Case 2:13-bk-15130-SK

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KOLODZI LAW FIRM
5981 Topanga Canyon Boulevard Woodland Hills, California 91367

MICHAEL D. KOLODZI, STATE BAR NO. 255772 K OL OD ZI L A W F I R M 5981 Topanga Canyon Boulevard Woodland Hills, CA 91367 Telephone: 818.287.7173 Facsimile: 866.571.6094 Email: mdk@mdklawfirm.com 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, LLCS 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).

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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 PSLs 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 Trustees 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.
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Opposition, Doc. 521, pg. 2, Lines 8-10. -1-

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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 trustees 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.

8 Contrary to the assertion of the Chapter 11 Trustee, the above language does not require 9 that PSL bring a motion for relief in order to obtain the return of its Premises. The language 10 merely requires that IF a motion for relief is to be brought, PSL must first surrender the vehicles. 11 PSL has not violated the Stipulation by the present Motion because PSL is not moving for 12 relief from the automatic stay. 13 The present Motion for Surrender under Section 365(d)(4) is an entirely different 14 proceeding from a motion for relief from stay under Section 362 of the Bankruptcy Code. 15 As the Chapter 11 Trustee points out in his Opposition, the Stipulation was a contractual 16 17 18 365(d)(4) to a surrender of the vehicles. 19 A stipulation is a contract and therefore basic contract principles are used to interpret a 20 21 22 23 B.R. 705 (B.A.P. 2013). 24 In the present instance, the clear and explicit meaning of Paragraph 10.d. of the 25 Stipulation is that it applies only in instances where a motion for relief is sought under Section 26 27 28 29
KOLODZI LAW FIRM
5981 Topanga Canyon Boulevard Woodland Hills, California 91367

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

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

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Adversary Case No. 2:13-ap-01468-SK, Doc. 30 Adversary Case No. 2:13-ap-01468-SK, Doc. 32 -2-

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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 trustees 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 provisions 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 PSLs ability to seek a motion for relief to terminate the Trustees 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 wouldnt 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 Trustees occupancy is directly dependent upon the prepetition 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

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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.

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Doc 523 Filed 03/12/14 Entered 03/12/14 15:56:48 Main Document Page 6 of 9 Respectfully submitted, K OL ODZI L A W F I RM

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KOLODZI LAW FIRM
5981 Topanga Canyon Boulevard Woodland Hills, California 91367

DATED: March 12, 2014

By:

/s/ Michael D. Kolodzi MICHAEL D. KOLODZI, ESQ. Attorney for PERFECT SCIENCE LABS, LLC

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