In re Hitz Restaurant Group
United States Bankruptcy Court for the Northern District of Illinois
616 B.R. 374 (2020)
- Written by Tammy Boggs, JD
Facts
Kass Management Services (Kass) (plaintiff) had a lease agreement with Hitz Restaurant Group (Hitz) (defendant) for the premises of a restaurant. Rent was due on the first day of each month. The lease contained a force majeure clause that excused performance under the lease to the extent that governmental actions prevented or delayed performance. Hitz failed to make its rent payment due February 1, 2020, and filed for bankruptcy later that month. In March 2020, the governor of Illinois issued orders related to the COVID-19 pandemic, including the stoppage of in-person restaurant services until May 29, 2020. Before the bankruptcy court, Hitz argued that its obligation to pay rent after filing for bankruptcy, i.e., from March 2020 and on, was excused. Hitz pointed to the fact that as of March 16, 2020, it could not serve customers in-person while the governor’s order was in effect. Hitz conceded that it could have used its kitchen to prepare food for carry-out or delivery. The kitchen area constituted 25 percent of the leased premises.
Rule of Law
Issue
Holding and Reasoning (Cassling, J.)
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