smb Doc 155 Filed 06/21/16 Entered 06/21/16 14:09:24 Main Document Pg 1 of 5

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1 Pg 1 of 5 Howard W. Kingsley, Esq. ROSENBERG & ESTIS, P.C. 733 Third Avenue New York, New York Telephone: (212) Facsimile: (212) Attorneys for Landlord-Creditor 900 Third Avenue, L.P. UNITED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK x In re: Chapter 11 AOG Entertainment, Inc., et. al., Case No (SMB) x Debtor. (Jointly Administered) OBJECTION TO DEBTOR'S MOTION FOR AN ORDER (A) AUTHORIZING REJECTION OF LEASE WITH 900 THIRD AVENUE, L.P., (B) ESTIMATING RESULTING REJECTION DAMAGE CLAIM, AND (C) RELATED RELIEF 900 Third Avenue, L.P. ("Landlord"), by its attorneys, Rosenberg & Estis, P.C., hereby objects to the motion of the debtors and debtors in possession (collectively, "Debtors") for an order (a) rejecting the Lease for the Premises between Landlord and Tenant, (b) estimating Landlord's claim at $0, and (c) unspecified "related relief," as set forth below (the "Motion").1 LANDLORD DOES NOT OBJECT TO TENANT'S MOTION TO REJECT THE LEASE IF CERTAIN CONDITIONS ARE MET 1. Landlord does not object to Tenant's rejection of the Lease provided that Tenant is required to turnover to Landlord, the Sublease Letter of Credit as Tenant admittedly is ~ Defined terms not defined herein have the same meanings ascribed to them in the Motion.

2 Pg 2 of 5 required to do pursuant to the terms of the Lease (Motion, 12) immediately upon entry of the Court's order rejecting the Lease. 2. The second condition is that the rejection order should be effective on the date of entry of the rejection order, not when the Motion was filed, because (a) Tenant failed to provide any basis as to why the effective date of rejection should be retroactive to the date that the Motion was filed, and (b) the majority view is that "'the effective date of rejection is the date of the bankruptcy court's order approving rejection, and that court approval is a condition precedent to effective rejection.' In re Jamesway Corp., 179 B.R. 33, 37 (S.D.N.Y.1995). See, e.g., In re Federated Department Stores, Inc., 131 B.R. 808, (S.D. Ohio 1991) (`[T]he effective date of rejection for purposes of 11 U.S.C. 365(d) was the date of the bankruptcy court's order approving the rejection[.]'); In re 1 Potato 2, Inc., 182 B.R. 540, 542 (Bankr. D. Minn. 1995) (`[R]ejection of a lease is only effective upon court approval.')." In re KP Fashion Co., 2011 WL , at *3(S.D.N.Y. 2011). 3. Although a retroactive rejection date can be set when Landlord has caused delay (Aldephia Business Solutions, Inc. v. Abnos, 482 F.3d 602 (2007), fn. 1, citing Constant Ltd. P'ship v. Jamesway Corp. (In re Jamesway Corp. ), 179 B.R. 33, 39 (S.D.N.Y. 1995), that is not the case here. Indeed, no such delay is alleged. 4. Thus, Tenant should have to pay, and should not be permitted to avoid, any and all charges due under the Lease that may have accrued between the roughly two week period from the date of the Motion through the date that the Court's order is entered. 11 U.S.C. 365(d)(3). -2-

3 Pg 3 of 5 DEBTORS' MOTION FOR AN ESTIMATION OF LANDLORD'S DAMAGES SHOULD BE DENIED 5. In its chapter 11 petition, AOG Entertainment, Inc. estimated that there are at least 200 and no more than 999 creditors and its liabilities are at least $100 million. ECF Doc 1. administrative expenses. 6. The Motion was made less than two months after the Petition Date. 7. No bar date has been set. 8. Landlord has not yet filed a proof of claim or a claim for any 9. On June 17, 2016, Debtors filed a proposed Disclosure Statement (ECF Doc. 145) and Joint Chapter 11 Plan (ECF Doc. 144) (the "Proposed Plan"), and by motion, sought, inter alia, approval of such Disclosure Statement (ECF Doc. 146). 10. The Proposed Plan speaks of Debtors seeking estimation of claims, not now, but months into the future. See Proposed Plan, Contrary to Tenant's claim, it has not paid all amounts due under the Lease. As of June 21, 2016, Tenant has failed to pay outstanding post-petition additional rent totaling $11, due under the Lease (the "Arrears"). Exhibit A hereto. 12. Accordingly, Landlord intends to file a claim at least in the amount of the Arrears. Landlord's claim in this case is not expected to be complex and breach of lease claims asserted by landlords in bankruptcy cases are often resolved without litigation. 13. In paragraph 22 of its motion, Debtors state: "Bankruptcy courts may estimate claims in order `to avoid undue delay in the administration of bankruptcy proceedings. [Citation omitted.] A bankruptcy court can estimate a claim to avoid the need to wait the outcome of the law. [Citation -3-

4 Pg 4 of 5 omitted]. In addition, estimation of a claim under section 502(c)(1) is appropriate if liquidation of the claim `will take too long and unduly delay the distribution of the estate's assets. [Citation omitted.]" 14. Conspicuously absent from the Motion is any attempt to satisfy such criteria. The reason is obvious, this case has just been commenced and the claim process for all creditors will, upon information and belief, not be resolved for a significant amount of time as evidenced by the Disclosure Statement and the Proposed Plan ( 9.1 provides, inter alia, that Debtors can object to claims such as Landlord's claim 180 days after the "Effective Date," which has not yet been established). 15. Simply, there is absolutely no risk that the resolution of Landlord's claim, if any, will delay the administration of the case at this point in time. Indeed, Debtors do not allege any. 16. In addition, the statute's purpose to avoid awaiting a resolution in outside lawsuits (Matter of Ford, 967 F.2d 1047, 1053 (5th Cir. 1992)) is not present here because there is no outside litigation. Landlord's claim will be asserted and determined in this proceeding. 17. Lastly, Debtors' cases do not help Tenant. In Frito-Lay, Inc. v. LTV Steel Co. (In re Chateaugay Corp.), 10 F.3d 994, 957 (2d Cir. 1993), the claim was not estimated even when the case was very fax along (the plan was "substantially consummated"). In O'Neil v. Continental Airlines (Matter of Continental Airlines), 981 F.2d 1450 (5th Cir. 1993), there was a bar date, and the Bankruptcy Court's estimation was vacated on appeal. In re New York Medical Group, P.C., 265 B.R. 408 (Bankr. S.D.N.Y. 2001), the Bankruptcy Court rejected the argument that it should estimate a medical malpractice claim and vacated the stay so that the claim could be litigated in state court. 'l~~

5 Pg 5 of Accordingly, Debtors' Motion for relief under 502(c) should be denied. CONCLUSION 19. Although Debtors seek "related relief," the Motion is silent as to what other and specific relief it is seeking. Thus, Debtors should not be awarded any "related relief." WHEREFORE, the Motion should be denied in its entirety, except as set forth above, and Landlord should be awarded such other and further relief that the Court deems just and proper. Dated: New York, New York.. 1 June 21, 2016 ~ ~~L;~;~!~~~ f' Howard W. Ki ~ ey,~ G -5-

6 smb Doc Filed 06/21/16 Entered 06/21/16 14:09:24 Exhibit A Pg 1 of 3 EXHIBIT A

7 smb Doc Filed 06/21/16 Entered 06/21/16 14:09:24 Exhibit A Pg 2 of 3 From: Kingsley, Howard Sent: Friday, June 17, :02 PM To: Brunswick, Gabriel Cc: Nasypany, Jerome Subject: CORE Media Attachments: 900fax@paramount-group.com_ _ C2.pdf Attached is an a/r report for amounts due under the lease through 6/15. As I had stated, there may be additional amounts that are due. Howard W. Kingsley Rosenberg & Estis, P.C. 733 Third Avenue New York, New York hkin~sley(a,rosenber~estis.com 1

8 smb Doc Filed 06/21/16 Entered 06/21/16 14:09:24 Exhibit A Pg 3 of 3 Database: PGI_DATA Aged Delinquencies Page: 1 6LDG: 903 Paramount Group Date: 6/15/ THIRD AVENUE LP Time: 09:39 AM Period: 06/16 Invoice Date Category Source Amount Current 1 Month 2 Months 3 Months 4 Months CORE MEDIA GROUP INC Master Occupant Id: Day Due: 1 Deiq Day: Current Last Payment: 6/9/ , G/2/2016 TWV TWO OT HVAC CH 1, , /2/2016 TWV TWO OT HVAC CH 1, , /2/2016 TWV TWO OT HVAC CH 1, , /2/2016 TWV TWO OT HVAC CH 1,807.Od 1, /10/2016 STX Sales Tax CH /10/2016 STX Sales Tax CH /10/2016 TWE TWO Engineering CH /10/2016 TWQ TWO General Building Svc CH /14/2016 ELC Electric CH 3, , /14/2016 ELC Electric CH 1, , /14/2016 STX Sales Tax CH O.OQ /14/2016 STX Sales Tax CH CORE MEDIA GROUP INC Total: 11, , BLDG 903 Total: 11, , Grand Total: 11, ,