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Bankruptcy Keyed to Bussel, 12th Ed.
Matter of U.L. Radio Corp.
Citation:
19 B.R. 537 (Bankr. S.D.N.Y. 1982)Facts
U.L. Radio Corp. entered into a ten-year lease with Jemrock Realty for a store located at 2656 Broadway, New York, on September 17, 1979. The lease contained a use clause restricting the premises to television service and sale of electrical appliances. On May 20, 1981, U.L. Radio filed for Chapter 11 bankruptcy and continued to operate as a debtor in possession. As part of its liquidation plan, U.L. Radio sought to assign the lease to Just Heaven Restaurant, which intended to operate a small bistro. The proposed assignment would provide U.L. Radio with $2,000 per month from three months after court approval until October 31, 1988, funding a plan to pay unsecured creditors 100% of their claims. Just Heaven’s president provided a personal guarantee for rent payments for the first two years and allocated $20,000 for construction, including soundproofing. Jemrock Realty opposed the assignment, arguing that the change in use violated the lease terms.
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