Coralee G. Penabad, Esq.

Admitted Pro Hac Vice

HELLINGER & PENABAD, P.A.
235 Altara Avenue
Coral Gables, Florida 33146
Phone No.: (305) 567-2869

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK

x
In re Chapter 11

TEEVEE TOONS, INC. Case No. 08-10562 (ALG)

d/b/a TVT RECORDS,

Debtor.
x

RESPONSE AND OPPOSITION TO NOTICE OF PROPOSED ASSUMPTION AND

ASSIGNMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES

TO ALL INTERESTED PARTIES:

Marty McCoy, Shaun McCoy, Mike Steele, Jerod Mankin and Tommy Johnson

(collectively “Bobaflex”) by and through its undersigned counsel, hereby objects to the Debtor’s

Notice of Proposed Assumption and Assignment of Executory Contracts and Unexpired Leases

(“Notice of Assumption”) to the extent the Debtor purports to assume and assign its Agreement

with Bobaflex, and moves the Court to enter an Order denying such proposed assumption and

assignment of Bobaflex’s Agreement and as grounds therefore states:

I. SUMMARY OF THE ARGUMENT.

The Notice of Assumption is premature and the sale process is flawed. Debtor has failed

to meet its burden on the Notice of Assumption and failed to comply with its evidentiary

burdens. Bobaflex objects to the Notice of Assumption on the grounds that: (a) Bobaflex’s

Agreement is not capable of assumption without Bobaflex’s consent and full cure; (b) even if the

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Agreement is capable of assumption and assignment, the cure amounts provided by the Debtor

are inaccurate and incomplete; and (c) Debtor has failed to provide adequate assurance of future

performance. Thus, Bobaflex opposes the Debtor’s attempt to assume and assign his contract.

II. PROCEDURAL AND FACTUAL BACKGROUND.

1. On or about March 29, 2005, Debtor entered into an exclusive recording artist

agreement with Bobaflex (collectively “Agreement”). Pursuant to the Agreement, TVT elected

to undertake recording and distribution of Bobaflex’s albums including, Apologize for Nothing

and Tales from Dirt Town.

2. On February 19, 2008, the Debtor filed its Petition for relief under Chapter 11 of

the Bankruptcy Code.

3. TVT is a record label whose business is to create, release and distribute records.

A record label generally sells records by locating talent; choosing the songs, styles and format

for the albums; hiring engineers and producers; assuring the tracks are mixed and re-mastered;

arranging the cover art; having the CDs or records manufactured; working with distributors to

sell the records and promoting and marketing its albums to increase sales. Artists rely on the

successful marketing, promotion and sale of their work by the recording company. Artists

depend on royalty revenue to off set any advance. TVT has not acted as a “record label” since

late 2007 and certainly in 2008 based upon Court testimony.

4. On May 28, 20008, the Debtor filed the Notice of Assumption pursuant to which

the Debtor seeks to assume and assign the Agreement.

5. Bobaflex believed that upon Debtor’s filing of its Notice extending the sale

deadlines, all deadlines including those regarding the Notice of Assumption were likewise

extended and the objection to the Notice of Assumption is due on June 13, 2008.

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Notwithstanding, the Notice of Assumption is premature as set forth herein, and Bobaflex’s

Objection should be deemed timely filed.

III. SPECIFIC OBJECTIONS.

A. The Debtor Cannot Assume and Assign Bobaflex’s Agreement
Without Bobaflex’s Consent.

6. Section 365(c)(1) of the Bankruptcy Code provides, in relevant part:

The Trustee may not assume of assign executory contract or

unexpired lease of the Debtor…if--

(A) applicable law excuses a party, other that the Debtor

to such contract or lease from accepting performance from or
rendering performance to an entity other than the Debtor or
the Debtor in possession…; and,

(B) such party does not consent to such assumption or

assignment…

If an executory contract cannot be assumed or assigned pursuant to applicable non-

bankruptcy law, the contract cannot be assumed or assigned without the party’s consent. In re:

Patient Educ. Media, Inc., 210 B.R. 237, 241-242 (Bankr. S.D.N.Y. 1997). Bobaflex’s

Agreement is a personal services contract. Under New York law, a personal services contract

cannot be assumed and assigned without Bobaflex’s consent. In Re Mitchell, 249 B.R. 55 (Bankr.

S.D.N.Y. 2000). See also, E.G., In re: Adelphia Communications Corp. 359 B.R. 65, 73-74

(Bankr.S.D.N.Y. 2007). In re: Catron, 158 B.R. 624, 627 (Bankr.E.D.Va. 1992). Bobaflex does

not consent to the assumption and assignment of its Agreement.

B. The Debtor has failed to Meet it Evidentiary Burden to Establish a Right

to Assume and Assign Bobaflex’s Agreement but. Bobaflex’s Limited
Investigation on Amounts Due Him Under the Contract Greatly Exceeds
the Sums Disclosed by the Debtor

7. Bobaflex objects to the cure amounts listed by the Debtor in the Notice of

Assumption because the Debtor has exclusive control of the accurate accounting information

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without which Bobaflex is unable to verify the actual amounts due them under the Agreement

the Debtor seeks to assume and assign.

8. The Debtor has attached extensive lists of contracts which it purports to assume

and assign through its pending sale procedure. The Debtor listed the cure amounts in most of

these executory contracts as $0.00. The Debtor has submitted no evidence and no affidavits

regarding how such determinations were made.

9. With respect to Bobaflex, the Debtor did not disclose any sums due Bobaflex. The

Debtor’s listed amounts are incorrect and incomplete. Therefore, Bobaflex objects under

Fed.R.Evid. Rules 601, 602 and 803(6) that the assumption motion cannot be granted, for failure

of the Debtor to make a foundation (or any evidentiary showing whatsoever, in reality) that

any particular contract cure amount is supported by either the personal knowledge of a

representative of Debtor, or the Debtor’s properly admitted business records.

10. Bobaflex is prejudiced in his analysis of the Notice of Assumption and cure

amounts because the Debtor is in exclusive possession of accurate information regarding sales

and payments. The proposed assumption and assignment should be denied based on the

Debtor’s own conduct in concealing its books and records from artists.

11. Based on the limited information Bobaflex has, its cure claim is no less than

$28,000.00 Without waiving Bobaflex’s other objections, Bobaflex respectfully requests this

Court's order determining that, to the extent that the Bobaflex’s Agreement may otherwise be

assumed by the Debtor,1 such assumption should be expressly conditioned on the Debtor or the

Debtor's purchaser making cure payments to Bobaflex in the amounts as set forth herein, not

1
It appears that the Debtor is not at present attempting to assume or assign mechanical licenses related to Bobaflex’s
lyrics. As a matter of caution Bobaflex objects to any purported assumption of mechanical licenses absent full cure,
and subject to Bobaflex’s further audit rights. Bobaflex further reserves its rights to seek damages (including

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later than closing of the sale of the Debtor's assets, and further, that nothing in the Court's order

approving either assumption or assignment affects any contract or right of Bobaflex where those

contracts or rights have not been expressly specified in the Debtor's notice.

D. The Debtor Has Failed to Provide Adequate Assurance of Future

Performance as Required By Section 365 of the Bankruptcy
Code.

12. 11 U.S.C. §§365(b) and (f) also provides that as a condition of assumption and

assignment of executory contracts, the Debtor must provide adequate assurance of cure, plus

adequate assurance of future performance. The Debtor bears the burden of showing adequate

assurance of future performance. In Re M. Fine Lumber Co., 383 B.R. 565, 573 (Bankr.E.D.N.Y.

2008).

13. Recording artists rely on the successful marketing, promotion and sale of their

work by the recording company to obtain their royalties. Payment of royalties to the artists

depends on the aggressive marketing, promotion and sale of the recording by the recording

company. The Debtor’s financial condition and testimony offered indicate that the Debtor

primary source of revenue is the DIP loan. The Debtor currently has minimal sales and has

ceased efforts to promote or market its recordings except digital downloads The Debtor is not

currently undertaking efforts to release any new albums.

14. The Debtor has failed to meet its burden insofar as it has failed to identify the

proposed purchaser or assignee and failed to provide Bobaflex with sufficient information to

establish that there can and will be adequate assurance of both cure and future performance.

statutory damages) and injunctive relief for infringing use or distribution of material subject to Bobaflex’s
mechanical licenses.

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 15. Bobaflex preserves and reserves its objection regarding adequate assurance.

Bobaflex submits that it cannot adequately advance its objections based on adequate assurance

grounds until:

! Debtor actually identifies its proposed purchaser;

! Debtor and/or the purchaser present the counterparties to executory contracts with
sufficient information to establish that there can and will be adequate assurance of
both cure and future performance; and

! Bobaflex has had sufficient time to review such information for the purposes of
determining whether in fact Bobaflex objects to the showing made by Debtor
and/or its purchaser.

16. To the extent the Debtor has identified its DIP Lender or any of the Debtor’s

affiliates or subsidiaries including TVT Music LLC or TVT Music Enterprise, LLC as credit

bidders and possible future owners of the Debtor’s assets and the Agreement, Bobaflex objects to

these companies as purchasers.

17. As it relates to D.B Zwirn, this entity is a hedge fund or lender and has no

experience in the music industry. Thus, D.B. Zwirn cannot act as a record label and perform the

functions of the record label under the Agreement.

18. To the extent Debtor’s affiliates or subsidiaries, including TVT Music Enterprise,

LLC would be a credit bidder and wind up with the Debtor’s assets, then artists and creditors are

right back in the same position as when the bankruptcy case started. Thus, if the purchaser

involves Mr. Gottlieb or his family as a controlling party, directly or indirectly, the Debtor can

never provide Bobaflex with adequate protection of future performance. The relationship with

Mr. Gottlieb is irreversibly destroyed. Under his leadership, the Debtor has been unable to

operate as a record label, failed to address the changes in the market place, and failed to properly

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manage the artists’ careers, all of which resulted in Debtor’s bankruptcy. There is no evidence

submitted that Mr. Gottlieb will not repeat his failures with a new entity.

19. Thus, neither D.B. Zwirn nor Mr. Gottlieb, individually or through any of its

entities, affiliates or family members, can provide adequate protection of future performance.

F. Bobaflex Objects to any extension of Debtor rights to Assume or

Assign the Agreement beyond June 30, 2008.

20. To the extent that the Debtor has requested an extension of Debtor’s rights to

assume and assign his Agreement, Bobaflex objects to an extension of time beyond June 30,

2008, the current date on the closing of the sale. In order for artists to continue to advance their

careers, it is imperative that they and their music be marketed and promoted by their record labels.

Bobaflex’s career is currently in abeyance and on hold due to the financial difficulties that faced

the Debtor and the Debtor’s bankruptcy filing. The Debtor is unable to market and promote

Bobaflex during the bankruptcy as evidenced by their budget. Bobaflex is suffering irreparable

harm as a result of Debtor’s failure and it is imperative that his Agreement be rejected (or

assumed and assigned subject to Bobaflex’s consent and satisfaction of adequate assurance and

the cure claim) before their career is irretrievably damaged. Any extension of assumption or

rejection, if granted, should be granted only through June 30, 2008.

IV. CONCLUSION.

TVT has failed and refused to provide potential buyers, as well as Bobaflex, with

sufficient and adequate information to properly address the amounts which are otherwise due the

artist in exchange for an assumption and assignment of Bobaflex’s Agreement. The Debtor

cannot assume and assign Bobaflex’s Agreement without Bobaflex’s consent and without

proving adequate protection of future performance. At this point, the evidence before the Court

indicates that there is no buyer or bidder for the Debtor’s assets. Thus, the Agreement may not be

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assumed and assigned. Accordingly, Bobaflex objects to the purported assumption and

assignment, the cure claim proffered by the Debtor and that Section 365(c) (1) is applicable as to

any attempted sale of the Agreement.

WHEREFORE, Bobaflex respectfully requests the Court enter and order finding that the

Agreement with Bobaflex is not subject to assumption and assignment and that the Agreement is

rejected and/or terminated, and for such other and further relief as the Court deems just and

proper.

Dated: June 13, 2008.

Miami, Florida
Respectfully submitted,

/s/ Corlaee G. Penabad

CORALEE G. PENABAD
Florida Bar No. 157030
(Admitted Pro Hac Vice)
ANDREW B. HELLINGER
Florida Bar No. 851663
HELLINGER & PENABAD, P.A.
235 Altara Avenue
Coral Gables, Florida 33146
Telephone: 305-567-2869
Facsimile: 305-447-2294
Counsel for Bobaflex.

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