In Re Hitz Restaurant Group

616 B.R. 374 (2020)

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Nature of the Case

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Facts

Under section 2.1 of the parties' lease agreement rent is due on the first of each month. Debtor's contractual duty to pay February 2020 rent is a pre-petition obligation; its contractual duty to pay March 2020 rent is a post-petition obligation because it arose on March 1, 2020, after the order for relief. Accordingly, § 365(d)(3) would ordinarily require full payment of the March 2020 rent and all rental payments falling due thereafter. Debtor argues that its obligation to pay any post-petition rent is excused in part by the lease's force majeure clause and by Creditor's failure to make necessary repairs to the leased premises. The clause provides: Landlord and Tenant shall each be excused from performing its obligations or undertakings provided in this Lease, in the event, but only so long as the performance of any of its obligations is prevented or delayed, retarded or hindered by. . . laws, governmental action or inaction, orders of government. . . . Lack of money shall not be grounds for Force Majeure. Debtor argues that this clause was triggered on March 16, 2020, the effective date of an executive order issued by Illinois Governor J. B. Pritzker addressing the Covid-19 pandemic in Illinois. Debtor was required to suspend service for and may not permit on-premises consumption. Debtor was encouraged to serve food and beverages so that they may be consumed off-premises, as currently permitted by law, through means such as in-house delivery, third-party delivery, drive-through, and curbside pick-up. Customers were allowed to enter the premises to purchase food or beverages for carry-out where patrons maintain adequate social distancing.