UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE … · 2021. 3. 12. · 914041 03/01/21...

{1318.001-W0064337.}

UNITED STATES BANKRUPTCY COURT DISTRICT OF DELAWARE

In re KNOTEL, INC., et al., Debtors.

Chapter 11 Case No. 21-10146 (MFW) (Jointly Administered) Hearing Date: To be Determined Objection Deadline: March 12, 2021 at 5:00 p.m. (EST) Related D.I.: 234

LIMITED OBJECTION OF DATA SALES CO., INC., TO DEBTORS’ NOTICE OF

FILING OF PROPOSED REDACTED VERSION OF NOTICE OF POTENTIAL ASSUMPTION OF EXECUTORY CONTRACTS OR UNEXPIRED LEASES AND

CURE AMOUNTS Data Sales Co., Inc. (“Data Sales”), by and through its counsel, files this Limited Objection

of Data Sales Co., Inc., to the Debtors’ Notice of Filing of Proposed Redacted Version of Notice

of Potential Assumption of Executory Contracts or Unexpired Leases and Cure Amounts [Dkt. 234]

(the “Objection”) establishing a deadline of March 12, 2021 at 5:00 pm (EST) to object to the cure

amount. In support of its objection, Data Sales states as follows:

1. The Debtors filed their chapter 11 bankruptcy petitions on January 31, 2021

(“Petition Date”) and are operating their businesses as debtors-in-possession.

2. On or about July 26, 2018, the Debtors entered into a Master Equipment Lease (the

“Master Lease”) with Data Sales pursuant to which the debtors lease substantial amounts of

hardware. A true and correct copy of the Master Lease is attached as Exhibit A.

3. The Debtors have not paid any of their post-petition obligations under the Master

Lease.

4. On February 22, 2021, the Debtors filed their Notice of Filing of Proposed Redacted

Version of Notice of Potential Assumption of Executory Contracts or Unexpired Leases and Cure

Case 21-10146-MFW Doc 429 Filed 03/12/21 Page 1 of 4

{1318.001-W0064337.} 2

Amounts [Dkt. 234] and named Data Sales as a counter party to a contract that may be assumed

and assigned with a proposed cure amount of $245,739.94, which is equal to the amounts that were

due and owing on February 1, 2021. However, the proposed cure amount does not include the

amounts that became due and owing on March 1, 2021 in the amount of $245,739.94, for a

cumulative total as of this writing of $491,479.88. A true and correct copy of Data Sales’ open

accounts receivables report for the Debtors’ account is attached hereto as Exhibit B. The Debtors’

proposed cure amount also does not include amounts that may accrue before the Master Lease is

actually assumed and assigned.

5. In order to assume an executory contract or unexpired lease, a debtor must at the

time of assumption cure all existing defaults, compensate the non-debtor party for any actual

pecuniary loss resulting from such defaults, and provide adequate assurance of future performance

under the contract or lease. 11 U.S.C. § 365(b)(1).

6. A debtor’s assumption of a contract or lease must be cum onere—including all the

conditions, liabilities, and obligations as well as the benefits of such contract or lease. See N.L.R.B.

v. Bildisco & Bildisco, 465 U.S. 513, 531 (1984) (indicating that a debtor is required to assume a

contract “cum onere”). The proper cure amount should include all liabilities and obligations that

have arisen or accrued under a contract both before and after the petition date and up to the

effective date of assumption and assignment. See 11 U.S.C. § 365(b)(1)(A) (“[i]f there has been a

default in an executory contract or unexpired lease of the debtor, the trustee may not assume such

contract or lease unless, at the time of the assumption of such contract or lease, the trustee—cures,

or provides adequate assurance that the trustee will promptly cure, such default. . . .”).

7. Data Sales objects to the Debtors’ proposed assumption and assignment of the

Contract because a cure payment of at least $491,479.88, plus all additional amounts that accrue


{1318.001-W0064337.} 3

before the Debtors assume the Master Lease (collectively, with the $491,479.88, the “Cure

Amount”), is required to cure the outstanding defaults under the Master Lease prior to assumption

by the Debtors.

8. As of the time and date of this Objection, Data Sales has not received payment for

the amounts set forth above. Accordingly, Debtors currently owe Data Sales no less than the Cure

Amount to cure all outstanding defaults under the Master Lease, plus all additional amounts that

accrue before the Debtors assume the Master Lease. The Cure Amount represents the known

amounts due and owing under the Master Lease, exclusive of any sums which have become due,

or are discovered after the date of this Objection. The Cure Amount may increase prior to any

actual date of assumption of the Master Lease.

9. Data Sales hereby objects to the Debtors’ proposed assumption and assignment of

the Master Lease absent payment of the proper Cure Amount. Furthermore, Data Sales reserves

its right to object to any sale or the assumption and assignment of the Master Lease for any other

reason, including failure to provide adequate assurance of future performance of the Master Lease.

-Continued on next page-


{1318.001-W0064337.} 4

WHEREFORE, Data Sales Co. respectfully requests that the Court enter an order requiring

the Debtors to pay the proper cure amount of at least $491,479.88 plus any additional amounts that

accrue under the Master Lease before due to Data Sales as a condition precedent to any assumption

and assignment of the Master Lease to the successful purchaser of the Debtors, and for such other

and further relief as the Court deems just and proper.

Dated: March 12, 2021 Wilmington, Delaware

LANDIS RATH & COBB LLP /s/ Nicolas E. Jenner Richard S. Cobb (No. 3157) Nicolas E. Jenner (No. 6554) 919 Market Street, Suite 1800 Wilmington, Delaware 19801 Telephone: (302) 467-4400 Facsimile: (302) 467-4450 Email: [email protected] [email protected] -and- TAFT STETTINIUS & HOLLISTER LLP Karl J. Johnson, Esq. James Jorissen, Esq. 2200 IDS Center 80 South 8th Street Minneapolis, MN 55402 Telephone: 612-977-8400 Email: [email protected] [email protected] Counsel to Data Sales Co., Inc.


Exhibit A

Case 21-10146-MFW Doc 429-1 Filed 03/12/21 Page 1 of 8








Exhibit B


Knotel Open AR as of 3-5-21

Chapter 11 BK Date 1-31-21

Invoice Date Open Age Typ Schedule

909163 02/01/21 16,186.95 32 L 10691-1

909164 02/01/21 9,075.12 32 L 10691-11

909165 02/01/21 1,066.03 32 L 10691-12

909166 02/01/21 7,936.68 32 L 10691-13

909167 02/01/21 1,066.03 32 L 10691-14

909168 02/01/21 7,343.90 32 L 10691-15

909169 02/01/21 1,203.72 32 L 10691-16

909170 02/01/21 15,722.52 32 L 10691-17

909171 02/01/21 13,724.08 32 L 10691-18

909172 02/01/21 6,570.64 32 L 10691-19

909173 02/01/21 2,565.92 32 L 10691-2

909174 02/01/21 11,043.85 32 L 10691-20

909175 02/01/21 1,203.72 32 L 10691-21

909176 02/01/21 4,953.29 32 L 10691-22

909177 02/01/21 18,770.12 32 L 10691-23

909178 02/01/21 1,069.60 32 L 10691-24

909179 02/01/21 4,579.96 32 L 10691-25

909180 02/01/21 1,711.57 32 L 10691-26

909181 02/01/21 777.45 32 L 10691-27

909182 02/01/21 38,659.15 32 L 10691-28

909183 02/01/21 1,768.36 32 L 10691-29

909184 02/01/21 14,050.18 32 L 10691-3

909185 02/01/21 1,174.97 32 L 10691-30

909186 02/01/21 3,263.08 32 L 10691-31

909187 02/01/21 1,631.88 32 L 10691-32

909188 02/01/21 2,187.58 32 L 10691-33

909189 02/01/21 1,069.92 32 L 10691-34

909190 02/01/21 10,086.88 32 L 10691-35

909191 02/01/21 1,811.23 32 L 10691-4

909192 02/01/21 3,260.23 32 L 10691-5

909193 02/01/21 1,066.03 32 L 10691-6

909194 02/01/21 16,246.85 32 L 10691-7

909195 02/01/21 10,876.73 32 L 10691-8

909196 02/01/21 12,015.72 32 L 10691-9

914018 03/01/21 16,186.95 L 10691-1

914019 03/01/21 9,075.12 L 10691-11

914020 03/01/21 1,066.03 L 10691-12

914021 03/01/21 7,936.68 L 10691-13

914022 03/01/21 1,066.03 L 10691-14

914023 03/01/21 7,343.90 L 10691-15

914024 03/01/21 1,203.72 L 10691-16

914025 03/01/21 15,722.52 L 10691-17

914026 03/01/21 13,724.08 L 10691-18

914027 03/01/21 6,570.64 L 10691-19


914028 03/01/21 2,565.92 L 10691-2

914029 03/01/21 11,043.85 L 10691-20

914030 03/01/21 1,203.72 L 10691-21

914031 03/01/21 4,953.29 L 10691-22

914032 03/01/21 18,770.12 L 10691-23

914033 03/01/21 1,069.60 L 10691-24

914034 03/01/21 4,579.96 L 10691-25

914035 03/01/21 1,711.57 L 10691-26

914036 03/01/21 777.45 L 10691-27

914037 03/01/21 38,659.15 L 10691-28

914038 03/01/21 1,768.36 L 10691-29

914039 03/01/21 14,050.18 L 10691-3

914040 03/01/21 1,174.97 L 10691-30

914041 03/01/21 3,263.08 L 10691-31

914042 03/01/21 1,631.88 L 10691-32

914043 03/01/21 2,187.58 L 10691-33

914044 03/01/21 1,069.92 L 10691-34

914045 03/01/21 10,086.88 L 10691-35

914046 03/01/21 1,811.23 L 10691-4

914047 03/01/21 3,260.23 L 10691-5

914048 03/01/21 1,066.03 L 10691-6

914049 03/01/21 16,246.85 L 10691-7

914050 03/01/21 10,876.73 L 10691-8

914051 03/01/21 12,015.72 L 10691-9

68 491,479.88


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