In the Nick of Time, Standard May Still Salvage Playland Contract
By Robin Jovanovich and Tom McDermott
Rumors of Standard Amusement’s demise may be greatly exaggerated. Having filed for bankruptcy on May 27, the day before its operating contract was to have been severed by the County, means that Standard still has a shot at the public/private contract that was twice approved by the Westchester County Board of Legislators.
Standard engaged one of the top bankruptcy attorneys in the country, John Rapisardi, partner and chair of the global restructuring practice at O’Melveny & Myers. Rapisardi, a Rye resident, is also currently heading up Puerto Rico’s $120 billion restructuring plan and representing California Gov. Gavin Newsom in the Pacific Gas & Electric bankruptcy proceedings.
“There is nothing wrong with taking advantage of the bankruptcy code to save a business enterprise,” Rapisardi explained in an interview with the paper last weekend. “It extends the cure (grace) period, giving us an additional sixty days to make our case in front of a federal bankruptcy judge.”
He added, “The reason we went down this road is that the County was taking the position that the management agreement had been breached. Nick Singer’s concern was that he had been imploring the County Executive to proceed according to the agreement but was finding no willing partner on the other side.”
Westchester County will file a motion to dismiss the Chapter 11 case in the next two weeks at which point Standard will file an objection to the motion by mid-July, Rapisardi reported. The County will have a chance to reply. A hearing on the motion to dismiss is set for the week of July 29.
Rapisardi said he is “confident that Standard will prevail in defeating the County’s motion. They did not breach the contract; it was actually the County that failed to meet an agreed-upon payment.”
If the judge determines that there was no breach on Standard’s part, they will have to provide a plan of reorganization and demonstrate that it has available funding for future performance, stated Rapisardi.
Standard stands ready not only to assume the management agreement in its entirety, but to improve the contract, Rapisardi emphasized.