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Case 20-11961-BLSDoc 87Filed 08/26/20Page 1 of 13IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWAREIn re:Chapter 11RGN-GROUP HOLDINGS, LLC, a Delawarelimited liability company, et al. 1Case No. 20-11961 (BLS)(Jointly Administered)Debtors.Hearing Date: Sept. 29, 2020 at 10:00 A.M.(ET)Objection Deadline: Sept. 9, 2020 at 4:00 P.M.(ET)DEBTORS’ MOTION FOR ENTRY OF AN ORDER(I) AUTHORIZING THE REJECTION OF A CERTAINUNEXPIRED LEASE, (II) AUTHORIZING THE ABANDONMENT OFCERTAIN PERSONAL PROPERTY, AND (III) GRANTING RELATED RELIEFPREMISES: 222 Merchandise Mart Plaza, Twelfth Floor, Chicago, IL 60654COUNTER PARTY: Merchandise Mart L.L.C.The debtors and debtors in possession (collectively, the “Debtors”) in the abovecaptioned chapter 11 cases (the “Chapter 11 Cases”), hereby move (the “Motion”) for entry of anorder, substantially in the form attached hereto as Exhibit A (the “Proposed Order”), pursuant tosections 105(a), 365, and 554 of title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (the“Bankruptcy Code”), and Rules 6006, 6007 and 9014 of the Federal Rules of BankruptcyProcedure (the “Bankruptcy Rules”), (i) authorizing the rejection of a certain unexpired lease,including any amendments, or modifications thereto (collectively, the “Lease”) which DebtorRGN-Chicago XVI, LLC (“Chicago XVI”) entered into with Merchandise Mart L.L.C.(“Landlord”) for nonresidential real property located on the 12th Floor of 222 Merchandise MartThe Debtors in these chapter 11 cases, together with the last four digits of each Debtor’s Federal EmployerIdentification Numbers (“FEIN”), where applicable are as follows: RGN-Group Holdings, LLC, RGN-NationalBusiness Centers, LLC (7723), H Work, LLC (4516), RGN-Columbus IV, LLC, RGN-Chapel Hill II, LLC, RGNChicago XVI, LLC, RGN-Fort Lauderdale III, LLC, RGN-Chevy Chase I, LLC, and RGN-Seattle XII, LLC. Theaforementioned Debtors that do not include a FEIN are disregarded entities for tax purposes and do not have FEINs.The mailing address for the Debtors is 3000 Kellway Drive, Suite 140, Carrollton, Texas 75006 (Attn: James S.Feltman, Responsible Officer).1ACTIVE.124880764.05
Case 20-11961-BLSDoc 87Filed 08/26/20Page 2 of 13Plaza, Chicago, IL 60654 (the “Premises”) effective as of August 31, 2020 (the “RejectionDate”) (ii) granting authority to take all actions necessary for the rejection, including theabandonment of the Remaining Property (as defined below), and (iii) granting related relief. Acopy of the Lease as attached hereto as Exhibit B. In support of this Motion, the Debtors relyupon the Declaration of James S. Feltman in Support of Chapter 11 Petitions and First-DayRelief (the “First-Day Declaration”) [D.I. 3]. In further support of this Motion, the Debtorsrespectfully state as follows:JURISDICTION1.The United States Bankruptcy Court for the District of Delaware (the “Court”)has jurisdiction over these cases and the Motion pursuant to 28 U.S.C. §§ 157 and 1334 and theAmended Standing Order of Reference from the United States District Court for the District ofDelaware dated as of February 29, 2012. This is a core proceeding within the meaning of 28U.S.C. § 157(b)(2).2.Venue of these chapter 11 cases and the Motion in this district is proper under 28U.S.C. §§ 1408 and 1409.3.The statutory and procedural predicates for the relief requested herein are sections105(a), 365(a), and 554(a) of the Bankruptcy Code and Bankruptcy Rules 6004, 6006, 6007 and9014.RELIEF REQUESTED4.By this Motion, the Debtors request that the Court enter the Proposed Order, (i)authorizing the rejection of the Lease which Chicago XVI entered into with Landlord for thePremises effective as of the Rejection Date, (ii) granting authority to take all actions necessaryfor the rejection, including the abandonment of any personal property or furniture, fixtures andACTIVE.124880764.052
Case 20-11961-BLSDoc 87Filed 08/26/20Page 3 of 13equipment (the “Remaining Property”) that may be located at the Premises, and (iii) grantingrelated relief.RELEVANT BACKGROUNDGeneral Background5.The Debtors are direct or indirect subsidiaries of Regus Corporation, a Delawarecorporation that, together with its affiliates (collectively, “IWG” or the “Company”), offers anetwork of on-demand office and co-working spaces, and ancillary services and support, to avariety of clients across a host of industries in over 1,000 locations in the United States andCanada.6.IWG’s business model begins with entry into long-term non-residential realproperty leases (each, a “Lease”) with property owners that provide the Company unoccupiedoffice space (the “Centers”). Based on significant market research on potential client needs inlocal markets and the unique requirements of their existing clients, IWG engineers each of theCenters to meet the architectural style, service, space, and amenity needs of those individuals,companies, and organizations who will contract for use of subportions of the Centers. IWGmarkets its Centers under an umbrella of different brand names, each tailored to appeal todifferent types of clients and those clients’ specialized needs. These clients (the “Occupants”)enter into short-term licenses (each, an “Occupancy Agreement”) to use portions of the Centers,which are customizable as to duration, configuration, services, and amenities. When operatingsuccessfully, a Center’s Occupants’ license payments (“Occupancy Fees”) will exceed thecombined cost of the underlying long-term lease, management cost, and operating expenses ofthe Center.7.The lessee on each Lease (each, a “Lease Holder”) is typically a special-purposeentity (SPE) formed for this specific purpose—including, for example, Debtors RGN-ColumbusACTIVE.124880764.053
Case 20-11961-BLSDoc 87Filed 08/26/20Page 4 of 13IV, LLC (“Columbus IV”), RGN-Chapel Hill II, LLC (“Chapel Hill II”), Chicago XVI, andRGN-Fort Lauderdale III, LLC (“Fort Lauderdale III” and, collectively with Columbus IV,Chapel Hill II, and Chicago XVI, the “SPE Debtors”). However, certain IWG entities act asLease Holder for multiple Leases—including, for example, Debtors RGN-National BusinessCenters, LLC (“RGN-National”) and H Work, LLC (“H Work”). Certain Lease Holders’obligations under their respective Leases are partially or fully guaranteed by another IWG entity,including in some cases Debtors RGN-Group Holdings, LLC (“Holdings”), RGN-National, andH Work (collectively, the “Guarantor Debtors”). 28.On July 30, August 2, August 3, and August 8 of this year, Columbus IV, ChapelHill II, Chicago XVI, and Fort Lauderdale III, respectively, each commenced with this Court avoluntary case under chapter 11 of the Bankruptcy Code.9.Each of the Debtors is a “small business debtor” as defined by section 101(51D)of the Bankruptcy Code. The Debtors have elected for subchapter V of chapter 11 of theBankruptcy Code to apply to their Chapter 11 Cases. Further, the Debtors are authorized tocontinue to operate their businesses and manage their properties as debtors in possessionpursuant to sections 1182(2) and 1184 of the Bankruptcy Code. As of the date hereof, no requestfor appointment of an official committee of unsecured creditors, a chapter 11 trustee, or anexaminer has been made.1.On July 31, 2020, the Office of the United States Trustee for the District ofDelaware (the “U.S. Trustee”) appointed Natasha Songonuga to serve as the trustee undersection 1183(a) of the Bankruptcy Code (the “Subchapter V Trustee”) for Columbus IV. The2Non-debtor Regus Plc S.A., a Bailiwick of Jersey entity headquartered in Luxembourg, isalso guarantor of certain of the Leases.ACTIVE.124880764.054
Case 20-11961-BLSDoc 87Filed 08/26/20Page 5 of 13U.S. Trustee subsequently appointed Ms. Songonuga as the Subchapter V Trustee for ChapelHill II and Chicago XVI on August 10, 2020, and for Fort Lauderdale III on August 13, 2020.The U.S. Trustee then appointed Ms. Songonuga as the Subchapter V Trustee for the GuarantorDebtors on August 21, 2020.10.On August 20, 2020, the Court entered an order [D.I. 27] authorizing the jointadministration and procedural consolidation of the chapter 11 cases pursuant to Bankruptcy Rule1015(b11.Additional information regarding the Debtors’ history and business operations,their capital structure, and the events leading up to the commencement of these Chapter 11 Casesis set forth in the First-Day Declaration.The Lease12.In the ordinary course of their business, the Debtors lease premises across theUnited States in connection with the operation of their approximately 1,000 Centers. TheDebtors do not own the real property where the Centers are located, and, instead, lease the realproperty from various lessors. In connection with their efforts to preserve and maximize thevalue of their estates, the Debtors may determine that certain burdensome Leases should berejected rather than cause the Debtors’ estates to potentially accrue expenses in the form of rentpayments for those Leases.13.Since the Petition Date the Debtors have continued to review their leases andexecutory contracts. As a result of their review, the Debtors and their advisors determined thatthe Premises are no longer needed for the Debtors’ operations. The Debtors utilized thePremises for operation of one of their Centers, which they marketed to potential Occupants.ACTIVE.124880764.055
Case 20-11961-BLS14.Doc 87Filed 08/26/20Page 6 of 13As discussed in more detail in the First-Day Declaration, each Lease HolderDebtor is party to a Franchise Agreement for Operation of Regus Business Centre (each, a“Franchise Agreement”) with non-debtor affiliate Franchise International GmbH (“Franchisor”),under which Franchisor provides certain business support services, advices, and informationtechnology to each Lease Holder Debtors. Upon termination of a Franchise Agreement, whichoccurs as a result of rejection of the Lease, Franchisor will facilitate relocation of any interestedOccupants to a different Center in IWG’s portfolio and pay to the Lease Holder Debtor apercentage of the contracted revenue of the relocated Occupants (each a “Relocation”).15.It is not economically beneficial for Chicago XVI to lease the Premises and byallowing Franchisor to facilitate Relocations, the Debtors will meet Occupants’ needs andreceive value from Franchisor for the benefit of its creditors and stakeholders.16.Therefore, as further set out below, the Debtors determined in their businessjudgment that it is in their best interests to discontinue using the Premises and reject the Lease.17.To preserve value for their estates by avoiding unnecessary rent costs, the Debtorshereby seek to reject the Lease—which comprises the nonresidential real property lease for thePremises in which the Debtors have already begun to cease operations, relocate Occupants, andremove the furniture, fixtures, and equipment (“FF&E”) leased by Chicago XVI from DebtorRGN-Group Holdings, LLC (“Holdings”).18.The Lease provides no benefit to the Debtors’ estates or these Chapter 11 Cases.By rejecting the Lease, the Debtors believe that they will save up to approximately 75,000 permonth in rent and associated costs. Absent rejection, the Debtors would be obligated to pay rentunder the Lease even though they will have ceased operations at, and will no longer be inpossession of, the Premises. Moreover, in addition to their obligations to pay rent under theACTIVE.124880764.056
Case 20-11961-BLSDoc 87Filed 08/26/20Page 7 of 13Lease, the Debtors may be obligated to pay other associated charges. Chicago XVI’s obligationsunder the lease require payment of rent and all other associated charges on the first of eachmonth, accordingly, the Debtors are requesting that this Court make rejection of the Leaseeffective as August 31, 2020, the earlier defined Rejection Date. Rejection effective as of theRejection Date will maximize the savings to the Debtors’ estates that the Debtors will realize bythis rejection.19.As of August 26, 2020, the Debtors have communicated their irrevocabledecision to reject the Lease to the landlord.20.As of August 31, 2020, the Debtors will have ceased all operations at thePremises, vacated the Premises, including relocation of all of the former Occupants of thePremises, returned key cards and codes to the Landlord, and removed all of the FF&E except anyRemaining Property.BASIS FOR RELIEFA.The Rejection of the Lease is Appropriate and Provides the Debtors with SignificantCost Savings21.Section 365(a) of the Bankruptcy Code provides that a debtor in possession,“subject to the court’s approval, may . . . reject any executory contract or unexpired lease of thedebtor.” 11 U.S.C. § 365(a). The decision to assume or reject an executory contract or unexpiredlease is a matter within the “business judgment” of the debtor. See Nat’l Labor Relations Bd. v.Bildisco & Bildisco (In re Bildisco), 682 F.2d 72, 79 (3d Cir. 1982) (“The usual test for rejectionof an executory contract is simply whether rejection would benefit the estate, the ‘businessjudgment’ test.” (citation omitted)); see also Glenstone Lodge, Inc. v. Buckhead Am. Corp. (In reBuckhead Am. Corp.), 180 B.R. 83, 88 (Bankr. D. Del. 1995). Application of the businessjudgment standard requires a court to approve a debtor’s business decision unless the decision isACTIVE.124880764.057
Case 20-11961-BLSDoc 87Filed 08/26/20Page 8 of 13the product of bad faith, whim, or caprice. See Lubrizol Enters., Inc. v. Richmond MetalFinishes, 756 F.2d 1043, 1047 (4th Cir. 1985). Further, “[t]his provision allows a trustee torelieve the bankruptcy estate of burdensome agreements which have not been completelyperformed.” Stewart Title Guar. Co. v. Old Republic Nat’l Title Ins. Co., 83 F.3d 735, 741 (5thCir. 1996) (citation omitted).22.Rejection of an unexpired lease is appropriate where such rejection would benefitthe estate. See Sharon Steel Corp. v. Nan Fuel Gas Distrib. Corp. (In re Sharon Steel Corp.), 872F.2d 36, 39–40 (3d Cir. 1989). Upon finding that a debtor has exercised its sound businessjudgment in determining that rejection of certain contracts or leases is in the best interests of itscreditors and all parties in interest, a court should approve the rejection under section 365(a).See In re Federal Mogul Global, Inc., 293 B.R. 124, 126 (D. Del. 2003); In re Bradlees Stores,Inc., 194 B.R. 555, 558 n.1 (Bankr. S.D.N.Y. 1996), appeal dismissed, 210 B.R. 506 (S.D.N.Y.1997); In re Summit Land Co., 13 B.R. 310, 315 (Bankr. D. Utah 1981) (holding that absentextraordinary circumstances, court approval of a debtors’ decision to assume or reject anexecutory contract “should be granted as a matter of course”).23.The Debtors submit that the Lease is financially burdensome and unnecessary tothe Debtors’ operations. Moreover, the Debtors have ensured that the Lease is ofinconsequential value or benefit to the Debtors’ estates and unlikely to generate any net proceedsto the estates. Accordingly, the Debtors have determined that continued performance under theLease constitutes an unnecessary depletion of value of the Debtors’ estates and, therefore,rejection of the Lease reflects the Debtors’ exercise of sound business judgment.B.Rejection of the Lease Effective as of the Rejection Date is Appropriate24.Authorizing the rejection of the Club Leases effective as of the Rejection Date isconsistent with prior rulings of courts in this and other circuits, which have held that aACTIVE.124880764.058
Case 20-11961-BLSDoc 87Filed 08/26/20Page 9 of 13bankruptcy court may authorize the retroactive rejection of a nonresidential lease if the balanceof the equities favors such retroactive rejection. See In re Chi-Chi’s, Inc., 305 B.R. 396, 399(Bankr. D. Del. 2004) (acknowledging that a bankruptcy court may approve a rejectionretroactive to the date the motion is filed after balancing the equities in the particular case); In reFleming Cos., 304 B.R. 85, 96 (Bankr. D. Del. 2003) (stating that rejection has been allowedeffective to the date of the motion or the date the premises were surrendered); see also ThinkingMachs. Corp. v. Mellon Fin. Servs. Corp. (In re Thinking Machs. Corp.), 67 F.3d 1021, 1028(1st Cir. 1995) (finding that, in the context of rejections of executory contracts, “bankruptcycourts may enter retroactive orders of approval, and should do so when the balance of equitiespreponderates in favor of such remediation”). Courts in this jurisdiction recently have authorizeddebtors to reject unexpired nonresidential leases effective to the date that the debtors filed theirpetitions for bankruptcy protection. See, e.g., In re 24 Hour Fitness Worldwide, Inc., Ch. 11Case No. 20-11558 (KBO) (Bankr D. Del. July 13, 2020); In re Forever 21, Inc., Ch. 11 CaseNo. 19-12122 (KG) (Bankr. D. Del. Oct. 28, 2019); In re Claire’s Stores, Inc., Ch. 11 Case No.18-10584 (MFW) (Bankr. D.Del. Mar. 17, 2018); In re Mac Acquisition LLC, Ch. 11 Case No.17-12224 (MFW) (Bankr. D. Del. Nov. 13, 2017); In re Marsh Supermarkets Holding, LLC, Ch.11 Case 17-11066 (BLS) (Bankr. D. Del. May 7, 2017); In re Ltd. Stores Co., Ch. 11 Case No.17-10124 (KJC) (Bankr. D. Del. Jan. 30, 2017).25.In this instance, the balance of the equities favors approval of the rejection of theLease as of the Rejection Date. Rejection of the Lease effective as of the Rejection Date willallow Chicago XVI to avoid the unnecessary economic burden of paying rent for the unusedPremises on an administrative expense basis. As of the Rejection Date, which is the day beforeACTIVE.124880764.059
Case 20-11961-BLSDoc 87Filed 08/26/20Page 10 of 13rent comes due, the Premises will be vacant, not in use by Chicago XVI or any of the formerOccupants, and will contain no FF&E of Chicago XVI except for Remaining Property.26.Additionally, approval of the rejection of the Lease as of the Rejection Date willease the economic burden to Chicago XVI of further payments on behalf of the ManagementAgreement, Equipment Lease Agreement, and Franchise Agreement, as Chicago XVI will notrequire the goods and services provided under these agreements absent an operating Center.27.Furthermore, the Landlord of the Premises will not be prejudiced by suchretroactive rejection because Chicago XVI surrendered the Premises to the Landlord on theRejection Date. In the event Chicago XVI did not surrender the Premises on or before theRejection Date, the effective date of the rejection shall be no earlier than the date Chicago XVIturned over the premises. Accordingly, the equities weigh in favor of retroactive rejection.C.The Abandonment of Personal Property Is Appropriate28.In addition, in the exercise of their sound business judgment, the Debtors maydetermine to leave certain personal property at the Premises. To the extent that the Debtors leaveany Remaining Property at the Leased Premises, the Debtors request that such RemainingProperty be deemed abandoned pursuant to section 554 of the Bankruptcy Code. Section 554(a)of the Bankruptcy Code provides that “[a]fter notice and a hearing, the trustee may abandon anyproperty of the estate that is burdensome to the estate or that is of inconsequential value andbenefit to the estate.” 11 U.S.C. § 554(a). The Debtors will have determined that the RemainingProperty to be abandoned by the Debtors is burdensome to the estates to the extent that removaland storage of this property is likely to exceed any net proceeds from the property or ofinconsequential value and benefit to the estates. See, e.g., In re Contract Research Solutions,Inc., 2013 WL 1910286, at *4 (Bankr. D. Del. May 1, 2013) (finding that abandonment ofACTIVE.124880764.0510
Case 20-11961-BLSDoc 87Filed 08/26/20Page 11 of 13property was appropriate when it posed no threat to public safety and did not contravene any lawor regulation; the debtor “need only demonstrate that [it] has exercised sound business judgmentin making the determination to abandon.”) (citation omitted).29.Courts generally give a debtor in possession great deference to its decision toabandon property. See, e.g., In re Vel Rey Props., Inc., 174 B.R. 859, 867 (Bankr. D.D.C. 1994)(“Clearly, the court should give deference to the trustee’s judgment in such matters.”). Unlesscertain property is harmful to the public, once a debtor has shown that it is burdensome or ofinconsequential value to the estate, a court should approve the abandonment. See id.30.Further, any efforts by the Debtors to move or market the Remaining Propertycould unnecessarily delay the Debtors’ surrender of the Premises and the rejection of the Lease.Accordingly, it is in the best interests of the Debtors and their estates for the Debtors to be ableto abandon Remaining Property located on the Premises. Accordingly, abandonment of theRemaining Property reflects the Debtors’ exercise of sound business judgment and is in the bestinterests of the Debtors, their estates, their creditors and other parties in interest.31.Courts in this jurisdiction have approved relief similar to the relief requestedherein. See, e.g., In re Destination Maternity Corp., No. 19-12256 (BLS) (Bankr. D. Del. Dec. 4,2019) (authorizing the Debtors to abandon personal property in connection with lease rejection);In re Forever 21, Inc., No. 19-12122 (KG) (Bankr. D. Del. Oct. 28, 2019) (same); In re ThingsRemembered, Inc., No. 19-10234 (KG) (Bankr. D. Del. Feb. 28, 2019) (same); In re CharmingCharlie Holdings, Inc., No. 17-12906 (CSS) (Bankr. D. Del. Jan. 10, 2018) (same); In re DexMedia, Inc., No. 16-11200 (KG) (Bankr. D. Del. June 8, 2016) (same). 33Because of the voluminous nature of the orders cited herein, such orders have not been attached to this Motion.Copies of these orders are available upon request to the Debtors’ proposed counsel.ACTIVE.124880764.0511
Case 20-11961-BLSDoc 87Filed 08/26/20Page 12 of 13RESERVATION OF RIGHTS32.Nothing herein or in the Proposed Order is intended or should be construed as: (a)an admission as to the validity of any claim against the Debtors and their estates; (b) a waiver ofthe rights of the Debtors and their estates to dispute any claim on any grounds; (c) a promise orrequirement to pay any claim; (d) an admission that any particular claim is of a type specified ordefined hereunder; (e) a request or authorization to assume any executory contract or unexpiredlease; or (f) a waiver of the rights of the Debtors and their estates under the Bankruptcy Code orany other applicable law, pursuant to section 365 of the Bankruptcy Code.WAIVER OF BANKRUPTCY RULE 6004(h)33.To implement the foregoing successfully, the Debtors request that the Court enteran order providing the Debtors have established cause to exclude such relief from the 14-daystay period under Bankruptcy Rule 6004(h).NOTICE34.The Debtors will provide notice of this Motion to: (i) the Office of the UnitedStates Trustee; (ii) the Subchapter V Trustee; (iii) the Debtors’ thirty (30) largest unsecuredcreditors on a consolidated basis; (iv) counsel for the Debtors’ prepetition secured lender; (v) theDelaware Secretary of State; (vi) the landlord of the Premises; (vii) all parties known to have aninterest in any Personal Property located at the Premises; and (viii) those persons who haveformally appeared in these Chapter 11 Cases and requested service pursuant to Bankruptcy Rule2002. In light of the nature of the relief requested herein, the Debtors submit that no other orfurther notice is necessary under the circumstances.[Remainder of page intentionally left blank.]ACTIVE.124880764.0512
Case 20-11961-BLSDoc 87Filed 08/26/20Page 13 of 13CONCLUSIONWHEREFORE, the Debtors respectfully request that the Court enter the Proposed Order,substantially in the forms attached hereto, granting the relief requested herein and any furtherrelief as is just and proper.Dated: Wilmington, DelawareAugust 26, 2020FAEGRE DRINKER BIDDLE & REATH LLPJames F. Conlan (admitted pro hac vice)Mike T. Gustafson (admitted pro hac vice)311 S. Wacker Drive, Suite 4300Chicago, Illinois 60606Tel.: (312) 212-6500Fax: (312) on@faegredrinker.com-and/s/ Ian J. BambrickPatrick A. Jackson (Del. Bar No. 4976)Ian J. Bambrick (Del. Bar No. 5455)222 Delaware Avenue, Suite 1410Wilmington, DE 19801Tel.: (302) 467-4200Fax: (302) ick@faegredrinker.com-andJay Jaffe (admitted pro hac vice)600 E. 96th Street, Suite 600Indianapolis, Indiana 46240Tel.: (317) 237-0300Fax: (317) 237-1000Jay.Jaffe@faegredrinker.comProposed Counsel to the Debtorsand Debtors in PossessionACTIVE.124880764.0513
Case 20-11961-BLSDoc 87-1Filed 08/26/20EXHIBIT AProposed OrderACTIVE.124880764.05Page 1 of 4
Case 20-11961-BLSDoc 87-1Filed 08/26/20Page 2 of 4IN THE UNITED STATES BANKRUPTCY COURTFOR THE DISTRICT OF DELAWAREIn re:Chapter 11RGN-GROUP HOLDINGS, LLC, a Delawarelimited liability company, et al. 1Case No. 20-11961 (BLS)(Jointly Administered)Debtors.Ref: Docket Nos.ORDER(I) AUTHORIZING THE REJECTION OF A CERTAINUNEXPIRED LEASE, (II) AUTHORIZING THE ABANDONMENT OFCERTAIN PERSONAL PROPERTY, AND (III) GRANTING RELATED RELIEFUpon the Debtor’s Motion for Entry of an Order (I) Authorizing the Rejection of aCertain Unexpired Lease, (II) Authorizing the Abandonment of Certain Personal Property, and(Iii) Granting Related Relief (the “Motion”) 2 filed by the above-captioned debtors and debtors inpossession (collectively, the “Debtors”); and upon consideration of the First-Day Declaration;and it appearing that (i) the Court has jurisdiction over these chapter 11 cases and the Motionunder 28 U.S.C. §§ 1334(b), (e)(2), and 157, and the Order of Reference, (ii) venue of thesechapter 11 cases and the Motion in this Court is proper under 28 U.S.C. §§ 1408 and 1409,(iii) the Motion is a core proceeding pursuant to 28 U.S.C. § 157(b)(2), and the Court may entera final order consistent with Article III of the United States Constitution, and (iv) notice of the1The Debtors in these chapter 11 cases, together with the last four digits of each Debtor’sFederal Employer Identification Number (“FEIN”), where applicable, are as follows:RGN-Group Holdings, LLC, RGN-National Business Centers, LLC (7723), H Work, LLC(4516), RGN-Columbus IV, LLC, RGN-Chapel Hill II, LLC, RGN-Chicago XVI, LLC, andRGN-Fort Lauderdale III, LLC. The aforementioned Debtors that do not include a FEIN aredisregarded entities for tax purposes and do not have FEINs. The mailing address for theDebtors is 3000 Kellway Drive, Suite 140, Carrollton, Texas 75006 (Attn: James S. Feltman,Responsible Officer).2Capitalized terms not otherwise defined herein have the meanings ascribed to them in theMotion.ACTIVE.124880764.05
Case 20-11961-BLSDoc 87-1Filed 08/26/20Page 3 of 4Motion was adequate and proper under the circumstances, and no other or further notice need begiven; and the Court having held a hearing to consider the relief requested in the Motion; andupon the record of the hearing and all of the proceedings had before this Court; and it appearingthat the relief requested in the Motion is in the best interests of the Debtors, their estates, theircreditors, and all other parties in interest, and that the legal and factual bases set forth in theMotion establish just cause for the relief granted herein; and after due deliberation and sufficientcause appearing therefor, it is hereby ORDERED THAT:1.The Lease is hereby rejected effective as of August 31, 2020 (the “Rejection2.With respect to the Lease, any personal property remaining at the Premises as ofDate”).the Rejection Date shall be deemed abandoned and Landlord shall be free to dispose of suchabandoned property in its sole and absolute discretion without notice or liability to the Debtors orany third parties.3.If any affected landlord or counterparty subject to this Order (the “RejectionClaimant”) asserts a claim or claims against the Debtors arising from the rejection of the Lease,such Rejection Claimant shall submit a proof of claim on or before the later of (i) the date that isthirty (30) days after entry of this Order and (ii) the general bar date established by this Court forfiling proofs of claim against the Debtors. If a Rejection Claimant does not timely file suchproof of claim, such claimant will be forever barred from asserting a claim for such rejectiondamages.4.Franchisor shall make reasonable efforts to relocate Occupants to other Centers, ifavailable, and shall remit all Novation Payments (as such term is defined in the FranchiseACTIVE.124880764.052
Case 20-11961-BLSDoc 87-1Filed 08/26/20Page 4 of 4Agreement) to the Debtor within thirty (30) business days of each such relocation for depositinto the Debtor’s debtor-in-possession account.5.The Franchisor and/or the Debtors shall provide the U.S. Trustee and theSubchapter V Trustee notice of each such relocation within business days of suchrelocation6.The Debtors are authorized to take any action necessary or appropriate toimplement the terms of this Order and the rejection without further order from this Court.7.This Court shall retain exclusive jurisdiction and power to resolve any disputearising from or related to this Order.ACTIVE.124880764.053
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U.S. Trustee subsequently appointed Ms. Songonuga as the Subchapter V Trustee for Chapel Hill II and Chicago XVI on August 10, 2020, and for Fort Lauderdale III on August 13, 2020. The U.S. Trustee then appointed Ms. Songonuga as the Subchapter V Trustee for the Guarantor Debtors on August 21, 2020. 10.
