 1999 U.S. Dist. 16 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 17 of 28 Desc Main LEXIS 16606, at *3–4 (W.D.N.Y. 1999); 641 Ave. of the Ams. Ltd. Partnership v. 641 Assocs., 189 B.R. 583, 591 (S.D.N.Y. 1995); In re Carmania Corp. N.V., 154 B.R. 160, 165 (S.D.N.Y. 1993); In re Cerrico Realty Corp., 127 B.R. 319, 323 (Bankr. E.D.N.Y. 1991); In re Flower City Nursing Home, Inc., 38 B.R. 642, 645 (Bankr. W.D.N.Y. 1984); In re Pine Lake Village Apartment Co., 17 B.R. 829, 833 (Bankr. S.D.N.Y. 1982)). The court also noted that “the case law lists these examples of affirmative steps in the disjunctive. The underlying idea is to reward ‘parties who are diligent in protecting their interests by requiring affirmative action by the secured party before an assignment of rents is enforceable.’” Id. (citing Carmania, 154 B.R. at 165; Vecchiarelli v. Garsal Realty, Inc., 443 N.Y.S.2d 622, 623 (1980)). 73. By taking the following steps, the court determined that the lender had as a matter of law, the ability to enforce its rights to the rents: a. Commencing a foreclosure proceeding; b. Seeking the appointment of a receiver; c. Obtaining the appointment of a rent receiver; and d. Sending a formal written demand that the tenant pay rent to the Lender. Id. at * 8. 74. The court also found it compelling that the lender “took a significant affirmative step to enforce its interests after the Debtor’s bankruptcy filing by seeking relief from the automatic stay that had been imposed by the Bankruptcy Code.” Id. (citing 11 U.S.C. §362; 641 Assocs., 189 B.R. 591; Flower City Nursing, 38 B.R. at 645 (“[W]here a bankruptcy petition is filed staying such affirmative action by a mortgagee to perfect its interest in rent proceeds, a mortgagee’s petition to lift the stay to obtain appointment of a foreclosure receiver will perfect the interest. . . .”); Pine Lake Village, 17 B.R. at 834-35 (“Not only did he commence a state 17 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 18 of 28 Desc Main court foreclosure action and an action to reinstate the managing agent in order to collect rents, but he also sought relief from the automatic stay in order to continue the state court foreclosure action.”)). 75. Here, the TLDC has taken the necessary “affirmative steps” to reach the inescapable conclusion that the Assignment of Rents is complete and unconditional, so that the Rents, even if the Eviction Proceeding is stayed, are not available for the Debtor’s use. Indeed, the TLDC commenced the Foreclosure Proceeding, and while it did not seek the appointment of a receiver or rent receiver, it obtained the Rent Order and Eviction Order prior to the Petition Date so that the Debtor is divested of the use of the Rents. The TLDC also provided the separate Default Notices to both the Debtor and O’Brien’s Public House. Finally, the TLDC is taking the other affirmative step of seeking relief from the automatic stay imposed upon the filing of the instant bankruptcy case to continue with both the Foreclosure Action and Eviction Proceeding. 76. The analysis conducted by the Soho 25 court concluded that the rents were not property of the estate “because the Debtor had at most, a revocable license in the rents at issue – a license that was revoked by the Lender prior to the Petition Date – and because the Mortgage and the Note remain[ed] unsatisfied.” Id. at * 9. 77. The same facts exist here, the license was revoked by the TLDC prior to the Petition Date, and in fact, the TLDC obtained the Rent Order, the Eviction Order, and arranged for service of the Warrant of Eviction that made it clear that it had authority to collect the rents and take all necessary steps with respect to the Real Property based on the Assignment of Rents. 78. Given the clear similarity of facts, this Court has no alternative but to find that the Rents are not property of the Debtor’s bankruptcy estate. Accordingly, since the Rent is the only source of income, the Debtor will be unable to propose a confirmable plan, therefore, cause 18 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 19 of 28 Desc Main exists to grant the TLDC relief from the automatic stay. c. The TLDC is Entitled to Relief from the Stay for Cause as the Bankruptcy Case was filed in Bad Faith 79. The TLDC should be granted relief from the automatic stay “for cause” because this case is essentially a two-party dispute between the TLDC and the Debtor. The Debtor is a single-asset real estate debtor with very few unsecured creditors. The Debtor commenced the First Case shortly after the Rent Order was entered, and commenced this case shortly after the Summary Judgment Order and Eviction Order were entered, and immediately after the tenants were served with the Warrant of Eviction. Based on the relief granted in the Rent Order, the Summary Judgment Order and the Eviction Order, there can be no effective reorganization. Accordingly, the TLDC should be granted relief from the automatic stay to continue the Foreclosure Action and Eviction Proceeding. 80. Section 362(d)(1) of the Bankruptcy Code provides that the Court “shall grant relief from the [automatic] stay . . . for cause.” “Although not expressly stated in section 362(d)(1), it is well established that a debtor’s bad faith constitutes ‘cause’ for relief from the automatic stay under that section.” In re 68 West 127 Street, LLC, 285 B.R. 838, 843 (Bankr. S.D.N.Y. 2002). Once the movant makes an initial showing of “cause,” the burden shifts to the debtor “for all issues other than the debtor’s equity in property.” In re Balco Equities Ltd., Inc., 312 B.R. 734, 749 (Bankr. S.D.N.Y. 2004). 81. Whether a bankruptcy petition was filed in “bad faith” is analyzed under the eight-factor test provided for in In re C-TC 9th Avenue Partnership, 113 F.3d 1304, 1310 (2d Cir. 1997), which factors are set forth in the underlined text below. The following demonstrates that, under this test, the Debtor’s Petition meets the criteria for a “bad faith” filing. 19 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 20 of 28 Desc Main (1) The debtor has only one asset. Here, the Debtor is a single-asset real estate debtor. See Chapter 11 Voluntary Petition for Relief, Form B1 (Docket No. 1). (2) The debtor has few unsecured creditors whose claims are small in relation to those of the secured creditors. The Debtor’s schedules show no claims for creditors holding unsecured priority claims; general unsecured creditors holding claims are reported in an amount of approximately $39,284.00 (of which more than one-half is due and owing to one creditor). The TLDC’s secured claim is approximately $126,000.00 with other secured claims totaling approximately $83,000.00 according to the Debtor’s Schedules. Unsecured claims are therefore approximately 19 percent of the Secured Creditor’s claim. See Debtor’s Schedules (Summary) (Docket No. 1). (3) The debtor’s one asset is the subject of a foreclosure action as a result of arrearages or default on the debt. The Real Property, the Debtor’s sole asset, is the subject of the Foreclosure Action. The TLDC commenced the Foreclosure Action as a result of the Debtor’s failure to make the contractual payments on Loan 1 or Loan 2 since at least March and April 2014. See Plaintiff’s Affidavit of Merit & Amount Due attached to the Referee’s Oath & Report, at Ex. P. (4) The debtor’s financial condition is, in essence, a two party dispute between the debtor and secured creditor which can be resolved in the pending state foreclosure action. The largest creditor of the Debtor is the TLDC. While the appraisal attached hereto shows that there may be enough value in the Property to pay the TLDC’s claim in full and potentially satisfy the unsecured creditors, the Debtor has no ability to reorganize because the current condition of the Real Property, based on the contents of the Appraisal, suggests that additional rent is not forthcoming, so that continuation 20 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 21 of 28 Desc Main of the Foreclosure Action in state court is unavoidable. This is an “important factor to consider in determining whether a Chapter 11 case was initiated in good faith” because “Chapter 11 was never intended to be used as a fist in a two party bout.” In re HBA East, Inc., 87 B.R. 248, 260 (Bankr. E.D.N.Y. 1988). (5) The timing of the Debtor’s filing evidences an intention to delay or frustrate the legitimate efforts of the Debtor’s secured creditor to enforce its rights. The Foreclosure Action was commenced on July 24, 2014 with the Rent Order being entered on October 6, 2014. Two days after, the entry of the Rent Order, the Debtor filed the First Case. Thereafter, the First Case was dismissed and the TLDC pursued the Foreclosure Action and the Eviction Proceeding. The day following the effective date of the Warrant of Eviction (Ex. N), this case was filed by the Debtor. This timing demonstrates an intention and scheme to continuously delay the TLDC’s efforts to enforce its rights and ultimately to foreclose on the Real Property. (6-7) The Debtor has little or no cash flow. Due to the Eviction Proceeding, the debtor cannot meet current expenses including the payment of insurance, personal property and real estate taxes. These factors are ultimately concerned with whether the Debtor has sufficient cash flow to fund a plan of reorganization. “Reorganization presupposes the existence of monies to pay the expenses of operating a business and assets to generate the funds for implementation of a reorganization plan.” In re HBA East, Inc., 87 B.R. 248, 261 (Bankr. E.D.N.Y. 1988). Upon information and belief, the Debtor does not have sufficient cash flow to fund a plan of reorganization. Notably, the Debtor has not filed Schedules I and J to reflect any income or expense to be paid. The Debtor only recently filed a Rule 2015-2 21 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 22 of 28 Desc Main Affidavit which states that the “Estimated monthly gross income is $2,500 with expenses approximating that amount.” See Doc. No. 10, ¶ 4 (the “2015-2 Affidavit”). Through the 2015-2 Affidavit, it is clear that the income will be insufficient to fund a plan of reorganization. The monthly pre-petition payment on Loan 2 alone (if viewed as monthly instead of quarterly) is nearly $2,000.00. See Exhibit “G”, Schedule A. The Debtor has not filed its Schedule J detailing its monthly operating expenses but as acknowledged in the 2015-2 Affidavit, the Debtor’s expenses are at or more than $2,500.00 per month for payment of insurance, real property taxes and operating expenses. There is insufficient cash flow to pay operating expenses and service the debt, much less fund a plan by the Debtor that would provide for paying down the $126,000.00 in principal, interest and costs outstanding under the Loans. (8) The debtor has no employees. The Debtor stated that it has no employees. See Doc. No. 10, ¶ 3. 82. In short, each factor for the Court’s consideration supports a finding that the Debtor filed the Petition in “bad faith.” Accordingly, pursuant to § 362(d)(1) of the Bankruptcy Code, the TLDC is entitled to relief from the automatic stay. d. The Balance of Harms Weighs in Favor of Granting the TLDC Relief from the Automatic Stay Because the Debtor Will Not Be Able to Propose a Confirmable Plan of Reorganization. 83. Additionally, in deciding whether to grant relief from the automatic stay, the Second Circuit looks to the factors set forth in In re Sonnax Industries, Inc., 907 F.2d 1280, 1286 (2d Cir. 1990). Not all of the Sonnax factors apply here. The most critical factor here is “the impact of the stay on the parties and the balance of harms” since this factor goes directly to whether continuation of the stay is warranted and equitable under the circumstances. Indeed, this 22 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 23 of 28 Desc Main factor is often critical in deciding whether to grant relief from the automatic stay. See, e.g., In re Northwest Airlines Corp., 2006 WL 382142, *2 (Bankr. S.D.N.Y. 2006) (“The Sonnax factors most relevant to this motion [for relief from the automatic stay] are the tenth factor, the interests of judicial economy, and the twelfth factor, the impact of the stay on the parties and the balance of harms.”). 84. In weighing the balance of harms, the Court’s primary focus should be on the Debtor’s inability to propose a confirmable plan of reorganization. The Debtor will be unable to confirm a plan of reorganization because it has no unencumbered cash or assets, no rent or tenants and any Rents that may be received belong to the TLDC so that there are no funds to fund a plan. Finally, there is no indication that the member of the Debtor will contribute new money to the Debtor. 85. This is not a case where continuation of the automatic stay will provide the Debtor with a breathing spell from creditors that will enable the Debtor to reorganize. The Debtor’s largest creditor is the TLDC. The Debtor’s property is not nearly close to being renovated for additional tenants and the Debtor does not have cash to fund the renovations. As a result, without an ability to conduct further renovations, the Debtor is limited in its ability to increase the rental revenue of the Real Property and will not be able to fund a confirmable plan of reorganization. Continuation of the stay will thus serve only to delay the exercise of the TLDC’s rights without conferring any corresponding benefit on the Debtor to reorganize. 86. Further, the Debtor, has not formally sought authority to use cash collateral, which clearly cannot be granted as the Rent is not cash collateral but is instead, the TLDC’s cash 23 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 24 of 28 Desc Main that the Debtor does not have an interest in. 3 See 11 U.S.C. §363(a)(defining cash collateral as “cash . . . in which the estate and an entity other than the estate have an interest. . . .”). Under these circumstances, the balance of harms weighs in favor of permitting the TLDC to continue the Foreclosure Action and Eviction Proceeding. 87. In addition, in deciding whether to grant relief from the stay the Court is to consider “the interests of judicial economy and the expeditious and economical resolution of litigation” and “whether the parties are ready for trial in the other proceeding.” Sonnax Indus., 907 F.2d at 1286. Here, while there has not been a Judgment of Foreclosure in the Foreclosure Proceeding, the TLDC has confirmed its unconditional and absolute rights in the Rents, and has evicted, or at a minimum obtained the necessary order to evict the tenants so that there is no source of income to the Debtor; thus, no plan can be confirmed. Accordingly, the interests of judicial economy and efficiency weigh heavily in favor of permitting the TLDC to continue the Foreclosure Proceeding. 88. For the foregoing reasons, the TLDC is entitled to relief from the automatic stay “for cause” under § 362(d)(1). e. The TLDC Seeks In Rem Relief from the Automatic Stay Pursuant to §362(d)(4) 89. Section 362(d)(4) provides that the court may condition the imposition of a stay where there have been multiple filings where there is a scheme to delay hinder or defraud creditors. 3 Undersigned counsel contacted Attorney Croak, the attorney of record for the Debtor, but was advised that Attorney Croak filed this case as an accommodation to another attorney that was unavailable to file the case at that time. Undersigned contacted the other attorney’s office and was advised by the office staff that the other attorney is out of town for several weeks and the staff member did not believe the office was planning on being involved in this case. 24 272645 2676122v1 Case 15-12242-1-rel 90. Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 25 of 28 Desc Main Specifically, subsection (d)(4) provides: (d) On request of a party in interest and after notice and a hearing, the court shall grant relief from the stay provided under subsection (a) of this section, such as by terminating, annulling, modifying, or conditioning such stay – (4) with respect to a stay of an act against real property under subsection (a), by a creditor whose claim is secured by an interest in such real property, if the court finds that the filing of the petition was part of a scheme to delay, hinder, or defraud creditors that involved either – (A) transfer of all or part ownership of, or other interest in, such real property without the consent of the secured creditor or court approval; or (B) multiple bankruptcy filings affecting such real property. 11 U.S.C. §362(d)(4). 91. As noted, above, this case is essentially a serial filing made in bad faith where the sole intent is to hinder and delay the TLDC’s Foreclosure Action.4 92. It has been recognized that a court “can ‘infer an intent to hinder, delay, and defraud creditors from the fact of serial filings alone’ without holding an evidentiary hearing.” In re Richmond, 513 B.R. 34, 38 (Bankr. E.D.N.Y. 2014) (citing In re Procel, 467 B.R. 297, 308 (S.D.N.Y. 2012); In re Blair, No. 09-76150, 2009 WL 5203738, at *4-5 (Bankr. E.D.N.Y. Dec. 21, 2009)); see also, Montalvo, 416 B.R. at 387 (finding that the “timing and sequencing of the filings” significant, where each was filed shortly before a significant event affecting the property and the cases lacked attempts at good faith prosecution). 93. In Richmond, the Debtor filed a chapter 13 bankruptcy petition one day before the hearing on the secured creditor’s request to file a notice of sale. Id. at 37. The case was filed after the secured creditor has obtained relief from the stay to proceed with a foreclosure action in the chapter 11 case of the corporate debtor of which the individual debtor was the principal and 4 Section 362(d)(4) was amended in 2010 to reflect that the test for relief under the subsection should be considered in the disjunctive; the amendment changed the statute from “hinder, and” to “hinder, or” thereby making the phrase “delay, hinder, or defraud.” Pub. L. No. 111-327 §2(a)(12)(C) (2010). 25 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 26 of 28 Desc Main sole shareholder. Id. The Richmond court found that “both the [d]ebtor’s and Lyceum’s filings were on the eve of significant events in the foreclosure action. Lyceum filed its case on the eve of a foreclosure sale and the Debtor’s case was filed on the eve of the return date of [the secured creditor’s] motion in state court to file a notice of foreclosure sale. The timing of both filings permits an inference that the Debtor is attempting to hinder or delay [the secured creditor’s] effort to enforce the Foreclosure Judgment.” Id. 94. In Richmond, it was determined that the plan proposed in corporate case was not feasible and that there was no basis for the corporation to collaterally attack the Foreclosure Judgment due to the Rooker-Feldman doctrine and res judicata. Notwithstanding these findings, the individual then filed for protection in an effort to stay the foreclosure action and attempt to attack the Foreclosure Judgment. 95. The Court then held that “because the [d]ebtor’s and Lyceum’s bankruptcy filings occurred on the eve of significant events affecting the Property, because the Debtor is once again trying to collaterally attack the Foreclosure Judgment, and because, in this case the Debtor cannot modify the mortgage held by [the secured creditor] . . . it is appropriate to grant stay relief to [the secured creditor] pursuant to §362(d)(4), as the filing of this case is part of a scheme to hinder, delay or defraud [the secured creditor].” Id. at 41. 96. Likewise, as set out above, the Debtor filed bankruptcy cases shortly within the entry of orders in the Foreclosure Action and Eviction Proceeding. 97. It is without question, as set out in the facts outlined above, that the Debtor acted in bad faith and as part of a scheme to hinder, delay and defraud the TLDC by the serial filings; it is submitted that relief under 11 U.S.C. §362(d)(4) is warranted. Accordingly, an order should be entered granting the TLDC relief from the stay and providing that the automatic stay under 11 26 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 27 of 28 Desc Main U.S.C. §362(a) shall not apply to the Debtor’s interest in the Real Property Properties for any case filed by the Debtor within 2 years after the date of the Order. f. The TLDC Seeks Confirmation that the Automatic Stay Does Not Apply to the Eviction Proceeding, or in the Alternative, Relief from the Stay to Pursue the Eviction Proceeding 98. As noted, the TLDC obtained a judgment in the Eviction Proceeding awarding possession of the Real Property to the TLDC, together with a judgment against O’Brien’s Public House in the amount of $12,145.00. See Ex. M. The Eviction Order also directed that “a warrant of eviction shall issue removing all named respondents from the [Real Property]. However, the issuance of the Warrant of Eviction is Stayed to and including 11/04/2015.” Id. 99. The named subject of the Eviction Order was O’Brien’s Public House, however, the Warrant of Eviction directed the Marshal of the City of Troy to “remove the respondent(s) listed below: (1) O’Brien’s Public House, Inc. DBA O’Brien’s Public House – And all other persons from the following described premises . . . (1) 41-43 Third Street, Troy, NY 12180”. See Ex. N. Thus, all tenants were directed to vacate the Real Property on November 4, 2015. 100. Movant seeks an order confirming that the automatic stay, as codified at 11 U.S.C. § 362(a), does not prohibit Movant from continuing with the Eviction Proceeding because the tenants are not debtors entitled to the protections provided by the automatic stay. 101. In the alternative, for the reasons stated above, Movant seeks an order authorizing the continuation of the Eviction Proceeding. WHEREFORE, for the foregoing reasons, the TLDC respectfully requests entry of an Order: (a) granting the relief requested in the Motion; (b) granting the TLDC relief from the automatic stay to continue the Foreclosure Action and to pursue and enforce any and all of its legal and equitable rights and remedies with respect to the Real Property and the Debtor; (c) 27 272645 2676122v1 Case 15-12242-1-rel Doc 11 Filed 11/12/15 Entered 11/12/15 11:32:43 Document Page 28 of 28 Desc Main granting the TLDC in rem relief by directing that any subsequent filing shall not be provided with the protections of section 362(a) as it relates to the Real Property, (d) confirming that the Eviction Proceeding is not stayed, or in the alternative an Order authorizing the continuation of the Eviction Proceeding; and (e) granting such other and further relief as this Court deems just and proper. Dated: November 12, 2015 HARRIS BEACH PLLC By: /s/ Kelly C. Griffith Kelly C. Griffith (Bar No. 512814) 333 West Washington Street, Suite 200 Syracuse, New York 13202 (315) 423-7100 kgriffith@harrisbeach.com Attorneys for Troy Local Development Corporation 28 272645 2676122v1