Envireco International Motors, Inc. v. Elmhurst Transmission Corp. (In Re Elmhurst Transmission Corp.)

E.D. New York

Envireco International Motors, Inc. v. Elmhurst Transmission Corp. (In Re Elmhurst Transmission Corp.)

60 B.R. 9, 1986 Bankr. LEXIS 6408

CourtUnited States Bankruptcy Court, E.D. New York

DecidedMarch 26, 1986

Docket8-19-71085

StatusPublished

Cited by4 cases

This text of 60 B.R. 9 (Envireco International Motors, Inc. v. Elmhurst Transmission Corp. (In Re Elmhurst Transmission Corp.)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, E.D. New York primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Envireco International Motors, Inc. v. Elmhurst Transmission Corp. (In Re Elmhurst Transmission Corp.), 60 B.R. 9, 1986 Bankr. LEXIS 6408 (N.Y. 1986).

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Opinion

DECISION AND ORDER

ROBERT JOHN HALL, Bankruptcy Judge.

This matter was heard by the order to show cause of Envireco International Motors, Inc. (“Envireco”) to enjoin the defendants from terminating Envireco’s sublease. At least one of the defendants made a motion to dismiss for both jurisdictional and substantive reasons.

Envireco was a subtenant of the debtor, Elmhurst Transmission Corp. (“Elmhurst”). On February 14, 1985, this court deemed rejected the debtor’s lease with its landlord. Apparently the debtor’s counsel did not realize debtor’s duty to assume its lease within 60 days of filing for bankruptcy. The District Court and Circuit Court of Appeals subsequently affirmed the rejection. Now, the debtor’s former subtenant wants a preliminary injunction against eviction even though his lessor, the debtor, has no rights in the property.

If a debtor’s lease is rejected in bankruptcy, 11 U.S.C. § 365(h)(1), affords his subtenants no more than their rights under state law. 1 Accordingly, this case belongs in state court. The debtor’s bankruptcy case is near completion and the contemplated litigation between the debtor’s former landlord and the debtor’s former tenant will not affect the debtor’s bankruptcy estate. Thus, the court abstains from hearing the case under 28 U.S.C. § 1334(c); and the adversary proceeding is hereby dismissed.

The court is concerned about the subtenant’s accusation that the debtor’s principal has violated his fiduciary duty to the debt- or by allowing his wife to purloin the corporate opportunity to profit on the transfer of debtor’s lease. That is certainly a matter to be pursued in bankruptcy court.

SO ORDERED.

1

. "... the lessee ... may remain in possession of the leasehold ... the term of which has commenced for the balance of such term and for any renewal or extension of such term that is enforceable by such lessee ... under applicable non-bankruptcy law." (Emphasis added). 11 U.S.C. § 365(h)(1), see 124 Cong.Rec. H 11,093 (Sept. 28, 1978); S 17,410 (Oct. 6, 1978).

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DECISION AND ORDER

ROBERT JOHN HALL, Bankruptcy Judge.

This matter was heard by the order to show cause of Envireco International Motors, Inc. (“Envireco”) to enjoin the defendants from terminating Envireco’s sublease. At least one of the defendants made a motion to dismiss for both jurisdictional and substantive reasons.

Envireco was a subtenant of the debtor, Elmhurst Transmission Corp. (“Elmhurst”). On February 14, 1985, this court deemed rejected the debtor’s lease with its landlord. Apparently the debtor’s counsel did not realize debtor’s duty to assume its lease within 60 days of filing for bankruptcy. The District Court and Circuit Court of Appeals subsequently affirmed the rejection. Now, the debtor’s former subtenant wants a preliminary injunction against eviction even though his lessor, the debtor, has no rights in the property.

If a debtor’s lease is rejected in bankruptcy, 11 U.S.C. § 365(h)(1), affords his subtenants no more than their rights under state law. 1 Accordingly, this case belongs in state court. The debtor’s bankruptcy case is near completion and the contemplated litigation between the debtor’s former landlord and the debtor’s former tenant will not affect the debtor’s bankruptcy estate. Thus, the court abstains from hearing the case under 28 U.S.C. § 1334(c); and the adversary proceeding is hereby dismissed.

The court is concerned about the subtenant’s accusation that the debtor’s principal has violated his fiduciary duty to the debt- or by allowing his wife to purloin the corporate opportunity to profit on the transfer of debtor’s lease. That is certainly a matter to be pursued in bankruptcy court.

SO ORDERED.

1

. "... the lessee ... may remain in possession of the leasehold ... the term of which has commenced for the balance of such term and for any renewal or extension of such term that is enforceable by such lessee ... under applicable non-bankruptcy law." (Emphasis added). 11 U.S.C. § 365(h)(1), see 124 Cong.Rec. H 11,093 (Sept. 28, 1978); S 17,410 (Oct. 6, 1978).

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60 B.R. 9, 1986 Bankr. LEXIS 6408, Counsel Stack Legal Research, https://law.counselstack.com/opinion/envireco-international-motors-inc-v-elmhurst-transmission-corp-in-re-nyeb-1986.

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