MIAMI 6601122.3 84482/88966 

UNITED STATED BANKRUPTCY COURT 

SOUTHERN DISTRICT OF FLORIDA 

FT. LAUDERDALE DIVISION 

www.flsb.uscourts.gov

In re: 

SEVEN STARS ON THE HUDSON CORP. 

 

Debtor, 

_______________________________________/

Case No.: 19-17544-SMG 

Chapter 11 

OBJECTION OF MDG POWERLINE HOLDINGS, LLC TO DEBTOR'S MOTION TO 

ASSUME UNEXPIRED LEASE OF NONRESIDENTIAL PROPERTY 

 

MDG Powerline Holdings, LLC ("Landlord"), by and through undersigned counsel, 

objects to the Debtor's Corrected Motion to Assume Unexpired Lease of Nonresidential Property 

Pursuant to Bankruptcy Code § 365(a)(d)(4)1

 [ECF No. 129] (the "Motion"). 

PRELIMINARY STATEMENT 

By the Motion, Debtor seeks to assume the pre-petition lease it entered into with 

Landlord on or about November 23, 2015 (the "Lease"),2 "subject to the outcome of the 

Adversary Proceeding." It is not clear what relief Debtor actually seeks by inclusion of the 

phrase "subject to" in its Motion, but regardless, for the reasons set forth below, the Lease cannot 

be assumed by Debtor and, therefore, the Motion must be denied and the Lease should be 

deemed rejected. 

Under the Lease, Debtor agreed to lease approximately 18,600 square feet at Landlord's 

premises (the "Premises") for ten years for the operation of a trampoline park and family fun 

center under the trade name "Rockin' Jump". Until very recently, Debtor has operated under the 

 

1

 Section 365(a)(d)(4) does not exist within the Bankruptcy Code. For purposes of this Objection, Landlord assumes 

Debtor is seeking relief under § 365(a) of the Bankruptcy Code. Section 365(d)(4) sets forth the time frame by 

which Debtor must seek assumption or rejection of an unexpired lease of nonresidential real property under which it 

is the lessee. 

2

 A copy of the Lease, as amended, is attached to this Objection as Composite Exhibit A. 

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DBA of Rockin' Jump, as set forth in Debtor's voluntary petition [ECF No. 1, p.1].3

 That is not 

surprising, as the Lease expressly requires that Debtor operate as a Rockin' Jump franchise as a 

material and critical term of the Lease. 

On April 16, 2020, the Court entered its Order (i) Granting Debtor's Motion to Approve 

Settlement Agreement with Rocking' Jump, LLC and Rockin' Jump Franchise, LLC and (ii) 

Canceling Status Conference [ECF No. 161] (the "Rockin' Jump Settlement Order"). Paragraph 

5 of such Order provides that the Rockin' Jump franchise agreement is deemed rejected by the 

Debtor pursuant to section 365 of the Bankruptcy Code. Thus, despite the express requirement 

to do so, Debtor is no longer operating as a Rockin' Jump franchise. For that reason alone, the 

Motion must be denied. 

In addition, as explained below, Debtor's ability to perform under the Lease (and to meet 

its administrative obligations) has not been demonstrated and is in serious doubt. Since the fall 

of 2019, the large majority of its sales have been generated by "advance sales" or Groupon-like 

discounts. Moreover, Debtor currently is not operating as a result of COVID-19. 

Accordingly, Landlord respectfully requests that this Court deny the Motion and order 

the rejection of the Lease. 

BACKGROUND 

The Lease 

1. Landlord and Debtor entered into the Lease on or about November 23, 2015. 

Under the Lease, Debtor agreed that it would be required to, and could only, operate as a 

"Rockin' Jump" franchise. See Ex. A, p. 1 and Section 6.01 (emphasis added). 

 

3

 See Application for Registration of Fictitious Name filed by Debtor to register "Rockin' Jump Fort Lauderdale", 

attached as Exhibit B. 

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2. The initial term of the Lease is for ten years. See Ex. A., p.1 and Section 2.03. 

Subject to separate obligations for taxes, utilities and operating expenses, the initial annual rent 

under the Lease was $340,000 through the end of the fifth year, at which time the annual rent 

payment would increase in accordance with the terms of the Lease. See Ex. A, pp. 1-2. 

3. Pursuant to Section 6.01 of the Lease, Debtor is only permitted to use the 

Premises "for the purposes and under the trade name(s) specified in the Basic Lease 

Provisions, and for no other purposes and under no other trade name whatsoever . . ." (emphasis 

added). As stated above, the "Basic Lease Provisions" require that the Premises be operated as a 

"Rockin' Jump" trampoline center. 

4. The obligations under the Lease are guaranteed by Jens Berding and Eddy 

Manzo-Berding (collectively, "Guarantors") pursuant to separate Lease Guaranty agreements 

entered into at the time of the Lease (the "Guaranty").4

5. Debtor has failed to make its monthly payment due to Landlord under the Lease 

for April 2020. 

The Franchise Agreement 

6. On or about December 15, 2014, Rockin' Jump, LLC ("Franchisor") and Five 

Stars on the Hudson, LLC (the "Five Stars LLC") entered into a Franchise Agreement with the 

purpose to operate a trampoline park (the "Franchise Agreement"). See Ex. A attached to ECF 

No. 39. On or about December 7, 2015, Franchisor consented to the assignment of such 

Franchise Agreement by Five Stars LLC to Debtor. See Ex. B attached to ECF No. 39. 

 

4

 Copies of the Lease Guaranty agreements are attached as Exhibits D and E to the Lease. 

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7. On August 5, 2019, Franchisor filed its Motion for an Order Granting Relief 

From the Automatic Stay Pursuant to 11 U.S.C. § 362(d)(1) [ECF No. 39] (the "Stay Relief 

Motion") seeking authority to terminate the Franchise Agreement with Debtor and to terminate 

insurance policies provided to Debtor by Franchisor. 

8. As alleged by Franchisor in the Stay Relief Motion, pre-petition, Debtor was in 

default of its obligations under the Franchise Agreement for failure to pay royalties and 

advertising fees under the Franchise Agreement and for unpaid insurance premiums. 

9. On April 16, 2020, the Court entered the Rockin' Jump Settlement Order, 

pursuant to which, among other things, the Franchise Agreement was expressly rejected by 

Debtor. 

ARGUMENT 

Debtor Cannot Cure Current Defaults 

10. Pursuant to section 365(a) of the Bankruptcy Code, subject to subsections (b), (c), 

and (d) of such section, a debtor may assume an unexpired, non-residential real estate lease. 

11. However, the right to assume an unexpired, non-residential real estate lease is not 

unlimited and a debtor must provide certain protections in favor of a landlord. A debtor may not 

assume an unexpired, non-residential real estate lease unless it (a) cures, or provides adequate 

assurance that it will promptly cure, any defaults under the Lease; (b) compensates, or provides 

adequate assurance of prompt compensation, to Landlord for any actual pecuniary loss to 

Landlord resulting from any defaults; and (c) provides adequate assurance of future performance 

under the Lease. See 11 U.S.C. § 365(b)(1). 

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12. "Curing a default" means that the existing event of default is remedied and the 

consequences thereof are nullified. In re Johnson, 29 B.R. 104, 105 (Bkrtcy.S.D.Fla.1983) (citing 

In re Taddeo, 685 F.2d 24, 27 (2nd Cir. 1982)) (disagreed with on different grounds by In re 

Pfleiderer, 75 B.R. 363 (Bkrtcy.S.D.Fla.1987)). A debtor must cure defaults in accordance with 

the applicable underlying contract or agreement, so long as that document complies with relevant 

non-bankruptcy law. In re Sagamore Partners, Ltd., 620 Fed. Appx. 864, 869 (11th Cir. 2015). 

13. The purpose of requiring a debtor to first cure any defaults as a prerequisite to 

assuming a previously defaulted contract is to put the parties back in the positions they would 

have been in had no defaults occurred and no bankruptcy petition had been filed. See In re Fifth 

Taste Concepts Las Olas, LLC, 325 B.R. 42, 49 (Bkrtcy.S.D.Fla.2005). Section 365(b)(1) 

applies to monetary and non-monetary defaults and obligations. See e.g. In re Chapin Revenue 

Cycle Management, LLC, 343 B.R. 728 (Bkrtcpy.M.D.Fla.2006), In re Texas Health Enterprises, 

Inc., 246 B.R. 832, 843 (Bankr. E.D. Tex. 2000), In re Carterhousel, Inc., 94 B.R. 271, 273 

(Bankr.D.Conn.1988). 

14. Here, there are both monetary and non-monetary defaults. As stated above, 

Debtor failed to pay April rent due to Landlord under the Lease. 

15. More importantly, as it relates to the pending Motion, Debtor is in default under 

the Lease because it no longer operates as a Rockin' Jump franchise. The Rockin' Jump 

Settlement Order made it crystal clear that the Franchise Agreement between Debtor and 

Franchisor is rejected as of April 16, 2020. Thus, put simply, Debtor cannot provide any 

"adequate assurance" to Landlord of either its ability to cure its current failure of operating as a 

Rockin' Jump location or its future performance of the franchise obligation under the 

Lease. Thus, Debtor cannot assume the Lease pursuant to section 365(b)(1). 

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Debtor Cannot Provide Adequate Assurance of Future Performance 

16. Separate from Debtor's failure to operate as a Rockin' Jump franchise, Debtor has 

failed to provide adequate assurance of future performance under the Lease. See 11. U.S.C. 

§365(b)(1)(C). 

17. Currently, Debtor is operating under a consensual cash collateral order with Wells 

Fargo Bank, pursuant to which it is making minimal monthly adequate protection interest-only 

payments. However, upon an exit from bankruptcy, if any, that obligation owed to Wells Fargo 

will need to be addressed. 

18. In addition, as Debtor's monthly operating reports amply demonstrate, throughout 

this case, even with the limited interest-only adequate protection payments made to Wells Fargo 

and with the benefit of advance sales through Groupon and other aggregators, Debtor has not 

built up excess cash. Landlord is also aware that some portion (which may be a substantial 

portion) of sales generated during the fall and holiday seasons in 2019 and early 2020 were 

accomplished through "advance sales" that allowed patrons to pay currently for future rights to 

enter the Premises. 

19. Most recently, since mid-March 2020, Debtor has ceased operations at the 

Premises pursuant to executive orders issued by Broward County, Florida and Governor Ron 

DeSantis. When, and to what extent, Debtor's operations at the Premises will re-open is 

unknown. As Debtor has stated at prior hearings in this case, Guarantors have leveraged all of 

their personal assets, including their home, to invest into Debtor's business. 

20. It is Debtor's burden to demonstrate that there is adequate assurance of future 

performance under the Lease. See 11 U.S.C. § 365(b)(1)(C). Debtor has not done so and in fact 

cannot do so. Accordingly, for this reason, too, the Motion must be denied. 

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WHEREFORE, Landlord respectfully requests that this Court (a) deny the Motion and 

order that the Lease is deemed rejected, as the reasons for the denial of the Motion cannot be 

overcome by Debtor and (b) grant such other relief as the Court deems just and appropriate. 

Dated: April 27, 2020 

 Respectfully submitted, 

 BILZIN SUMBERG BAENA 

PRICE & AXELROD LLP 

 Counsel for MDG Powerline Holdings, LLC 

 1450 Brickell Avenue, 23rd Floor 

 Miami, Florida 33131 

 (305) 374-7580 

 

 By: /s/ Jay M. Sakalo 

 Jay M. Sakalo 

 Fla. Bar No. 156310 

 

 

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CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that a true and correct copy of the foregoing was served via 

CM/ECF Notice of Electronic Filing to all Parties appearing in this case who are registered to 

receive electronic noticing in this case via CM/ECF on this 27th day of April, 2020. 

 By: /s/ Jay M. Sakalo 

 Jay M. Sakalo 

 

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EXHIBIT A

Copy of Lease 

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EXHIBIT B

d/b/a Rockin' Jump 

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