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The court denied Old Market Group’s request to stay discovery and trial while it pursued an interlocutory appeal over 400 Walnut Avenue LLC’s repair-related cure claim tied to the former Fairway warehouse lease. The fight stems from the December 13 ruling that preserved the landlord’s claim after the court rejected Old Market’s threshold arguments that Village Super Market, as buyer and lease assignee, should bear the pre-sale repair obligations or that no Section 365 default existed without formal pre-objection notice source filing. Old Market’s appeal papers framed the exposure as more than $2.3 million in cure costs and challenged whether Section 365 requires curing obligations that had not yet ripened into a lease default source filing.
The stay ruling keeps the claim litigation moving instead of letting Old Market defer the dispute while the appeal proceeds. The court found Old Market had not shown irreparable harm, that a stay would prejudice 400 Walnut and Village, that Old Market’s likelihood of success was “extremely low,” and that the public interest favored resolving a dispute that had been pending for years source filing. For the wind-down estate, the ruling preserves a live post-confirmation claims fight over escrowed cure funds rather than converting the appeal into a pause button.
Old Market Group Holdings Corp., then Fairway Group Holdings Corp., filed Chapter 11 on January 23, 2020 with a fast sale strategy for the New York-area specialty grocer. The debtors operated 14 supermarkets across New York, New Jersey and Connecticut, employed more than 3,000 people, and said roughly 83% of employees were union-represented; management reported about $643.3 million of revenue, a $65.8 million net loss, $158.9 million of assets and $288.7 million of liabilities for the 12 months ended November 2019 source filing source filing. The case opened with up to $25 million of DIP financing agented by Ankura Trust Company and a Village Super Market stalking-horse bid of about $70 million for five stores and the production/distribution center source filing source filing.
By confirmation, the case had become a post-sale wind-down. The disclosure statement reported closed sales to Village for about $76 million, Seven Seas/Key Food for about $5 million, Amazon Retail for $1.5 million of store leases, and Bogopa for more than $6 million of additional store assets, with DIP paydowns of $20 million in new-money loans and $40.3 million in roll-up loans source filing. The confirmed plan cancels parent equity, sends general unsecured creditors to a GUC Recovery Trust, authorizes the wind-down and dissolution of the debtors, and names Drivetrain LLC as GUC Recovery Trustee; the court entered the confirmation order on October 5, 2020 and made it immediately enforceable source filing source filing.
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