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Matter of U.L. Radio Corp.

United States Bankruptcy Court for the Southern District of New York
19 B.R. 537 (1982)


In September 1979, U.L. Radio Corp. (U.L. Radio) (plaintiff) entered into a 10-year lease with Jemrock Realty Company (Jemrock) (defendant) of retail space in a primarily residential building that included a few commercial tenants. The lease provided that the premises could be used only for the sale and service of televisions and appliances. It further specified that noise coming from the premises would constitute breach. Assignment was permitted with Jemrock’s written consent, which could not be unreasonably withheld. The rent was $9,600 per year for the first three years; $10,800 for years four through six; and $12,000 for the remainder of the term. In May 1981, U.L. Radio filed a Chapter 11 petition with the intent to liquidate. It moved the bankruptcy court to approve its assumption of the Jemrock lease and assignment to Just Heaven Restaurant, Ltd. (Just Heaven). Just Heaven’s president, whose net worth exceeded $50,000, executed a personal guarantee ensuring payment of rent over the first two years of the assigned term. Just Heaven also set aside $20,000 for construction of the space, which included soundproofing. Jemrock opposed the assignment. The bankruptcy court considered U.L. Radio’s motion.

Rule of Law


Holding and Reasoning (John J. Galgay, J.)

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