UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF FLORIDA

MIAMI DIVISION

www.flsb.uscourts.gov

In re: 

Case No.: 21-14020-BKC-RAM

A&S ENTERTAINMENT, LLC, Chapter 11 Case

Debtor. 

__________________________/

MOTION TO DISMISS

CRSJ, Inc. (“Movant or Landlord”), by and through undersigned counsel and pursuant to 

Sections 1112(b) of the Bankruptcy Code, 11 U.S.C. § 1112(b), hereby seeks dismissal of the 

instant proceeding with prejudice and in support thereof would state as follows:

1. The Debtor commenced this proceeding by the voluntary filing of a Petition for 

Relief under Chapter 11 on April 27, 2021 (the “Petition Date”). 

2. Landlord owns the real property and improvements thereon located at 250 N.E. 

183rd Street, Miami, Florida 33179 (the “Premises”). The Debtor executed a Commercial Lease 

on March 1, 2012 with the Landlord for the use of the Premises (the “Lease”).

3. On or about July 6, 2021, Landlord filed its Proof of Claim, which included a 

Schedule of liabilities due to actions commenced against the Landlord based on the Debtor’s use 

of the leased Premises in accordance with the indemnification and hold harmless provisions in the 

Lease. [Claim 6]. Upon information and belief, and in violation of the provisions in the Lease

(Section 10) requiring liability insurance, the Debtor has never indicated coverage existed under 

any insurance policy for the claims referenced in the Schedule attached to the Proof of Claim. 

Additionally, although discovery is scheduled, at present it appears the Debtor’s current liability 

policy excludes claims for assault and battery.

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4. Landlord recently conducted 2004 Examinations of the two (2) Managers of the 

Debtor. In connection with the examinations, the Debtor produced certain documents in response 

to the corresponding duces tecum request.

5. Although not previously disclosed to the Court or creditors, the testimony revealed 

that an entity owned by Manager Jones received a $100,000 transfer in 2021. When asked about 

that entity (CL Jones Holdings, LLC), Manager Jones testified it had no involvement with the 

Debtor. The testimony of Manager Jones was even more problematic in that she indicated it was 

a “loan” repayment but also confirmed there was no note, no interest rate, and in fact no terms 

other than it would be paid when funds were available1. Manager Jones also testified she was 

aware of alleged claims of creditors, including the DOR, at the time of the above transfer from the 

Debtor to her entity. And to no surprise, Manger Jones stated the Debtor had no plans to pursue a 

claim for the return of the $100,000 transfer. Even worse, the Debtor’s sworn Statement of 

Financial Affairs states under penalty of perjury that there were no (“none”) transfers to insiders 

in the year prior to the Petition [DE 37, p.19]. The Debtor has since amended its Statement of 

Financial Affairs to reflect the prior non-disclosed transfer. The Amended Plan, however, does 

not appear to address the asset (cause of action) which remains a conflict.

6. The Debtor also testified about the existence of an undisclosed secured creditor 

with a purported lien on its liquor license that has been paid interest post-petition without Court 

approval. An excerpt of the Debtor’s General Ledger ending 7/31/21 is attached hereto as Exhibit 

“1”. Manager Jones was unable to explain why the payments were made except to say she was 

told to do so, even though she testified she is in charge of the Debtor’s operations.

 1 A copy of the transcripts from the examinations conducted on October 20, 2021 will be filed when provided to 

Movant. As such, Movant reserves the right to amend this motion accordingly.

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7. Even more interesting, is that the purported secured creditor, Douglas Stratton, is 

the Debtors’ liquor attorney per Manager Jones. No note or pledge has ever been provided, nor 

was this claim in the Debtor’s initial Plan. A copy evidencing the lien is attached here to as Exhibit 

“2”. Subsequent to the 2004 Examination, the Debtor amended its Schedules and Plan, which still 

fails to excuse the unauthorized post-petition payment or prior non-disclosure.

8. In regards to the Plan, when asked what the $17,000 monthly “Management Fee”

payment represented [DE 83], Manager Jones testified it was for her, Manager Pierre and to repay 

loans for monies used by the Debtor to fund a prior settlement with the Landlord. When pressed 

as to the “loan”, Manager Jones refused to answer other than to say there was a private lender. As 

to compensating Manager Pierre, Ms. Pierre testified her only involvement with the Debtor was 

very limited to the extent her input was requested or a signature was needed. Manager Pierre did 

not execute the Plan nor did she review any projections related thereto or perform the liquidation 

valuation in DE 83. In fact, neither representative testified they prepared the projections for the 

Plan, which counsel asserted was privileged and refused to produce [DE 96, ¶ 3].

9. The examination and prior communication also confirmed a secret sublease for a

restaurant at the Debtor’s Premises. This was only recently shared with the Landlord by way of 

an email dated September 22, 2021, attached hereto as Exhibit “3” (“Sublease”). The Landlord 

has never approved it, nor has the Court, yet SonSons Kitchen, Inc. is (or was) operating on the 

business Premises and paying the Debtor for the sublease, which the Debtor testified is prohibited 

under the Lease based on the anti-sublease provision. It is unknown if SonSons has workers 

compensation insurance, and the binder provided as to liability does not reflect the Landlord as an 

additional insured. The Debtor has now filed a Motion to in essence approve another sublease, 

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which Landlord opposes. See, DE 121. Regardless, seeking authority after the breach is not 

appropriate and subleases are a breach under the lease.

10. Based on Exhibit “3” and like communications, as well as the 2004 examinations, 

it is quite obvious the Debtor is using other professionals without discloser or approval by the 

Court. That would include attorney Elias Hilal, attorney Stratton (Exh 1 “Legal Fees”) and/or 

Perez Accounting (Compare June Balance Sheet #6650 reflecting “0” in accounting fees with July 

General Leger (Perez Accounting $900) and August General Ledger (Perez Accounting $300)),

attached as Composite Exhibits “4-A”, “4-B” and “4-C”. As evidenced by Exhibit “3”, attorney 

Elias Hilal was copied on communications from the Debtor concerning the Sublease, as well as 

virtually all communications with the Debtor concerning insurance policies and/or claims postpetition.

11. Pursuant to Section 1112(b) of the Code, the Court shall convert or dismiss for 

“cause”, whichever is in the best interest of creditors. The Code defines “cause” to include gross 

mismanagement or failure to maintain appropriate insurance that poses a risk to the estate. 11 

U.S.C. § 1112(b) Movant submits that fraud and dishonesty likewise constitute “cause”. As 

evidenced above, by all accounts cause exists to dismiss this case.

12. Indeed, cause exists due to the gross mismanagement of the Debtor due to the 

existence of undisclosed avoidable transfers with an insider, the unwillingness or inability of 

Debtor to pursue estate causes of action against insiders, conflicts of interest as to management 

and fulfilling fiduciary duties to the Debtor, and self-dealing by management under the Plan. In 

addition, there is the obvious lack of assault and battery insurance coverage, which the Debtor 

acknowledged is needed by way of its admission in Note 4, DE 117, p. 22 (a magnet for litigation).

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13. Surely, the inaccurate Statement of Financial Affairs regarding payments to 

insiders, and the conflict of interest of no avoidance action being filed as to same coupled with 

post-petition payment to a pre-petition creditor and the use (and possible payment) of professionals 

neither retained or disclosed, raises questions of dishonest conduct, no differently than gross 

mismanagement, thereby constituting further cause. This is especially true given the Debtor 

handles approximately $250K-$300K in cash a month and the persons in charge of the Debtor lack 

operational experience and have breached their fiduciary duties as set forth above.

14. In analyzing a motion under Section 1112(b) of the Code, the Court is to determine 

if conversion or dismissal is in the best interest of creditors. In doing so initially, it must be stressed 

that this Motion only seeks dismissal. That is the case because it would appear to be unfair to 

subject an estate professional such as a trustee to deal with the significant management of cash and 

the potential liability of personal injury claims based on the Debtor’s mismanagement, including 

the lack of appropriate insurance coverage for assault and battery. Moreover, given the inability 

of the Debtor to cure the Lease defaults and assume same, those defects will preclude a trustee 

from seeking assumption, so a dismissal appears to be inevitable. As such, Movant asserts 

dismissal is in the best interest of creditors.

15. 11 U.S.C. § 1112 governs the conversion or dismissal of a Chapter 11 bankruptcy 

case, and provides that the bankruptcy court must convert a Chapter 11 case to a Chapter 7 case or 

dismiss the case, whichever is in the best interests of creditors and the estate, when “cause” is 

established. If cause exists, then the court must dismiss or convert a case unless it finds and 

specifically identifies unusual circumstances; and the debtor, or any other party, establishes: (1) 

that there is a reasonable likelihood that debtor will confirm a plan within the timeframes in the 

Code or within a reasonable time; and (2) that the grounds for conversion or dismissal include an

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act or omission of the debtor for which there exists a reasonable justification and that will be cured 

within a reasonable period of time fixed by the court. 11 U.S.C. § 1112(b)(2).

16. Section 1112(b)(4) provides a non-exhaustive list of what constitutes “cause” to 

dismiss or convert a case, including: (1) substantial or continuing loss to or diminution of the 

estate and the absence of a reasonable likelihood of rehabilitation; (2) gross mismanagement of 

the estate; (3) failure to maintain appropriate insurance that poses a risk to the estate or to the 

public; (4) unauthorized use of cash collateral substantially harmful to 1 or more creditors; (5) 

failure to comply with an order of the court; (6) unexcused failure to satisfy timely any filing or 

reporting requirement established by this title or by any rule applicable to a case under this chapter;

(7) failure to attend the meeting of creditors convened under section 341(a) or an examination 

ordered under rule 2004 of the Federal Rules of Bankruptcy Procedure without good cause shown 

by the debtor; (8) failure to timely to provide information or attend meetings reasonably requested 

by the United States trustee (or the bankruptcy administrator, if any); (9) failure timely to pay taxes 

owed after the date of the order for relief or to file tax returns due after the date of the order for 

relief; (10) failure to file a disclosure statement, or to file or confirm a plan, within the time fixed 

by this title or by order of the court; (11) failure to pay any fees or charges required under chapter 

123 of title 28; (12) revocation of an order of confirmation under section 1144; (13) inability to 

effectuate substantial consummation of a confirmed plan; (14) material default by the debtor with 

respect to a confirmed plan; (15) termination of a confirmed plan by reason of the occurrence of a 

condition specified in the plan; and (16) failure of the debtor to pay any domestic support 

obligation that first becomes payable after the date of the filing of the petition.

17. Because the foregoing list is non-exhaustive, “the court is able to consider other 

factors as they arise, and to use its equitable powers to reach an appropriate result in individual 

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cases. In determining whether cause exists to dismiss a case under § 1112(b), a court must engage 

in a ‘case specific’ factual inquiry which ‘focus[es] on the circumstances of each debtor.” In re 

Intown Companies, Inc., 2017 WL 3491831, at *8 (Bankr. N.D. Fla. Apr. 14, 2017) (citations 

omitted). Thus, the determination of cause under Section 1112(b) is “subject to judicial discretion 

under the circumstances of each case.” In re Albany Partners, Ltd., 749 F.2d 670, 674 (11th Cir. 

1984).

18. Although not specifically enumerated in Section 1112(b), the Eleventh Circuit has 

recognized that a debtor’s “lack of ‘good faith’ may constitute cause” for dismissal or conversion. 

In re Daughtrey, 896 F.3d 1255, 1276 (11th Cir. 2018) (quoting In re Nat. Land Corp., 825 F.2d 

296, 297 (11th Cir. 1987)). For example, in one case from the Southern District of Florida, a 

corporate debtor’s Chapter 11 case was dismissed for lack of good faith based on the debtor’s 

payment of prepetition obligations without court authorization, execution of unauthorized postpetition financing arrangements, and diversion of assets to provide inventory for a new company 

owned partially by debtor's principal. In re 239 Worth Ave. Corp., 236 B.R. 492, 493 (Bankr. S.D. 

Fla. 1999). In rendering its decision, the court held that “[w]hen a debtor fails to comply with the 

terms of the Bankruptcy Code and continues to operate in disregard to its creditors' interests, a 

court has no alternative other than to dismiss the case.” Id.

19. For the reasons stated above, cause exists under Section 1112 to dismiss the case. 

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WHEREFORE, Movant seeks the entry of an Order dismissing this case, and for such other 

relief as may be just and proper.

Respectfully Submitted,

DICKINSON WRIGHT PLLC

/s/Alan J. Perlman, Esq.

Alan J. Perlman, Esq.

Florida Bar No: 826006

350 East Las Olas Boulevard, Suite 1750

Fort Lauderdale, Florida 33301

Phone: 954-991-5427

Fax: 844-670-6009

aperlman@dickinsonwright.com

CERTIFICATE OF SERVICE 

I HEREBY CERTIFY that on November 10, 2021, a copy of the foregoing was 

electronically filed with the Court using the CM/ECF system, which sent notification to all parties 

of interest who are participating in the CM/ECF system.

Moffa & Bierman

Bankruptcy Counsel for the Debtor

3081 E Commercial Blvd., Suite 204

Fort Lauderdale, FL 33308

Telephone 954-634-4733

Fax 954-337-0637

Email john@moffa.law

allusers@moffa.law

Attorney for Debtor

Steven D Schneiderman

Office of the US Trustee

51 SW 1 Ave #1204

Miami, FL 33130

Telephone (305) 536-7285

Fax : (305) 536-7360

Email: Steven.D.Schneiderman@usdoj.gov

Attorney U.S. Trustee

/s/Alan J. Perlman, Esq.

Alan J. Perlman, Esq.

4890-9551-5905 v1 [97108-1]

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