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IN THE UNITED STATES BANKRUPTCY COURT 

FOR THE EASTERN DISTRICT OF VIRGINIA 

IN RE: * 

 * 

STONE’S COVE KITBAR OF * Case No. 17-10066-BFK 

 BEL AIR, LLC * Chapter 7 

 * 

 Debtor * 

 * 

 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 

 * 

McGILL DEVELOPMENT LIMITED * 

 PARTNERSHIP NO. 3 * 

 * 

 Movant * 

v. * 

 * 

STONE’S COVE KITBAR OF * 

 BEL AIR, LLC * 

and * 

H. JASON GOLD, TRUSTEE * 

 * 

 Respondents * 

 * 

 * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * 

MOTION FOR RELIEF FROM STAY 

AND MEMORANDUM OF POINTS AND AUTHORITIES 

(WITH RESPECT TO LEASE AGREEMENT BETWEEN 

McGILL DEVELOPMENT LIMITED PARTNERSHIP NO. 3, 

LANDLORD, AND STONE’S COVE KITBAR OF BELAIR, LLC, TENANT 

McGill Development Limited Partnership No. 3, Movant, by its undersigned 

attorneys, moves this Court to lift the automatic stay to allow the Movant to terminate the 

Bel Air Town Center Retail Lease between McGill Development Limited Partnership No. 

3, as landlord, and Stone’s Cove KitBar of Bel Air, LLC, as tenant, and to exercise its 

state law and contractual rights to terminate the Lease and regain possession of the 

Leased Premises, and respectfully represents: 

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Background 

1. On January 6, 2017 (the “Petition Date”), Stone’s Cove Kitbar of Bel Air, 

LLC, the Debtor, filed a voluntary petition for relief in this court under Chapter 7 of Title 

11 of the United States Code. 

2. H. Jason Gold (the “Chapter 7 Trustee”) was duly appointed and continues 

to serve as the Chapter 7 trustee. 

3. This court has jurisdiction over the parties and over the issues raised by this 

Motion, in accordance with 28 U.S.C. §§ 157 and 1334, and in accordance with 11 U.S.C. 

§ 105 and 362. This is a civil core proceeding arising under, or arising in or related to a 

case under, Title 11 of the United States Code, by which the Movant seeks to terminate 

the Lease between the parties, in which the estate of the Debtor also holds an interest, 

and to regain possession of the Leased Premises. 

The Lease 

4. On or about July 29, 2014, McGill Development Limited Partnership No. 3 

(“McGill”), as landlord, and Stone’s Cove Kitbar of Bel Air, LLC (the “Debtor”), as tenant, 

entered into a Lease Agreement (the “Lease”) whereby the Debtor agreed to lease 

approximately 5,500 square feet of space located in that commercial shopping center 

known as Bel Air Town Center, located at 588 Baltimore Pike, Bel Air, Maryland 21014 

(the “Leased Premises”) to operate a full service KitBar restaurant under the name of 

“Stone’s Cove KitBar”. A copy of the Lease is attached and marked as Exhibit 1 and 

incorporated by reference. 

5. The Lease commenced on April 25, 2016. The Lease provides for an initial 

term of ten years, with the option for two renewals of five years each. The Lease provides 

for the payment of minimum rent due as follows: Zero dollars ($0.00) for the first rental 

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year (through April 30, 2017); $6,875.00 per month for the 13th through the 84th month of 

the Lease (through April 30, 2023), and then $9,166.67 per month for the balance of the 

Lease (through April 30, 2026). In addition to the minimum rent due, the Debtor is required 

to pay McGill, as percentage rent, an amount equal to the amount by which five percent 

of the gross sales made each rental year exceed the minimum rental paid, to be 

determined on a quarterly basis. 

6. For the initial year of the Lease, which concludes on April 30, 2017, the 

Debtor was not required to pay any minimum rent, just percentage rent, if applicable. 

Based upon the Debtor’s gross sales for the period from April 25, 2016 through July 31, 

2016, the Debtor paid $5,000.28 to McGill as percentage rent. Based upon the Debtor’s 

gross sales for the period from August 1, 2016 through October 31, 2016, the Debtor was 

not required to pay percentage rent to McGill. To date, the Debtor has not provided the 

report required under the Lease to determine the amount of percentage rent due for the 

period from November 1, 2016 through January 6, 2017, and McGill is unable to ascertain 

if any additional percentage rent is due. 

7. The Lease also requires the Debtor to pay to McGill its proportionate share 

of common area and maintenance fees, taxes and insurance as additional monthly rent. 

The January, 2017 fees have not been paid and $3,817.92 is due and owing to McGill on 

account of this additional rent. 

8. The Debtor’s Statement of Financial Affairs reflects that on January 5, 2017, 

one day before the Petition Date, the Debtor sold “all assets” to Minuteman Capital, LLC 

for the sum of $25,000.00. No further information was provided to determine what assets 

were sold or how the value of the assets were determined. Further, the Debtor’s 

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schedules reflect that its cash and bank accounts totaled “0” on the Petition Date, one 

day later, without any accounting for the $25,000.00 received1. 

9. Since the Petition Date, some party has continued to operate a restaurant 

from the Leased Premises. Upon information and belief, the party operating from the 

Leased Premises is not the Debtor, as the Debtor’s Schedule G reflects the Lease was 

“abandoned by Debtor,” and the party operating is not the Chapter 7 Trustee, who has 

advised counsel that he has not sought approval to operate the business. McGill believes 

that Minuteman Capital, LLC or a related party (collectively “Minuteman”) has operated 

the restaurant since the Petition Date and continues to operate from the Leased Premises 

and may be using the trade name and liquor license of the Debtor for its operations. 

Further, McGill has been advised that Minuteman is applying to Harford County Liquor 

Board to have the liquor license of the Debtor transferred to a third party. 

10. Cause exists to lift the automatic stay to allow McGill to terminate the lease 

and to proceed with its state law and contractual remedies to regain possession of the 

Leased Premises for the following reasons: 

 a. The Leased Premises is being operated as a restaurant by a third 

party that is not the Debtor, that is not authorized by the Trustee, and that is not authorized 

by McGill. Absent relief from the automatic stay, McGill cannot proceed to evict the 

unauthorized occupant from the Leased Premises. The continued use of the Leased 

Premises by the unauthorized occupant creates a risk to McGill and the bankruptcy 

estate. Every time the unauthorized occupant opens the restaurant and allows patrons to 

 1 The only reference in the papers filed by the Debtor to the monies paid after the sale was in the 

Statement of Financial Affairs, where it indicated a payment to JPS Law, PLLC in the amount of $14,500.00 

on 1/6/17 for “services”. There was nothing to indicate whether this payment was for antecedent debt, 

current services, or future services. 

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enter, there is a possibility of personal injury or other damages that could be asserted 

against McGill, as Landlord, or the bankruptcy estate, as the Tenant. Further, it is unlikely 

that the unauthorized occupant has obtained liability insurance as it does not have an 

insurable interest in the Leased Premises. 

 b. The Lease is in default, in that prepetition rents are due for the 

monthly CAM, taxes and insurance, and the Debtor has failed to provide the accounting 

required under the Lease to determine the amount of the prepetition percentage rent due. 

The Lease is in default, as the operations of the Debtor have ceased in violation of the 

provision that requires that the Debtor remain open for a minimum of eight hours per day, 

which has an adverse effect for the Lease as rents based upon a percentage of gross 

sales. 

11. Further, cause exists to lift the automatic stay in that the Bankruptcy Estate 

is unable to provide the Movant with adequate protection as called for in 11 U.S.C. § 365. 

Section 365(d)(3) pertains to non-residential leases and provides as follows: 

3) The trustee shall timely perform all the obligations of the debtor, 

except those specified in section 365(b)(2), arising from and after the order 

for relief under any unexpired lease of nonresidential real property, until 

such lease is assumed or rejected, notwithstanding section 503(b)(1) of 

this title. The court may extend, for cause, the time for performance of any 

such obligation that arises within 60 days after the date of the order for 

relief, but the time for performance shall not be extended beyond such 60-

day period. This subsection shall not be deemed to affect the trustee's 

obligations under the provisions of subsection (b) or (0 of this section. 

Acceptance of any such performance does not constitute waiver or 

relinquishment of the lessor's rights under such lease or under this title. 

12. In the instant case, the Lease requires the Debtor, and therefore the 

Bankruptcy Estate, to operate its business each day for at least an eight hour period. Since 

the Debtor ceased operations prior to the Petition Date and since the Bankruptcy Estate 

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is incapable of operating the business of the Debtor as required by section 365(d)(3), the 

Bankruptcy Estate in in breach of the its duties to McGill. Section 365(b)(2) has no 

application to the instant case. Given these facts, McGill's only remedy provided under the 

code is to request that the stay be lifted in order to terminate the Lease and regain 

possession of the Leased Premises. 

13. Further, as indicated above, the Debtor's schedules reflect that at the time 

of the filing, the Debtor did not have general liability insurance, nor do the schedules 

indicate that the Bankruptcy Estate has the financial resources to acquire the requisite 

insurance coverage. The absence of insurance places an added burden on McGill that 

was not contemplated by section 365 and, once again, the only remedy available to 

McGill is to request that the stay be lifted in order to terminate the Lease and regain 

possession of the Leased Premises. 

14. Finally, given that the schedules filed by the Debtor show that the 

Bankruptcy Estate has no assets, and the Affidavit of McGill that the Lease is abovemarket, the Bankruptcy Estate will be unable to satisfy the provisions of 11 U.S.C. 

§365(b)(2) that require it to cure defaults under the Lease, compensate McGill for its 

pecuniary losses, and provide adequate protection of future performance. 

15. Given the failure of the Bankruptcy Estate to protect the interests of McGill 

and the immediate threat caused by the unauthorized occupant in the Leased Premises, 

the exigent facts support the entry of an order authorizing the stay to be lifted to allow 

McGill to terminate the Lease and assert its contractual and state court remedies to 

regain possession of the Leased Premises. 

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16. Pursuant to Local Rule 9013(G), McGill does not intend to file a separate 

memorandum of points and authorities and will rely solely upon the factual and legal 

matters set forth herein. 

WHEREFORE, McGill Development Limited Partnership No. 3 prays the entry of 

an order: 

a. Lifting the automatic stay to allow it to proceed with its contractual and 

state law remedies, including the termination of the Lease and the eviction of the current 

occupant of the Leased Premises, and 

b. For such other and further relief as this court finds appropriate. 

Dated: January 27, 2017 /s/ Madeline A. Trainor 

 Madeline A. Trainor VSB# 18531 

 REDMON, PAYTON & BRASWELL, LLP 

 510 King Street, Suite 200 

 Alexandria, VA 22314 

 (703) 684-2000 

 Attorneys for the Movant 

CERTIFICATE OF SERVICE 

 I hereby certify that on this 27th day of January, 2017, a copy of the foregoing 

Motion was mailed by first class mail, postage prepaid, to: 

Stone’s Cover Kitbar of Bel Air, LLC 

10207 East Hunter Valley Road 

Vienna, VA 22181 

 And by ECF, as permitted by the Local Rules and Standing Orders of this Court 

to: 

Gregory H. Counts, Esquire 

Tyler, Bartl, Ramsdell & Counts, PLC 

300 N. Washington Street 

Suite 202 

Alexandria, VA 22314-4252 

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H. Jason Gold, Chapter 7 Trustee 

Nelson Mullins Riley & Scarborough LLP 

101 Constitution Avenue NW 

Suite 90 

Washington, DC 20001 

Office of the U.S. Trustee, Region 4 

115 S. Union Street, Suite 210 

Alexandria, VA 22314 

 /s/ Madeline A. Trainor 

 Madeline A. Trainor 

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