UNITED STATES BANKRUPTCY COURT

WESTERN DISTRICT OF LOUISIANA

ALEXANDRIA DIVISION

IN RE: NR GROUP, LLC BANKRUPTCY CASE NO.

DEBTOR 08-81329

OBJECTION BY CITY OF ALEXANDRIA

TO PROOF OF CLAIM BY CAPITAL ONE, N.A.

Now into court through undersigned counsel comes the CITY OF ALEXANDRIA, a creditor
and former lessor of the Debtor, which objects to the Proof of Claim filed on behalf of Capital One,
N.A. for the reasons set forth below.
1.
The City of Alexandria is a secured, undersecured and administrative expense claimant of
the Debtor.
2.
The City of Alexandria is the former lessor of the Debtor.
3.
By Order dated July 17, 2009 (docket #185) this Court deemed rejected the lease, as
amended, by and between the Debtor and the City of Alexandria and ordered the Debtor to surrender
the leased premises to the City of Alexandria at midnight July 17, 2009.
4.
The Order is final and was not appealed.
5.
The City is the fee simple owner of a tract located between Fourth Street, Jackson Street,
Main Street and Fisk Street. There is presently located on that tract a hotel and convention center.
In 1983, the City obtained an Urban Development Action Grant for $4,975,000.00 for the purpose
of buying blighted property and constructing a convention center for lease to a developer who would
construct a hotel on the leased premises under a long term lease.
6.

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 On February 28, 1988, the City entered into a Ground Lease ("the Ground Lease") with
Alexandria Convention Centre, Ltd. ("the Centre"), which was filed and recorded under Original
Instrument Number 763,784 in Conveyance Book 1084 at Page 798 and in Mortgage Book 956 at
Page 296 of the records of Rapides Parish.
7.
The Centre ran into some financial trouble and the lenders who financed the construction of
the hotel foreclosed on the leasehold interest created by the Ground Lease. See Civil Suit Number
142,686, "Guaranty Bank & Trust Company vs. The Industrial Development Board of Rapides
Parish, Inc., Alexandria Convention Centre, Ltd., et al."
8.
On January 7, 1987, the Sheriff adjudicated the leasehold interest created by the Ground
Lease to Hibernia National Bank, as Trustee for the various lenders.
9.
On May 14, 1988, the lenders transferred the leasehold interest to an entity called Alexandria
Hotel Property, Inc. ("Alexandria Hotel") by an Act Of Conveyance And Contribution filed and
recorded in Conveyance Book 1231 at Page 767 of the Rapides Parish records.
10.
On January 11, 1991, the City and Dimension Development Company, Inc. ("Dimension")
executed a new Amended Ground Lease ("the Amended Lease") which restated and revised all of
the terms of the Ground Lease. The Amended Lease was filed and recorded on January 11, 1991 in
Mortgage Book 1214 at Page 452 of the Rapides Parish records. On that same date, Alexandria
Hotel transferred all of its leasehold interest in the property to RT Rapides Hotel Partnership
("Rapides Hotel") and Dimension assigned all of its leasehold interest in the Amended Lease to
Rapides Hotel.

11.
On March 14, 1995, the City and Rapides Hotel entered into an Amendment To Ground
Lease ("the Second Amendment") which was filed and recorded in Conveyance Book 1431 at Page
948 and in Conveyance Book 1370 at Page 1 of the records of Rapides Parish which released from

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the Amended Lease two tracts for the purpose of allowing the City to construct the new Exhibition
and Riverfront Center ("the Exhibition Center").
12.
Effective as of October 25, 1996, the City and Rapides Hotel entered into an amendment to
the Amended Lease ("the Third Amendment") which was filed and recorded on October 28, 1996
under Original Instrument Number 1,036, 488 and in Mortgage Book 1429 at Page 539 of the
Rapides Parish records.
13.
Effective as of October 29,1996 by a Special Warranty Deed And Assumption Of Ground
Lease ("the Deed"), Rapides Hotel conveyed all of its right, title and interest in the Ground Lease
and the Amended Lease to Shaner Hotel Group Limited Partnership ("Shaner").
14.
Effective as of December 15, 2003, Shaner assigned, transferred and conveyed to N R Group
all of Shaner's right, title and interest in and to the Ground Lease and the Amended Lease by an
Assignment And Assumption Of Ground Lease filed and recorded in Conveyance Book 1680 at Page
221 and in Mortgage Book 1959 at Page 53 of the Rapides Parish records.
15.
On December 15, 2003, the City and NR Group entered into an amended lease ("the Fourth
Amendment") which was filed and recorded in Conveyance Book 1680 at Page 235 and in Mortgage
Book 1959 at Page 67 of the Rapides Parish records to fix the rent for the period from January 1,
2004 to December 31, 2008 at an annual rent of $35,000.00.
16.
The Debtor is no longer a lessee of the property and the lease has been deemed rejected by
final Order of this Court.

17.
The City of Alexandria filed an Ex Parte Motion requesting that this Court enter an Order
canceling the recordation of the lease between the City and NR Group on the public records of the
Clerk of Rapides Parish, State of Louisiana. (docket #223 in the main case).

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 18.
This Court granted the motion and entered an Order September 18, 2009 (docket #228 docket
#223 in the main case).
19.
Capital One filed a Motion for Reconsideration of the Ex Parte Order (docket #237 docket
#223 in the main case). This Court granted the Motion for Reconsideration and set a hearing on the
Ex Parte Motion for October 14, 2009. This Court held a pretrial conference on October 14, 2009
and directed the parties to file an Adversary Complaint and to consolidate the Ex Parte Motion with
the Adversary Complaint once it was filed.
20.
Capital One filed a secured Proof of Claim in the bankruptcy case, claim number 43, in the
amount of $3,081,916.62.
21.
The claim contains only summary sheets and no security documents, account statements or
notes are attached to the claim.
23.
The claim indicates that the security for the debt is “Hotel Tower, furniture, fixtures &
equipment, elevators & accounts receivable.” The claim indicates no secured interest in any
leasehold and further claims no secured interest in any real estate.
24.
The security documents filed and recorded on the public records of Rapides Parish clearly
indicate that Capital One holds a secured interest in “all right, title and interest of the Lessee under
the following lease and amended lease affecting the immovable (real) property therein respectively
described. That certain ground lease between the City of Alexandria, as Lessor, and the Alexandria
Convention Centre, Ltd., as Lessee, executed February 28, 1983....”
25.
Although the public records do not reflect the reason for the request, Debtor/Lessee requested
that the City of Alexandria enter into an Estoppel Certificate and Acknowledgment which was signed
by the Mayor of the City of Alexandria December 15, 2003 and recorded on the public records of

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Rapides Parish.
26.
Capital One is not a party to the agreement and Capital One failed to exercise any possible
rights it might have under the agreement including failure to provide the City with notice of its
leasehold mortgage and a true copy of same.
27.
The lease, as amended, between the City and the Debtor/Lessee provides that “...landlord
agrees that any leasehold mortgagee shall have the right, for a period of sixty (60) days subsequent
to the termination of this lease, to elect to demand a new lease of the Demised Premises,....”
28.
Again, Capital One failed to exercise its rights and failed to give any notice to the City
regarding its intention to execute a new lease.
29.
Counsel for Capital One did acknowledge the intent of Capital One to honor the Estoppel
Agreement between the City and the Debtor and subsequent counsel for Capital One informed the
City that the Estoppel Agreement was not binding and that Capital One was not a party to the
agreement. It is apparent from the public record that Capital One failed to provide any notice to the
City under the terms of the Estoppel Agreement.
30.
The lease was deemed rejected by Order dated July 17, 2009 and more than sixty (60) days
have lapsed since the rejection of the lease.
31.
The Proof of Claim has not been amended or supplemented.
32.
The City of Alexandria shows that it has filed an Adversary Complaint bearing adversary
case number 09-08045 to determine the extent and validity of the leasehold mortgage and liens in
favor of Capital One, N.A.
33.
The City of Alexandria shows that the claim of Capital One, N.A. is no longer a secured

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claim to the extent it claims a secured interest in the rejected lease or any other real property, tangible
or intangible.
34.
The City of Alexandria shows that the only security remaining to secure the debt to Capital
One, N.A. by the Debtor is possibly a secured interest in furniture, fixtures and equipment and
receivables of the Debtor.
35.
The City of Alexandria shows that this Court should require Capital One, N.A. to provide
copies of all security documents and further to provide an itemized accounting so that creditors and
other parties in interest can determine the exact amount owed to Capital One.
36.
Further, the City of Alexandria shows that this Court should reduce the claim of Capital One
to unsecured status.
37.
In the alternative, this Court should reduce the claim of Capital One to the value of the
security remaining in favor of Capital One.

WHEREFORE THE CITY OF ALEXANDRIA PRAYS that this objection to the Proof
of Claim of Capital One, N.A. be deemed good and sufficient and that the relief be granted as set
forth above.

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 Respectfully submitted,

WHEELIS & ROZANSKI

By: /s/ Stephen D. Wheelis

Stephen D. Wheelis #17205
Richard A. Rozanski #22583
P.O. Box 13199
Alexandria, Louisiana 71315-3199
318/445-5600
ATTORNEYS FOR CITY OF
ALEXANDRIA, LOUISIANA

CERTIFICATE OF SERVICE

I HEREBY CERTIFY that the above and foregoing Objection to Proof of Claim has been
served upon Debtor, NR Group, LLC, 701 Fourth Street, Alexandria, LA 71301; Debtor’s attorney,
Wade N. Kelly, 1777 Ryan Street, P.O. Box 2065, Lake Charles, LA 70601; and Office of U. S.
Trustee, 300 Fannin St., Suite 3196, Shreveport, LA 71101; Capital One Bank c/o Gary Tillman,
P.O. Box 12729, Alexandria, LA 71315-3199 and c/o Patrick Johnson, Lemle & Kelleher, L.L.P.,
Pam-American Life Center, 601 Poydras St., Ste. 2100, New Orleans, LA 70130; Servco
Restoration c/o E. Keith Carter, 4415 Thornhill, 2nd Floor, Ste. A, Shreveport, LA 71106; Thomas
Thompson, 800 Lafayette St., Ste 2200, Lafayette, LA 70501; Chapter 7 Trustee, Ted Brett Brunson,
P.O. Box 12, Natchitoches, LA 71457, by placing a copy of same in the United States mail postage
prepaid.
Alexandria, Louisiana this 10th day of November, 2009.

/s/ Stephen D. Wheelis

OF COUNSEL

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