Property Lease “Must Be Rescinded & is Unenforceable” During the COVID-19 Mandated Shutdown Period, Alleges Player’s Poker Club LLC
May 5, 2021, Central District of California – Defendants Holfer Vineyards, LLC and Holfer Properties, LLC were recently sued by Debtor-Plaintiff Player’s Poker Club LLC under Section 105, 362, 502(b), 506(a), 510(c) of the Bankruptcy Code. The lawsuit seeks “rescission of commercial property lease” and “declaration that the lease is unenforceable” as a result of COVID-19 pandemic and related government-mandated shutdowns. Plaintiff brings “unjust enrichment,” the “frustration of purpose,” “impossibility of performance,” “breach of contract” claims against the Defendants, and seeks “declaratory relief and determination of claim” from the Court.
By way of background, Debtor-Plaintiff Player’s Poker Club LLC operates a card room in Ventura County. The Debtor had allegedly entered into a lease with the Defendants to operate its business on a certain property. The Debtor’s premises were allegedly “closed from March 2020 to March 2021” due to the COVID-19 pandemic. Allegedly, the Debtor paid a total of $790,114.83 to the Defendants towards the lease payment during the shutdown period.
On April 6, 2021, the Debtor filed for bankruptcy and elected to “rescind the leases” owing to the “frustration of purpose and impossibility of performance” caused by the COVID-19 pandemic and related government shutdown orders. Resultantly, the Debtor sought a refund of transfers made to the Defendants. Through its complaint, the Debtor seeks rescission of lease since the purpose of the lease had been allegedly frustrated under the “doctrine of force majeure.”
The Debtor urges the court to award money damages to Plaintiff and reimburse it for the rent of $790,114.83 paid for the period the Debtor was deprived of its use of the premises as contemplated in the leases. The complaint alleges that Plaintiff had “no obligation to pay rent” once the Debtor was deprived of the use of the property and that the lease would “terminate automatically” during the shutdown period and the transfers must be returned to the Debtor.
The case is In re Player’s Poker Club, Inc. in the United States Bankruptcy Court for the Central District of California under case number: 9:21-bk-10357-MB. Kogan Law Firm, APC is representing the Debtor in the bankruptcy case.