3230355v.7 UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK -----------------------------------------------------------x In re: FEDERATION EMPLOYMENT AND Chapter 11 GUIDANCE SERVICE, INC. d/b/a/ FEGS, 1 Case No. 15-71074 (REG) Debtor. -----------------------------------------------------------x ORDER (A) AUTHORIZING THE TERMINATION OR SURRENDER OF OMH CLIENT PROGRAM AGREEMENTS AND OPERATING CERTIFICATES; (B) AUTHORIZING THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES IN CONNECTION WITH SUCH TRANSFERS; (C) AUTHORIZING THE LEASE OF CERTAIN OWNED PROPERTY; AND (D) RELATED RELIEF Upon consideration of the motion (the “Motion”) 2 of Federation Employment and Guidance Service, Inc. d/b/a FEGS (“FEGS” or the “Debtor”) as a Chapter 11 debtor and debtor-in-possession in the above referenced Chapter 11 Case, seeking entry of an order pursuant to sections 105(a), 363 and 365 of title 11 of the United States Code (as amended, the “Bankruptcy Code”): (i) authorizing the Debtor to enter into a termination and transfer agreement (the “Omnibus Termination Agreement”), a copy of which is annexed to the Supplement of Executed Agreements filed on May 6, 2015 [Docket No. 206] (the “Supplement”) pursuant to which the Debtor will surrender operating certificates or terminate program agreements comprising its portfolio of behavioral health programs (the “BH Programs”) and consent to the reissuance of such agreements to the Jewish Board for Family and Children Services (the “JBFCS”), (ii) authorizing the Debtor to enter into the triple net leases (the “Triple Net Leases”) and, with respect to 3600 Jerome Ave., the gross lease (the “Gross Lease”), for JBFCS’ use of debtor owned properties associated with BH 1 The last four digits of the Debtor’s federal tax identification number are 4000. 2 Capitalized terms not defined herein shall have the meaning ascribed to them in the Motion. Case 8-15-71074-reg Doc 254 Filed 05/29/15 Entered 05/29/15 15:43:47
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3230355v.7
UNITED STATES BANKRUPTCY COURT EASTERN DISTRICT OF NEW YORK -----------------------------------------------------------x In re:
FEDERATION EMPLOYMENT AND Chapter 11 GUIDANCE SERVICE, INC. d/b/a/ FEGS,1 Case No. 15-71074 (REG)
ORDER (A) AUTHORIZING THE TERMINATION OR SURRENDER OF OMH CLIENT PROGRAM AGREEMENTS AND OPERATING CERTIFICATES;
(B) AUTHORIZING THE ASSUMPTION AND ASSIGNMENT OF CERTAIN EXECUTORY CONTRACTS AND UNEXPIRED LEASES IN CONNECTION
WITH SUCH TRANSFERS; (C) AUTHORIZING THE LEASE OF CERTAIN OWNED PROPERTY; AND (D) RELATED RELIEF
Upon consideration of the motion (the “Motion”)2 of Federation Employment and
Guidance Service, Inc. d/b/a FEGS (“FEGS” or the “Debtor”) as a Chapter 11 debtor and
debtor-in-possession in the above referenced Chapter 11 Case, seeking entry of an order
pursuant to sections 105(a), 363 and 365 of title 11 of the United States Code (as amended,
the “Bankruptcy Code”): (i) authorizing the Debtor to enter into a termination and transfer
agreement (the “Omnibus Termination Agreement”), a copy of which is annexed to the
Supplement of Executed Agreements filed on May 6, 2015 [Docket No. 206] (the
“Supplement”) pursuant to which the Debtor will surrender operating certificates or
terminate program agreements comprising its portfolio of behavioral health programs (the
“BH Programs”) and consent to the reissuance of such agreements to the Jewish Board for
Family and Children Services (the “JBFCS”), (ii) authorizing the Debtor to enter into the
triple net leases (the “Triple Net Leases”) and, with respect to 3600 Jerome Ave., the gross
lease (the “Gross Lease”), for JBFCS’ use of debtor owned properties associated with BH
1 The last four digits of the Debtor’s federal tax identification number are 4000. 2 Capitalized terms not defined herein shall have the meaning ascribed to them in the Motion.
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Programs (each an “Ancillary Agreement” and collectively the “Ancillary Agreements”)
attached to the Supplement; (iii) approving the assumption and assignment of certain
executory contracts and unexpired leases (the “Assigned Agreements”) related to the BH
Programs as set forth on the exhibits annexed hereto, and (iv) granting related relief, all as
described more fully in the Motion; and the Court having jurisdiction to consider the Motion
and the relief requested therein in accordance with 28 U.S.C. §§ 157 and 1334; and
consideration of the Motion and the relief requested therein being a core proceeding pursuant
to 28 U.S.C. § 157(b); and venue being proper before the Court pursuant to 28 U.S.C. §§
1408 and 1409; and due and sufficient notice of the Motion, the Supplement to Exhibit C
[Docket No. 200] (the “Assigned Agreement Supplement”), the Supplement and the
hearing on the Motion having been provided to all necessary parties, including, without
limitation, all non-debtor counterparties to the Assigned Agreements, and it appearing that no
other or further notice need be provided; and a hearing having been held to consider the relief
requested in the Motion (the “Hearing”); and upon the Affidavit of Kristin Woodlock in
Support of BH Program Transfers, dated as of April 24, 2015 [Docket No. 186]; and the
Limited Objection by Donskoi Realty, LLC to Debtor’s Motion having been considered
[Docket No. 216] and upon the Debtor’s Response thereto [Docket No. 233]; and upon the
evidence adduced and the full record of the hearing and all of the proceedings before the
Court; and the Court having determined that the relief sought in the Motion is in the best
interests of the Debtor, its estate and, in accordance with its charitable mission, its clients,
and all other parties in interest, and that the legal and factual bases set forth in the Motion
establish just, good and sufficient cause for the relief granted herein; and all objections
having been resolved, overruled, or addressed by the Order; and after due deliberation and
sufficient cause appearing therefor,
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IT IS HEREBY FOUND AND DETERMINED THAT:
A. The Debtor has, to the extent necessary, satisfied (or will satisfy) the requirements
of Bankruptcy Code sections 365(b)(1) and 365(f)(2) in connection with the assumption and
assignment of the Assigned Agreements. Except as otherwise set forth in this Order, any non-
debtor counterparty to any of the Assigned Agreements that has not objected to the assumption
and assignment to JBFCS, the cure amounts (the “Cure Amounts”) and security deposit
amounts (the “FEGS Deposit”), each as set forth on the Assigned Agreement Supplement, or
that has withdrawn or otherwise resolved its objection, is deemed to have consented to the
assumption and assignment of such Assigned Agreement, the Cure Amounts and the FEGS
Deposit.
IT IS THEREFORE ORDERED, ADJUDGED AND DECREED THAT:
1. The relief requested in the Motion is hereby granted as set forth herein.
2. The Debtor may enter into the Omnibus Termination Agreement and take all
further steps necessary to effectuate the transfer of the BH Programs to JBFCS in accordance
with the Omnibus Termination Agreement and the terms of this Order.
3. The Debtor may enter into the Ancillary Agreements, and take all further steps
necessary to effectuate the leasing of the owned property to JBFCS in accordance with the
Ancillary Agreements and the terms of this Order. With regard to Dormitory Authority of the
State of New York (“DASNY”), to the extent that there is a conflict between (A) an Ancillary
Agreement, on the one hand, and (B) any provision of a mortgage or loan document held,
recorded and/or executed by DASNY, or any provision of any document issued or executed in
connection with the issuance of bonds by DASNY for the purposes of making a loan to the
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Debtor (each a “DASNY Agreement”), on the other hand, the terms of the DASNY Agreement
shall control.
4. Each of the Assigned Agreements described in Exhibit A to this Order is an
executory contract or unexpired lease of real property capable of being assumed and assigned
pursuant to section 365 of the Bankruptcy Code. The Debtor is hereby authorized, in accordance
with Bankruptcy Code sections 105 and 365, to assume and assign the Assigned Agreements,
pursuant to the Motion and the Omnibus Termination Agreement, effective as of June 1, 2015, or
such later date as the Omnibus Termination Agreement may become effective, and to take all
such steps including, without limitation, paying the Cure Amounts, which shall be in the
amounts set forth in the Assigned Agreement Supplement, and other pre-assignment expenses
associated with such transfers, if any. With respect to the Assigned Agreements described in
Exhibit B to this Order, including without limitation, those real property leases that have expired
by their terms, the Debtor is transferring to JBFCS, only that right, title and interest which the
Debtor has immediately prior to such transfer. Nothing contained in this Order shall otherwise
create, enlarge, expand, diminish or void any such right, title or interest once vested in JBFCS
(the “Vested Rights”). The leases referred to on Exhibit C to this Order are being neither
assumed and assigned nor transferred pursuant to this Order.
5. Notwithstanding anything to the contrary contained in this Order, to the extent a
purely mathematical error in any of the Cure Amounts is raised by a non-debtor party to any of
the Assigned Agreements, the Debtor is authorized, upon 5 days notice to the Committee, and
without further order of this Court, to correct such mathematical error, with any unresolved
disputes regarding the same to be resolved by this Court. JBFCS shall not be liable for any costs
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associated with any Cure Amounts, including the cost, if any, of litigating such disputes and any
additional amounts which may be required to be paid related thereto.
6. Subject to the Debtor’s payment of the respective Cure Amounts, which is
deemed to satisfy any Pre-Effective Date Lease Obligation as defined in the Omnibus
Termination Agreement, and upon assignment or transfer of the Assigned Agreements, the
Debtor shall be relieved of any and all further obligations under any such Assigned Agreement
and, consistent with this Order, the Omnibus Termination Agreement, and the Ancillary
Agreements, each non-debtor landlord party to an Assigned Agreement and JBFCS, as tenant,
shall retain and succeed to any rights, claims, defenses, remedies or interest in respect of the
Vested Rights, whether existing or arising prior to or after the date of assignment of the Assigned
Agreements, including, without limitation, any rights and defenses any landlord or tenant
(including Debtor or any occupant) may have or may have had with respect to any notice of non-
renewal that may have been served, and nothing contained in this Order shall be deemed in any
way to affect such Vested Rights (such reservation, the “Status Quo Retention”).
Notwithstanding anything in the Omnibus Termination Agreement or any of the Ancillary
Agreements to the contrary, the Debtor shall have no obligation to fund or otherwise participate,
but shall cooperate with the JBFCS for as long as practicable and at JBFCS’s expense, in any
litigation between any non-debtor third party to an Assigned Agreement and JBFCS regarding
any of the Assigned Agreements or the rights conveyed thereunder, nor shall the Debtor have
any obligation to indemnify JBFCS with respect to the outcome of any such litigation, including,
without limitation, determinations as to the existence or continuing validity of any Assigned
Agreement.
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7. The FEGS Deposit for each of the respective Assigned Agreements shall be in the
amount set forth in the Assigned Agreement Supplement, and subject only to payment of the
Cure Amount, if any, JBFCS shall pay over to the Debtor in accordance with the Omnibus
Termination Agreement an amount equal to the FEGS Deposit (such payment, the “Deposit
Payment”) and each landlord shall continue to hold the respective FEGS Deposit in trust in
connection with their respective Assigned Agreements. Notwithstanding anything to the
contrary in the Order, the FEGS Deposit shall not be reduced by the respective landlord for any
reason attributable to Debtor’s tenancy. Upon JBFCS making the Deposit Payment to the
Debtor, all residual rights to the FEGS Deposit are vested in JBFCS, and the return, if any, of
any FEGS Deposit under the terms of any Assigned Agreement shall be made to JBFCS.
8. All parties’ rights, claims and interests in any of the property being transferred,
leased and/or licensed pursuant to this Order including, without limitation, issues regarding
ownership of such property and the Debtor’s ability to sell or otherwise transfer such property,
subject to any rights conveyed pursuant to any of the Ancillary Agreements, are not, and shall
not be, impaired or otherwise affected by this Order, and shall be fully protected and preserved to
the same extent and in the same manner as existed immediately prior to the entry of this Order,
provided, however, and subject to the Debtor’s payment of the Cure Amounts, the Debtor shall
be relieved of any and all further obligations under any such Assigned Agreement. For the
avoidance of doubt, and except to the extent assigned, terminated, or, pursuant to a subsequent
order by this Court, rejected, the terms and conditions of any true equipment leases shall remain
in full force and effect, to the same extent and in the same manner as existed immediately prior
to the entry of this Order, pending further order of this Court. Notwithstanding anything to the
contrary in the Omnibus Termination Agreement or the Motion, the Debtor shall continue to be
responsible for any valid obligations under the equipment leases, including, without limitation,
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the obligation to make lease payments, if any, and to ensure that proper insurance is maintained.
Notwithstanding any “license” to use any equipment by JBFCS, each counterparty to any such
agreement may continue to invoice the Debtor and the Debtor shall continue to pay any such
amounts actually due and payable.
9. The Omnibus Termination Agreement, the Ancillary Agreements and any related
agreements, documents, or other instruments may be modified, amended, or supplemented by the
parties thereto, in a writing signed by all parties, and in accordance with the terms thereof,
without further order of this Court, provided that any such modification, amendment or
supplement does not (i) materially change the terms of such agreement, (ii) modify the express
terms of this Order, and (iii) have a material adverse effect on the Debtor’s estate, and the Debtor
shall provide reasonable advance notice of any such modification to counsel for the Creditors’
Committee, counsel to DASNY and the Office of the United States Trustee.
10. Notwithstanding anything to the contrary in the Omnibus Termination
Agreement, the Ancillary Agreements, the Assigned Agreements or the transactions
contemplated thereby, it is ordered that JBFCS, its affiliates, members, and directors and
officers, (i) are not, and are not intended to be, as a result of any action taken in connection with
this Order or JBFCS’s operation of any BH Program, a successor to the Debtor; and (ii) are not a
continuation or substantial continuation of the Debtor or any enterprise of the Debtor, including
the BH Programs.
11. As provided by Bankruptcy Rules 6004(h), 6006(d) and 7062, this Order shall be
effective and enforceable immediately upon its entry, and the transactions approved by this
Order may close immediately upon entry of this Order, notwithstanding any otherwise applicable
waiting periods.
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12. This Court shall retain jurisdiction to hear and determine all matters arising from
or related to the implementation, interpretation or enforcement of this Order. To the extent there
are any inconsistencies between the terms of this Order, the Omnibus Termination Agreement or
any of the Ancillary Agreements, the terms of this Order shall control.
____________________________Robert E. Grossman
United States Bankruptcy JudgeDated: Central Islip, New York May 29, 2015
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EXHIBIT B
THE FOLLOWING AGREEMENTS HAVE EXPIRED BY THEIR TERMS AND/OR ARE MONTH TO MONTH TENANCIES AND THE DEBTOR IS TRANSFERRING ONLY THAT RIGHT, TITLE AND INTEREST WHICH THE DEBTOR HAS IMMEDIATELY
PRIOR TO SUCH TRANSFER
Program Name Op. Cert.
# or License #
Address LL Contact Lease Date Lease Term
Lease Cure if
Any
Security Deposit
Held If Any
Bronx SAP N/A 118 West 137th Street, 2A, New York, NY, 10030
118 West 137th Street LLC, C/o Prospect Management, 199 Lee Avenue, #162, Brooklyn, NY, 11211
04/01/15 - MTM $918.55 $1,675.00
Bronx SAP N/A 118 West 137th Street, 2B, New York, NY, 10030
118 West 137th Street LLC, C/o Prospect Management,. 199 Lee Avenue, #162, Brooklyn, NY, 11211
04/01/15 - MTM $918.55 $1,675.00
Harlem SAP N/A 540 West 143rd Street, 27A, New York, NY, 10031
3480-3490 Bdwy Assoc., c/o Stellar Mgmt., 156 William Street, 10th Floor, New York, NY, 10038
03/01/15 - MTM $555.65 $1,013.77
Bronx SAP N/A 3574 Dekalb Avenue, 3K, Bronx, NY, 10467
Bronx SAP N/A 450 West 162nd Street, 52W, New York, NY, 10032
Vermilyea Partners, LLC, c/o Manor Management LLC 5114 Ft. Hamilton Parkway, Brooklyn, NY, 11219
03/01/15 - MTM $1,865.31
Harlem SAP N/A 26 Broadway Terrace, B., New York, NY, 10040
14-26 Broadway Terrace Associates, LLC, C/o BTH Holdings LLC, 1324 Lexington Avenue, Suite #245, New York, NY, 10128
04/01/13 - 03/31/15 $1,195.48
Bronx SAP N/A 210 West 133rd Street, 2B, New York, NY, 10030
210 West 133rd Street LLC, C/o Prospect Management, 199 Lee Avenue, #162, Brooklyn, NY, 11211
11/01/14 - $1,014.52 $1,850.00
Bronx SAP N/A 408 West 130th Street, 31A, New York, NY, 10027
BTG LLC, c/o Manor Management LLC, 5114 Ft. Hamilton Parkway, Brooklyn, NY, 11219
05/01/13 - 04/30/15 $1,901.90
Manhattan ATP- Administrative Office Space
6287436 270 Ft. Washington, #21, NY, NY 10032
Fort I Group LP, C/o Beach Lane Management, 111 North Central
Park Avenue, Suite 400, Hartsdale, 05/01/14 -
04/30/15 $3,000.00
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Manhattan SAP N/A NY, 10530
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EXHIBIT C
THE FOLLOWING LEASES HAVE BEEN REMOVED FROM THE SUPPLEMENT TO EXHIBIT C [DOCKET NO. 200] THESE LEASES ARE BEING NEITHER ASSUMED NOR ASSIGNED PURSUANT TO THIS ORDER
Program Name Op. Cert.
# or License #
Address LL Contact Lease Date Lease Term
Lease Cure if Any
Security Deposit Held
If Any
Hempstead Clinic
6287-104A
175 Fulton Ave, Hempstead, NY 11550
175 Hempstead, LLC, Alma Realty Corp., 31-10 37th Avenue, Suite
500, Long Island City, NY, 11101 718-267-0300
Dated as of 10/5/1994 together with those
certain amendment[s] dated as of 1/25/00 and 8/28/02 and 2/11/03 and
25 Chapel Street, Part 9th Floor, Brooklyn NY 11201
40 Flatbush Realty Associates, LLC110 West 34th StreetNY, NY 10001(212) 239-8580
Dated as of 3/22/13. 05/01/13 - 04/30/23
$7,326.45 $35,250.00
Queens/ SAP- Administrative Office
N/A
97-29 64th Road, 1st Floor, Rego Park, NY 11375
Builders Leasing Limited Liability Company c/o Estates NY Real Estate Services LLC 40 West 57th Street 23rd Floor - Commercial Finance Dept. NY, NY 10019 (718) 575-4669
Dated as of 12/27/2010
06/01/11 - 5/31/16
$7,774.00
Nassau/ Suffolk SAP- Administrative OFfice
N/A
Queens ATP- Administrative Office
6287432
Central Islip Clinic
6287-103A
320 Carleton Ave, Suite 880, Central Islip, NY 11722
Courthouse Corporate Center LLC, C/o Wen Management, 377 Oak Street, Suite 110, Garden City, NY, 11530 516-745-0150
Dated as of 4/11/2012. 10/01/12 - 09/30/19
$8,162.91 $23,273.12
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Simon Community Residence
6287438
19 Duryea Place, Brooklyn, NY 11226
Duryea Place Realty, LLC, 119-15 27th Avenue, Flushing, NY, 11354 Jack Friedman bldg mgr 917 837-9581,
Dated as of 2/11/04 together with those certain amendment[s] dated 8/1/06 and 12/12/06 and 11/25/08 and 2/28/13.
08/20/04 - 06/30/33
$113,975.00
Duryea (Young Adult) 6287070
Brooklyn ATP 6287431
Brooklyn SAP N/A
Adult Home SAP N/A
Rego Park Clinic 6287-102A
97-77 Queens Blvd, Rego Park, NY 11374
Federal Realty LP, c/o Estates NY Real Estate Services LLC, 40 West 57th Street, 23rd Floor - Commercial Finance Dept., New York, NY, 10019 718-575-4669
Dated as of 3/30/1987, together with those certain amendment[s] dated as of 3/10/1997 and 11/12/2004 and 5/21/2010 and 3/1/2014
02/05/11 - MTM $77,467.67
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Copiague Clinic 6287-003A 445 Oak Street, Copiague, NY
11726
JDJ Properties, LLC 402 Centre Island Road Oyster Bay, NY 11771 (516) 922-3706 Cal Kleinman
Dated as of 10/5/04 together with those certain amendment[s] dated 12/29/04 and Notice dated 9/11/13.
09/15/05 - 09/14/20
$83,843.75 Suffolk Care Coordination
Copiague PROS 6287-029A
Riveredge Community Residence- New Harbour/ Bridger
6287437 Building 108 Wards Island, NY,
NY 10035
NYSOMH
N/A
N/A
Riveredge Community Residence- Anchor/ Bridger 6287434
Riveredge Community Residence- Bridgehaven/ Bridger
6287435
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