Pg 1 of 8 UNITED ST J\ TES BANKRUPTCY COURT SOUTHERN DISTRICT Of NEW YORK In re: ERIC BRAVERMAN, M.D., Debtor. Return Date: April 4, 2017 Time: 10:00 A.M. Case No. 17-10524 (SMB) ( Chapter J 1) NOTICE OF MOTION BY 304 PAS OWNER LLC ("LANDLORD") FOR AN ORDER(/\) DECLARING THAT THE AUTOMATIC STAY IN THIS PROCEEDING IS NOT APPLICABLE TO ANY HOLDOVER PROCEEDING OR OTHER ACTION COMMENCED BY LANDLORD AGAINST NON-DEBTOR TENANT LIFE EXTENSION REALTY, LLC ("LER"), OR, ALTERNATIVELY (B) LIFTING ANY AUTOMATIC STAY AND PERMITTING LANDLORD TO COMMENCE J\ HOLDOVER PROCEEDING AGAINST LER UPON THE EXPIRATION OF LER'S TERM ON MARCH 31, 2017; AND/OR (C) DIRECTING DEBTOR, AS 'GOOD GUY' GUARANTOR Of LER, TO CAUSE LER TO COMPLY WITH THE TERMS OF ITS LEASE AND VACATE THE PREMISES THAT IT CURRENTLY OCCUPIES. PLEASE TAKE NOTICE, that, upon the annexed application, 304 PAS Owner LLC ("Landlord"), the owner of the building known as 304 Park A venue South, New York, New York (the "Building''), and landlord of all of the office space therein, including the premises occupied by an entity named Life Extension Realty, LLC ("LER" or "Tenant"), of which debtor Eric Braverman, M.D. ("Debtor") is apparently the sole owner, will move before the Honorable Stuart M. Bernstein, United States Bankruptcy Judge, Southern District of New York, at Room 723, One Bowling Green, New York, New York 10004, on April 4, 2017 at 10:00 a.m., or as soon thereafter as counsel can be heard, for an order: (a) Declaring that the automatic stay in this proceeding is not, and would not be, applicable to any holdover proceeding or other action that Landlord may commence against I,ER to recover possession of its premises upon the expiration of its current tenn on March 31, 2017;
Pg 2 of 8 (b) Alternatively, if any automatic stay were to be deemed applicable to the any such holdover proceeding or other action by Landlord against LER as Tenant, lifting such automatic stay pursuant to Bankruptcy Code 362(h)(l0), 362(d), 503(b) and/or 541(b)(2), and permitting Landlord to commence a holdover proceeding against LER at the expiration of its current term on March 31, 2017, on the grounds, inter alia, that (i) the current term expires automatically on March 31, 2017; (ii) a prior bankruptcy proeeedi ng commecned by LER was dismissed on November 10, 2017 (GaiTity, J.); and (iii) LER is, at present, in arrears in excess of $640,000; and/or (c) Directing Debtor, as 'good guy' guarantor of LER, to cause LER to comply with the provisions of its Lease and vacate the Premises as of March 31, 2017; and (d) Granting Landlord such other relief as the Comt deems just and proper. PLEASE TAKE FURTHER NOTICE that, pursuant to Local Rule 9006-l(b), any answering papers shall be served so as to ensure actual receipt by the undersigned cow1sel to Landlord no later than March 28, 2017. Dated: New York, New York March 20, 2017 STEMPEL BENNETT CLAMAN & HOCHBERG, P.C. Attorneys for 304 PAS Owner LLC By: /s Edmond P. O'Brien (EO- 5583) 67 5 Third A venue, 31 st Floor New York, New York 10017 (212) 681-6500 2
Pg 3 of 8 UNlTED STATES BANKRUPTCY COURT SOUTHERN DISTRICT OF NEW YORK In re: ERIC BRAVERMAN, M.D., Debtor. Return Date: April 5, 2016 Time: 10:00 A.M. Case No. 17-10524 (SMB) (Chapter 11) APPLICATION OF 304 PAS OWNER LLC ("LANDLORD") FOR AN ORDER (A) DECLARING THAT THE AUTOMATTC ST A YIN THIS PROCEEDING IS NOT APPLICABLE TO ANY HOLDOVER PROCEEDING OR OTHER ACTION COMMENCED BY LANDLORD AGAINST NON-DEBTOR TENANT LIPE EXTENSION REALTY, LLC ("LER"), OR, AL TERNA Tl VEL Y (B) LIFTING ANY AUTO MA TIC ST A Y AND PERMITTING LANDLORD TO COMMENCE A HOLDOVER PROCEEDING AGAINST LER UPON THE EXP.IRA TION OF LER'S TERM ON MARCH 31, 2017; AND/OR (C) DIRECTING DEBTOR, AS 'GOOD GUY' GUARANTOR OF LER, TO CAUSE LER TO COMPLY WITH THE TERMS OF ITS LEASE AND VACA TE THE PREMISES THAT IT CURRENTLY OCCUPIES. TO : THE HONORABLE STUART M. BERSTEIN, UNITED STA TES BANKRUPTCY JUDGE: 304 PAS Owner LLC, by its undersigned cotmsel, for its Application, respectfully states: 1. 304 PAS Owner LLC ("Landlord") is the owner of the building knows as 304 Park A venue South, and landlord of all of the office space therein, including the entire sixth floor premises currently occupied by an entity named Life Extension Realty, LLC ("LER" or "Tenant"), which is owned exclusively by debtor Eric Braverman ("Debtor"), and is where Debtor, either as an individual or through some other entity, operates his 'medical' practice.
Pg 4 of 8 JURISDICTIONAL ALLEGATIONS 2. This is a contested matter brought pursuant to Bankruptcy Rules 4001 ( a) and 9014, Local Rules 4001-1 and 9006-l(b), and 362(b)(10), 362(d), 503(b) and/or 54l(b)(2). 3. 304 PAS Owner LLC is a Delaware limited liability company authorized to do business in the State of New York. 4. Debtor is an individual residing in New York County. 5. Upon information and belief: LER is a New York limited liability company with its principal place of business in New York, New York. 6. This contested matter arises in the case of In re Eric Braverman, Case No. 17-10524 (SMB), a Voluntary Chapter 11 proceeding commenced on March 3, 2017 and pending in the United States Bankruptcy Court for the Southern District of New York. 7. Jurisdiction is conferred on this Court by the provisions of 28 U.S.C. 1334. This is a core proceeding within the meaning of 28 U.S.C. 157(b ). 8. Upon information and belief, pursuant to 1107 and 1108 of the Bankruptcy Code, Debtor is operates a medical practice as a debtor in possession. APPLICATION 9. LER's current term expires on March 31, 2017. l 0. The background history of this tenancy is a follows: (a) LER entered into a written lease agreement premises, dated June 2006 (the "Lease"), with a predecessor of Landlord. LER's Lease expired by its terms on July 31, 2016. Debtor is also the 'good guy' guarantor of LER's lease obligations. (A copy LER>s expired Lease and Debtor's 'good guy' guaranty is annexed as Exh. ]); (b) LER had defaujtcd on its obligation to pay rent as far back as 2013, and 2
Pg 5 of 8 L,mdlord commenced a summary non-payment proceeding; ( c) After many delays in Ci vii Court, and on the eve of trial of that summary non-payment proceeding filed by Landlord, LER filed for Chapter 11 bankrnptcy on June 16, 2016, which stayed the summary proceeding. 1 (d) Thereafter, LER's Lease expired on July 31. 2016. Landlord moved the before Bankruptcy Cotrrt (Garrity, J.) for various relief. By Order, dated August 25, 2016, the Bankruptcy Court granted Landlord's motion in part -- declaring that the Lease was not part of LER's bankruptcy estate, and lifting the automatic stay effective as of September 30, 2016, so that Landlord could pursue its remedies in Civil Court. Judge Gan-ity specifically conditioned his order on Tenant paying to Landlord the total amount of $140,351.69, without prejudice, representing administrative rent and use and occupancy for the months of July and August 2016. Tenant in fact made the payment required under the Bankruptcy Order and Landlord accepted this payment, without prejudice. (Attached as Exh. 2 is the Order dated August 25, 2016); (e) Thereafter, the Trustee moved to dismiss LER's bankruptcy proceeding. By an order dated November 10, 2016, LER's bankrnptcy was dismissed. (Attached as Exh. 3 is the Order dated November 10, 2016; (f) On October 3, 2016, Landlord commenced a summary holdover proceeding. In that proceeding, even though payment by LER of administrative rent and use occupancy was ordered by the Bankruptcy Court, and was accepted by Landlord LER's lengthy history of nonpayment, and the many proceedings commenced are outlined in the aflirmation of Dennis H. McCoobcry, dated October 3, 2016 (annexed as Exh. 4), which was submitted in opposition to LER's motion to dismiss Landlord's holdover petition in Civil Court. To date, LER has failed to pay to Landlord $630,446.77 in rent, additional rent and use and occupancy. 3
Pg 6 of 8 without prejudice, nevertheless the Civil Court held that a new month-to-month tenancy had been created, so that a predicate 30-Day notice was necessary to terminate LER's right of occupancy.2 (g) While we have appealed the Civil Court's decision m this regard, Landlord needs the Premises back for another tenant in the Building. In this regard, Landlord entered into a lease for the Premises, with an existing tenant of the Building. The term of that lease commenced on August 1, 2016, i.e., the day after the expiration of LER's Lease. LER's failure to timely vacate is injuring the 'new' tenant, by thwarting that tenant's expansion plans. Moreover, under the new lease, Landlord would be receiving significantly more rent for the Premises. Indeed, Landlord has not received any use and occupancy for the Premises since August 25, 2017, when LER made the payments ordered by Judge Garrity. Accordingly, Landlord, on February 22, 2017, issued a 30-day notice terminating LER's (purpo11ed) month-to-month tenancy as of March 30, 2017, and is planning to commence a holdover proceeding on April 3, 2017. 11. Landlord is concerned that, given all of the past efforts by LER at delay and games-playing, LER will now attempt to argue that it is somehow protected by the automatic stay triggered by this proceeding. 12. Even if, however, this were a bankruptcy proceeding commenced by LER, the automatic stay woujd not prolect LER (as Judge Garrity held), because the Lease expired by its terms on July 31, 2016, and the month-to-month tenancy expires on March 3 J, 2017. In re Policy Realty, 242 B.R. 121 (Bankr. S.D.N.Y. 1999), affd, 213 F.3d 626 (2d Cir. 2000); In re Chautauqua Capltal Corporation, 135 B.R. 179 (W.D. Pa. 1992) (holding that the automatic stay Although the Civil Court's decision is dated October 28, 2017, it was unavailable from the Court until early January 2017. 4
Pg 7 of 8 provided by 362 does not prevent a contract, agreement or lease from expiring according to its terms post-bankruptcy); In re Kleinman, 136 B.R. 69 {Bankr. S.D.N.Y. 1991); In re Compass Development Inc., 55 B.R. 260 (Bankr. Dist. N.J. 1985); see, also, In re GSVC Restaurant Corp., 3 B.R. 491 (Bankr. S.D.N.Y.) (automatic stay terminated for "cause" where debtor's interest as tenant had been terminated as a matter of state law, pre-petition, aff'<l, 10 B.R. 300 (S.D.N.Y. 1980). 13. Accordingly, ~ fortiori, Landlord asks the Court to declare that the automatic stay of this proceeding does not Landlord from proceeding as of March 31, 2017, to evict LER. 14. Alternatively, if for any reason, the Court were to conc)udc that the automatic stay is applicable, it shou)d be lifted for cause, in view of: inter alia, the prior dismissal of LER's bankruptcy. 15. In addition, Landlord notes that (a) Debtor is a 'good guy' guarantor; (b) Landlord conunenced an action against Debtor on December 20, 2017, on the 'good guy' guaranty, when LER' s arrears were in excess of $600,000; ( c) Debtor moved to dismiss that action for purported lack of service on January 23, 2017, and Landlord opposed that motion on February 17, 2017. The motion was returnable on February 24, 2017, and was assigned to Justice David B. Cohen. Obviously, since this action is directly against Debtor, the automatic stay of this proceeding clearly applies to it. However, there is no reason why the automatic stay should prevent Landlord from proceeding against non-debtor LER to recover possession of the Premises. 16. Plainly, Debtor, as 'good guy' guarantor, cannot 'cover' LER's arrears. To the extent that LER is able to continue in possession after March 31, 2017, Debtor's liability will increase -- but it is clear that Landlord will not be compensated. Moreover, Landlord has an existing tenant ready to take the space once LER vacates. 5
Pg 8 of 8 17. If Debtor wishes to continue his medical practice, he should be required to do that somewhere else. 18. Accordingly, it is respectfully requested that this Court declare: (a) that the automatic stay in this proceeding is not, and would not be, applicable to any holdover proceeding or other action that Landlord may commence against LER; (b) alternatively, if the automatic stay is applicable to the any such holdover proceeding or other action, the automatic stay should be lifted and Landlord should be permitted to commence a holdover proceeding against LER forthwith; (c) alternatively, Debtor should be directed to cause LER to comply with the provisions of its expired Lease and vacate the Premises forthwith Dated: New York, New York March 20, 2017 STEMPEL BENNETT CLAMAN & HOCHBERG, P.C. Attorneys for 304 PAS Owner LLC By: Is Edmond P. O'Brien (EO- 5583) 675 Third Avenue, 31 st Floor New York, New York 10017 (212) 681-6500 6