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<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"American Typewriter",serif">Client has asked about the following scenario:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"American Typewriter",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"American Typewriter",serif">Client’s has two leases (kitchen, office) and a premises operating agreement with a tenant that allow the tenant to book and hold events in Client’s event venue. All
agreements are in the same building. The tenant is in the hospitality industry and faces extremely uncertain times, with the potential of bankruptcy/closing business down. Tenant is currently in default of the operating agreement but current on both leases.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"American Typewriter",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"American Typewriter",serif">Client would like to both work with tenant and protect its interests and has asked if:<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"American Typewriter",serif"><o:p> </o:p></span></p>
<ol style="margin-top:0in" start="1" type="1">
<li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level1 lfo1"><span style="font-size:11.0pt;font-family:"American Typewriter",serif">It could enter into an agreement with T by which T agreed to transfer the kitchen equipment to client to offset
client’s losses and allow it to take over T’s events if T is forced to close/claim bankruptcy. An agreement analogous to a liquidated damages clause or secured property interest to secure T’s performance. I’m concerned this could run afoul of fraudulent transfer
rules if bankruptcy. <br>
<br>
OR<br>
<br>
<o:p></o:p></span></li><li class="MsoListParagraph" style="margin-left:0in;mso-list:l0 level1 lfo1"><span style="font-size:11.0pt;font-family:"American Typewriter",serif">Obtain a priority lien from T in exchange for a few months of grace period for T to try and weather the COVID
storm.<o:p></o:p></span></li></ol>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"American Typewriter",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"American Typewriter",serif">Would appreciate some thoughts to help the analysis.<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"American Typewriter",serif"><o:p> </o:p></span></p>
<p class="MsoNormal"><span style="font-size:11.0pt;font-family:"American Typewriter",serif">Thanks!<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Iowan Old Style Roman",serif">-- <o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Iowan Old Style Roman",serif">Anthony F. Gibbs<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Iowan Old Style Roman",serif;color:black">Attorney/Owner<br>
Felix Advocates PLLC<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Iowan Old Style Roman",serif;color:black">Phone: 206.429.5259</span><span style="font-size:10.0pt;font-family:"Iowan Old Style Roman",serif"><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Iowan Old Style Roman",serif;color:black">Fax: 206.238.9172 <br>
<a href="http://www.felixadvocates.com" target="_blank" title="http://www.felixadvocates.com"><span style="color:#0563C1">www.felixadvocates.com</span></a><u><br>
<br>
</u><b>Felix Advocates PLLC Locations</b><o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Iowan Old Style Roman",serif;color:black">1455 NW Leary Way, Ste 400, Seattle, Washington 98107<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Iowan Old Style Roman",serif;color:black">15600 Redmond Way, Ste 101, Redmond, Washington 98052<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Iowan Old Style Roman",serif;color:black">1435 W Valley Hwy N, Auburn Washington 98001-4124<o:p></o:p></span></p>
<p class="MsoNormal"><span style="font-size:10.0pt;font-family:"Iowan Old Style Roman",serif;color:black">The information contained in this electronic mail message is confidential information intended only for the use of the individual or entity named above, and
may be privileged. If the reader of this message is not the intended recipient or the employee or agent responsible to deliver it to the intended recipient, you are hereby notified that any dissemination, distribution or copying of this communication is strictly
prohibited. If you have received this message in error, please immediately notify us by telephone at 206.429.5259 and delete the original message. Thank you.<o:p></o:p></span></p>
<p class="MsoNormal"><o:p> </o:p></p>
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