Sulakshna, Inc. v. Transmedia Network (In re Sulakshna, Inc.)
United States Bankruptcy Court for the Eastern District of Pennsylvania
April 4, 1997, Decided
Chapter 11, Bankruptcy No. 96-13303DAS, Adversary No. 97-0036DAS
BY: DAVID A. SCHOLL, CHIEF BANKRUPTCY JUDGE
Before us for decision is the instant proceeding ("the Proceeding"), brought by SULAKSHNA, INC. ("the Debtor") and its principal, J. MICHAEL KENNEY ("Kenney") (Kenney and the Debtor are collectively referenced as "the [**2] Plaintiffs"), against TRANSMEDIA NETWORK, INC. ("the Network") and TRANSMEDIA RESTAURANT COMPANY, INC. ("the Restaurant Co.") (the Network and the Restaurant Co. are collectively referenced as "the Defendants"). The Plaintiffs seek specific performance of the Defendants' alleged contract to advance a $ 50,000 loan balance to them, plus alleged consequential damages of $ 331,121.33.
Although we find that the Plaintiffs have established a liability of the Defendants for breach of the underlying contract, we find that, in light of the heightened burden to be met when damages based on lost profits of a new business are at issue, the Plaintiffs have not proven that they will suffer damages measurable with sufficient certainty. Therefore, we will limit their damages to a forgiveness of $ 50,000 of the Plaintiffs' $ 100,000 [*425] liability to repay the unremitted $ 50,000 loan balance, escalated by $ 5,000 weekly if the Defendants fail to make the remittance in timely fashion.
B. PROCEDURAL AND FACTUAL HISTORY
The Debtor filed the underlying voluntary Chapter 11 bankruptcy case on April 12, 1996. A week later, on April 19, 1996, the Debtor's landlord, the International House of Philadelphia [**3] ("the Landlord"), filed a motion seeking relief from the automatic stay. The Landlord's vigor in pursuing relief, which did not abate even after a plan of reorganization was finally confirmed on October 30, 1996, was ignited by the Debtor's long delay in refurbishing a large restaurant in the midst of the Landlord's multi-use facility, built to accommodate foreign students at the nearby University of Pennsylvania ("Penn") and other schools.
After a hearing of May 15, 1996, on the Landlord's motion for relief, we entered an Order of May 16, 1996, conditioning the stay on the Debtor's (1) moving to assume its lease by May 31, 1996; (2) prevailing on such a motion at a hearing of June 12, 1996; and (3) promptly filing a plan and disclosure statement by a date to be established at the hearing on June 12, 1996. After the June 12 hearing, an Order of June 14, 1996, was entered, permitting assumption of the lease and requiring the Debtor to file a plan and accompanying disclosure statement by July 31, 1996.Read The Full CaseNot a Lexis Advance subscriber? Try it out for free.
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207 B.R. 422 *; 1997 Bankr. LEXIS 359 **
In re: SULAKSHNA, INC., Debtor; SULAKSHNA, INC., J. MICHAEL KENNEY, Plaintiffs v. TRANSMEDIA NETWORK, INC., TRANSMEDIA RESTAURANT COMPANY, INC., Defendants
Disposition: [**1] Judgment entered in the Proceeding in part in favor of Plaintiff SULAKSHNA, INC. ("the Debtor") only, and against Defendant TRANSMEDIA RESTAURANT COMPANY, INC. ("the Restaurant Co.") only. All other claims of the Plaintiffs for relief from the Defendants in the Proceeding DENIED. All claims of the Defendants against the Plaintiffs, particularly the Counterclaims of the Defendants against Plaintiff J. MICHAEL KENNEY, DISMISSED.
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