UNITED STATES BANKRUPTCY COURT

W ESTERN DISTRICT OF LOUISIANA

ALEXANDRIA DIVISION

IN RE: NR GROUP, LLC BANKRUPTCY CASE NO.

DEBTOR 08-81329

M OTION FOR ADM INISTRATIVE EXPENSE

PRIORITY CLAIM BY CITY OF ALEXANDRIA

Now into court through undersigned counsel comes the CITY OF ALEXANDRIA, a secured creditor and lessor
of the Debtor, which moves this Court as follows:
1.
City of Alexandria is the lessor of certain nonresidential real property to the Debtor under certain lease
agreements more fully set forth below.
2.
Debtor failed to honor its lease obligations to the City of Alexandria and failed to pay rent due the City of
Alexandria from December 2007 through November 2008.
3.
This matter is a core proceeding and this Court has jurisdiction pursuant to 28 U.S.C. 157, 1334, 11 U.S.C.
1101, et seq., 11 U.S.C. 365 and Bankruptcy Rule 6006 and 11 U.S.C. 503, 361 and Bankruptcy Rules 9014.
4.
The City is the fee simple owner of a tract located between Fourth Street, Jackson Street, Main Street and Fisk
Street. There is presently located on that tract a hotel and convention center. In 1983, the City obtained an Urban
Development Action Grant for $4,975,000.00 for the purpose of buying blighted property and constructing a convention
center for lease to a developer who would construct a hotel on the leased premises under a long term lease.
5.
On February 28, 2008, the City entered into a Ground Lease ("the Ground Lease") with Alexandria Convention
Centre, Ltd. ("the Centre"), which was filed and recorded under Original Instrument Number 763,784 in Conveyance
Book 1084 at Page 798 and in Mortgage Book 956 at Page 296 of the records of Rapides Parish.
6.
The Centre ran into some financial trouble and the lenders who financed the construction of the hotel foreclosed
on the leasehold interest created by the Ground Lease. See Civil Suit Number 142,686, "Guaranty Bank & Trust
Company vs. The Industrial Development Board of Rapides Parish, Inc., Alexandria Convention Centre, Ltd., et al."
7.
On January 7, 1987, the Sheriff adjudicated the leasehold interest created by the G round Lease to Hibernia
National Bank, as Trustee for the various lenders.

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 8.
On May 14, 1988, the lenders transferred the leasehold interest to an entity called Alexandria Hotel Property,
Inc. ("Alexandria Hotel") by an Act Of Conveyance And Contribution filed and recorded in Conveyance Book 1231 at
Page 767 of the Rapides Parish records.
9.
On January 11, 1991, the City and Dimension Development Company, Inc. ("Dimension") executed a new
Amended Ground Lease ("the Amended Lease") which restated and revised all of the terms of the Ground Lease. The
Amended Lease was filed and recorded on January 11, 1991 in Mortgage Book 1214 at Page 452 of the Rapides Parish
records. On that same date, Alexandria Hotel transferred all of its leasehold interest in the property to RT Rapides Hotel
Partnership ("Rapides Hotel") and Dimension assigned all of its leasehold interest in the Amended Lease to Rapides
Hotel.
10.
On March 14, 1995, the City and Rapides Hotel entered into an Amendment To Ground Lease ("the Second
Amendment") which was filed and recorded in Conveyance Book 1431 at Page 948 and in Conveyance Book 1370 at
Page 1 of the records of Rapides Parish which released from the Amended Lease two tracts for the purpose of allowing
the City to construct the new Exhibition and Riverfront Center ("the Exhibition Center").
11.
Effective as of October 25, 1996, the City and Rapides Hotel entered into an amendment to the Amended Lease
("the Third Amendment") which was filed and recorded on October 28, 1996 under Original Instrument Number 1,036,
488 and in M ortgage Book 1429 at Page 539 of the Rapides Parish records.
12.
Effective as of October 29,1996 by a Special W arranty Deed And Assumption Of Ground Lease ("the Deed"),
Rapides Hotel conveyed all of its right, title and interest in the Ground Lease and the Amended Lease to Shaner Hotel
Group Limited Partnership ("Shaner").
13.
Effective as of December 15, 2003, Shaner assigned, transferred and conveyed to N R Group all of Shaner's
right, title and interest in and to the Ground Lease and the Amended Lease by an Assignment And Assumption Of
Ground Lease filed and recorded in Conveyance Book 1680 at Page 221 and in Mortgage Book 1959 at Page 53 of the
Rapides Parish records.
14.
On December 15, 2003, the City and NR Group entered into an amended lease ("the Fourth Amendment")
which was filed and recorded in Conveyance Book 1680 at Page 235 and in Mortgage Book 1959 at Page 67 of the
Rapides Parish records to fix the rent for the period from January 1, 2004 to December 31, 2008 at an annual rent of
$35,000.00.
15.
On December 15, 2003, the City executed an Estoppel Certificate And Acknowledgment ("the Estoppel") which
was filed and recorded in Conveyance Book 1680 at Page 237 and in Mortgage Book 1595 at Page 69, which among
other things provided that all notices to NR Group would go to 3727 Kingston Street, Lake Charles, Louisiana 70603.
Under the terms of the Estoppel, the City agreed to give notice to any leasehold mortgagee who sent the City a true copy

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of its leasehold mortgage, together with written notice specifying the name and address of the leasehold mortgagee,
certain notice of default and termination that would be given to NR Group.
16.
On December 15, 2003 by a M ultiple Indebtedness M ortgage, NR Group mortgaged and hypothecated all of
its right, title and interest in the Ground Lease and the Amended Lease to Hibernia National Bank, now Capital One,
National Association ("Capital One"), which Multiple Indebtedness Mortgage is filed and recorded in Mortgage Book
1959 at Page 74 of the Rapides Parish records.
17.
On June 9, 2008, the City served N R Group with W ritten Notice of Default Under Amended Lease ("the
Default Notice") which was received by N R Group and Capital One on June 10, 2008. The Default Notice notified NR
Group that NR Group had failed to pay the rent for the months of January through June of 2008, failed to pay the
property taxes to the Parish of Rapides for the year 2007, filed to provide the City with duplicate originals of policies
of insurance and failed to provide the City with a letter of credit acceptable to the City in the amount of $85,000.00.
18.
The Default Notice gave NR Group 30 days to cure the failure to pay rent and gave NR Group 60 days to cure
other defaults.
19.
NR Group failed to care the defaults within the time specified in the Default Notice and on August 18, 2008,
the City served NR Group with a Notice To Vacate the leased premises within 5 days.
20.
The Notice To Vacate was delivered to NR Group before August 25, 2008 and a copy of the Notice to Vacate
was delivered to Capital One on August 19, 2008.
21.
The Debtor filed these bankruptcy proceedings on November 14, 2008.
22.
This Court appointed Fred Rosenfeld and/or his management company to manage the hotel property on behalf
of the Debtor in Possession.
23.
The senior secured lender, Capital One, N.A., granted the Debtor in Possession and the management company
authority to use cash collateral of Capital One to continue the hotel in operation pending a liquidation sale.
24.
All parties agreed that it was in the best interest of the Debtor, all creditors and parties in interest and the
bankruptcy estate that the hotel remain open pending the sale.
25.
Further, the City of Alexandria as lessor believes that it is in the best interest of the bankruptcy estate, the City
of Alexandria and the hotel property that the hotel remain open.

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 26.
Further, the hotel has booked two major conventions to be held in the City of Alexandria during the summer
of 2009.
27.
W hile the City of Alexandria does not own the hotel tower, the City owns the real property and owns all of the
adjacent convention and kitchen facilities including the meeting rooms and the parking lot.
28.
The City believes that it is in the best interest of the City that the hotel remain open and in good operating
condition in order to facilitate the use of the City owned convention facilities, meeting rooms and food preparation
facilities.
29.
Further, the use of the hotel and the City convention facilities generates income and tax revenue for the City
and its various enterprises which rely upon the hotel for convention business and tourism.
30.
The City of Alexandria as lessor was informed by the management company that the elevators servicing the
hotel tower were not operable and that immediate repair was needed.
31.
In order to allow the hotel to remain open and to avoid injury or liability to the Debtor in Possession and/or the
City, the City transmitted funds for the repair of the elevators and maintenance of same.
32.
City shows that the initial elevator repairs were to total $82,604.00 and the City shows that said repairs benefit
the bankruptcy estate, Capital One, N.A. and all parties in interest.
33.
The City shows that without the elevators the hotel property would not be usable and incidents could occur
which would give rise to liability for the Debtor in Possession, the bankruptcy estate, Capital O ne and the City of
Alexandria.
34.
The City of Alexandria shows that just cause exists for this Court to grant the City of Alexandria an
administrative expense priority claim and a super priority lien on any proceeds of the sale for the total costs of the
elevator repairs and maintenance which amounts should be paid to the City of Alexandria as first proceeds out of any
sale.
35.
As a result of the emergency nature of the repairs the City intends to request an expedited hearing on this
motion.

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 W HEREFORE CITY OF ALEXANDRIA PRAYS that this motion be deemed good and sufficient and that
after hearing this Court allow the City of Alexandria an administrative expense priority claim in the amount of
$82,604.00 and grant the City a super priority lien over all sales proceeds to be derived from the sale of the hotel.

Respectfully submitted,

W HEELIS & ROZANSKI

By: /s/ Stephen D. W heelis

Stephen D. W heelis #17205
Richard A. Rozanski #22583
P.O. Box 13199
Alexandria, Louisiana 71315-3199
318/445-5600
ATTORNEYS FOR CITY OF ALEXANDRIA,
LOUISIANA

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that the above and foregoing Motion for Administrative Expense Priority Claim has
been served upon Debtor, NR Group, LLC, 701 Fourth Street, Alexandria, LA 71301; Debtor’s attorney, W ade N. Kelly,
1777 Ryan Street, P.O. Box 2065, Lake Charles, LA 70601; Capital One, N.A. c/o Gary Tillman, P.O. Box 12729,
Alexandria, LA 71315; Fred Rosenfeld, M anager, 701 Fourth Street, Alexandria, LA 71301; and Office of U. S. Trustee,
300 Fannin St., Suite 3196, Shreveport, LA 71101, by placing a copy of same in the United States mail postage prepaid.
Alexandria, Louisiana this 17 th day of June, 2009.

/s/ Stephen D. W heelis

OF COUNSEL

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