In Re Streckrich Petro Corporation, 08-31860 - Eastern District of ...

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owner, is entitled to the entire award for the taking. (Ex. 5 at § 12.3.) If SPC elects not to terminate the Agreement because of a taking, SPC is only “entitled to the award to the extent required for restoration of the Premises, and Landlord shall be entitled to the balance of the award not applied to restoration.” (Ex. 5 at § 12.3.) The Agreement further requires that “not later than (i) thirty (30) days prior to the expiration of the Lease or (ii) ninety days after termination of the tenancy, whichever may apply” SPC must provide Royall with certain hazardous material records and environmental records. (Ex. 5 at § 4.7.) While the Agreement requires SPC to pay all of the real estate taxes on the property, it also requires SPC to provide Royall with a copy of the paid tax bills, and it gives both SPC and Royall the ability to contest the validity or amount of any real estate tax assessments. (Ex. 5 at §5.1.) The Agreement also states that SPC’s interest in the Agreement is subordinate to any mortgages, and that it agrees to attorn to any successor of interest in Royall under the Agreement for the balance of the term of the Agreement. (Ex. 5 at § 16.1-16.2.) All of these provisions underscore the fact that Royall continued to “ ‘retain all risk and benefits as to the value of the real estate at the termination of the lease.’ ” United Airlines, Inc. 416 F.3d at 614 (quoting S.Rep. No. 989, 95th Cong., 2d Sess. 64 (1978)). iii. Even if the aggregate rental payments have a present value equal to the original cost of the Four Properties, this fact alone does not outweigh the numerous factors discussed above. One of the other factors discussed in Pummill is “whether the aggregate rental 22
payments have a present value equal to or in excess of the original cost of the leased property.” 353 B.R. at 668. The parties did not present any evidence as to the original cost of the Four Properties, other than the affidavit of Owen Richelieu. That affidavit states that the Four Properties were valued at “$8.5 million at the time of the 2007 Stock Purchase Agreement.” (Richelieu Aff. 18.) SPC claims that the Agreement “required a stream of payments over 20 years that totaled almost $13,000,000 for property that was initially to be acquired for approximately $9,000,000.” (Docket No. 55 at 5.) Assuming without deciding that the aggregate rental payments do have a present value in excess of the original cost of the leased property, this factor alone does not suffice to outweigh the factors discussed above. iv. The Court disagrees with SPC’s characterization of the Agreement. In spite of all of the facts discussed above, SPC argues that the Agreement is not a lease, but actually is just part of the Stock Purchase Agreement and the Addendum. SPC asserts that [The Agreement] on its face states that it is part of the stock purchase. Including terms which provide for an option to purchase under specified circumstances (Article XX), required a stream of payments over 20 years that totaled almost $13,000,000 for property that was initially to be acquired for approximately $9,000,000, prohibited assignment (Article XIV), limited the use of the stores to gas and convenience store uses (Article IV), provided a right of first refusal to the Debtors (Article XXI) and contains cross-default language to the $2 Million Note and the $4 Million Note are all terms which insure that the Income Producing Stores remain a part of the purchase package until the stock price is paid in full. (Docket No. 55 at 5.) The Court disagrees with SPC’s characterization of these provisions of the 23
Page 1 and 2: UNITED STATES BANKRUPTCY COURT EAST
Page 3 and 4: Streckmann (“Streckmann”) are t
Page 5 and 6: hold the Four Properties. 3 (Hooser
Page 7 and 8: argued that if SPC chose to assume
Page 9 and 10: SPC responded that, if the Agreemen
Page 11 and 12: 11 U.S.C. §365(d)(4). SPC, as debt
Page 13 and 14: discussed other factors that a majo
Page 15 and 16: full); or (2) whenever the $2 milli
Page 17 and 18: as the result of a taking, then SPC
Page 19 and 20: d. The remaining facts support a fi
Page 21: properties upon reasonable notice t
Page 25 and 26: the Court concludes that the Agreem
Page 27 and 28: the question of whether there was a

In Re Streckrich Petro Corporation, 08-31860 - Eastern District of ...

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