Our firm receives a significant number of cases against restaurants, whether for unpaid food suppliers, breaches of leases for industrial kitchen equipment, past due linen or cleaning product vendor invoices (Remember, “Ocean Breeze Soap”?), or unpaid commercial rental arrears (Remember “TJI Cobra-Kai”?).
We were referred a case for unpaid commercial rent against a national restaurant chain that I will refer to as “Red Chix”, for a specific location right here in Gotham City. While Red Chix can do well in many parts of the country, we here in Gotham truly have great food everywhere we turn, and thus, halfway-decent comfort food doesn’t necessarily outweigh the sheer options of various ethnic and gourmet foods that one can find in Gotham City, merely just by walking to the next corner.
Unfortunately, Red Chix had to close this location, and literally abandoned the shop, without any notice. No eviction was necessary, so we obtained a judgment for about $120,000 in rental arrears. Further unfortunately for us, Red Chix did a lot of things right. Each chain location is independently owned, so we couldn’t impute liability on the corporate parent or other affiliates. Additionally, there was no personal guarantee.
My judgment enforcement team noted that there were no banks left with any funds, no assets left at the location, and no leviable assets. The client, along with most of my staff, were severely concerned that the matter would be uncollectible. In fact, I moved onto other files, not really giving this case much more thought. I headed back to my office, and before long, I lost track of time. I realized I’d skipped lunch, so I tried to consider my options. Too much work to go find some take out, nothing good saved up in the office freezer. But I could easy hop online and order something to be delivered via Grubdash. And then it occurred to me!
Did Red Chix have a Grubdash account? Or maybe an Ubur Chow account? Or Door Eats? I quickly performed some quick internet searches, and didn’t locate any Red Chix accounts on any of the food delivery services, but maybe it was worth a shot! We immediately served subpoenas on all the food delivery services as a non-party garnishee. To our luck, about three weeks later, Grubdash responded, and advised that they were holding over $300,000 in unpaid amounts due to Red Chix! The bad news, there were four other judgment creditors, one with a secured UCC filing for equipment.
Grubdash’s attorney decided to email all the attorneys and all the marshals, with the four competing judgment creditor claims, and basically said to us all “You figure it out”.
Cue the massive flurry of emails, none of which were BCC’d. One of the other creditors suggested that we split the $300K pro rata. Another said that because of the UCC filing, they took priority. The third said that since their marshal already filed their execution, they got dibs. Of course, there wasn’t enough money to cover all the creditors.
I waited for the deluge to die down, and I came in with an email explaining that: 1. Our judgment was the first one entered, and therefore, our secured interested was filed prior to the UCC claim; 2. our marshal actually filed the execution first; 3. There was no basis to any pro rata proposal. Quite simply, our judgment was to be satisfied in full, and after that, I didn’t much care what happened to the remainder. Of course, I cited all the applicable statutes and evidence to demonstrate the timeline.
We received two responses. The first was from Grubdash, saying “Yes, in light of Mr. Wan’s email and information, we will be remitting to satisfy his client’s judgment first.”
The second was from one of the judgment creditors attorney, admitting that I was right, and stated, “Well, of course, once you bring facts and law into this.”
