Aleut Seeks Rent

Case 3:10-cv-00017-RRB Document 75 Filed 07/08/10 Page 1 of 17
Michael R. Mills
Michael A. Grisham
DORSEY & WHITNEY LLP
1031 West Fourth Avenue, Suite 600
Anchorage, AK 99501-5907
Telephone: (907) 276-4557
Facsimile: (907) 276-4152
Attorneys for Plaintiff

ALEUT ENTERPRISE, LLC
UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ALASKA
ALEUT ENTERPRISE, LLC, an Alaska

Limited Liability Company,
Plaintiff,
vs.
ADAK SEAFOOD, LLC, a Delaware Limited

Liability Company,
Defendant,
and
INDEPENDENCE BANK, a Rhode Island ALEUT ENTERPRISE, LLC’S

Banking Institution, MEMORANDUM IN SUPPORT OF
MOTION TO ESTABLISH
Intervenor, CONDITIONS OF OCCUPANCY
vs.
ALEUTIAN SPRAY FISHERIES, INC., a

Case No. 3:10-cv-00017-JWS
Washington corporation; PACIFIC PELAGIC
GROUP, LLC, a Washington limited liability
company; JOHN YOUNG, an individual; and
TRIDENT SEAFOODS CORPORATION, a
Washington corporation,
Third-Party Defendants.
MEMORANDUM IN SUPPORT OF MOTION TO ESTABLISH Aleut Enterprise, LLC v. Adak Seafood, LLC
CONDITIONS OF OCCUPANCY
Page 1 of 17
Aleut Enterprise, LLC, (“Aleut”) has moved this court for an order establishing
and enforcing the standards under which Adak Seafood, LLC (“AS”) may continue to
occupy Aleut’s Adak Island fish processing plant, which is the subject of this action,
during the pendency of the litigation. Because AS continues to occupy the plant based on
its claim that a 2006 Lease is still in full force and effect, AS must either comply with the
terms of the Lease during the pendency of this action or be ordered to vacate the plant.
INTRODUCTION
Through this action, Aleut seeks, among other relief, to evict AS from the fish
processing plant owned by Aleut on Adak Island (the “Premises”). AS opposed Aleut’s
motion for summary eviction based on the assertion that the Lease that forms the basis of
AS’s claim of a right to occupy the Premises is still valid and in effect. Judge Sedwick
denied Aleut’s motion without prejudice, determining that AS had potential factual and
legal defenses to Aleut’s eviction claim that should be litigated in the normal course, and
that summary eviction prior to the litigation of those defenses would be premature.
The issues of security and the terms under which AS would be allowed to occupy
the Premises during the pendency of the litigation were not addressed by Judge
Sedwick’s order. The Premises are undisputedly Aleut’s property, and are exclusively
occupied by AS – clearly there must be some terms under which AS maintains occupancy
of the Premises. AS cannot occupy the premises without cost. Aleut submits that – as
the Lease represents the basis of AS’s claim of a right to occupy the Premises during the
pendency of this litigation – the law, fundamental equity, and basic common sense
Page 2 of 17
require that AS must at least comply with the terms of that Lease while the litigation is
pursued.
Yet, remarkably, AS has refused to comply with the Lease – refusing even to pay
rent1 – while at the same time continuing to occupy the Premises under a claim of right
based on the Lease. AS cannot be allowed to have its cake and eat it, too. If AS is going
to occupy Aleut’s property pursuant to the claim that the Lease is valid, it must at least
continue to comply with the terms of that Lease. Through this motion, Aleut requests the
court to issue an order requiring AS to either comply with the terms of the Lease during
the pendency of this action, or alternatively to vacate the Premises.
FACTUAL AND PROCEDURAL BACKGROUND
The original lessee under the Lease, Adak Fisheries, LLC, (“AF”), was created in
2001 by Kejetil Solberg to carry out fish processing operations for Pacific cod on Adak
Island. Solberg partnered with various processing outfits, and by 2004 AF was owned
50% by Solberg and 50% by Aleutian Spray Fisheries (“Aleutian Spray”).2 Solberg
purchased ASF’s 50% interest in AF in October of 2005, in exchange for $5 million to be
paid over time.3
1 AS has asserted an unproven offset right as the reason not to pay rent. It has proposed
depositing the rent payment into the Court registry. Until there is any damage proven
against Aleut, there is no basis for AS to withhold payment of rent to Aleut.
2 After ASF learned that Ben Stevens claimed a 25% stock option in AF, Solberg and
ASF became entangled in a very public lawsuit, which is not relevant to any issues raised
in the present matter.
3 Exhibit A - Debtor’s Application to Reject Aleut Lease, Case No. 09-00623, Docket
34, at p 2.
Page 3 of 17
On January 1, 2006, Aleut and AF (then majority owned and controlled by
Solberg) entered into a lease agreement (the “Lease”) for a fish processing plant (the
“Plant”) located on Adak Island.4 The Lease provided for an initial term ending
December 31, 2009, with options to renew the Lease for five additional five-year terms.
To exercise the first option to renew, the Lease required AF to provide written notice to
Aleut at least 120 days before the expiration of the current term, by September 2, 2009.5
Very early into the new Lease arrangement, AF began to have difficulty meeting
its business obligations, including its obligations under the Lease, and was plagued by
accounting and management improprieties. AF ran up an unpaid electricity bill with the
City of Adak (which at that time was the certificated electrical utility on Adak Island) of
nearly $500,000.6 AF fell behind on its lease payments to Aleut, and failed to meet other
requirements of the Lease.7 During the height of the 2009 processing season, AF bought
significant amounts of diesel fuel on credit from Adak Petroleum, but defaulted on
payment.8 By the time of its bankruptcy, AF owed Adak Petroleum over $800,000 in
unpaid fuel bills.9 More troubling still are the allegations of self-dealing and fraud
leveled against Mr. Solberg during his tenure as manager of AF by the bankruptcy
trustee. The trustee has alleged that Mr. Solberg utilized company funds to pay for
4 Clerk’s Docket 56 - Lease attached as Exhibit 1 to Amended Complaint (“Lease”).

5 Lease at ¶ 4.
6 Exhibit B – Correspondence from the City of Adak.
7 See Clerk’s Docket 56, Exhibit 3 – Letter from Aleut to AF.
8 Adak Petroleum is a subsidiary of Aleut Enterprise.
9 Exhibit C – Adak Petroleum ‘s Proof of Claim, Case No. 09-00623, Docket 71.
Page 4 of 17
personal travel, mortgage payments on a recreational property in Halibut Cove, and
alimony payments, among other things.10
By June of 2009, it had become clear that Solberg would be unable to pay
Aleutian Spray. Effective August 3, 2009, Solberg turned over his entire membership
interest in AF to Aleutian Spray.11 Aleutian Spray conducted its due diligence and
determined that its interest in AF was essentially without value.12 ASF thus sold its
interest in AF to Pacific Pelagic Group, LLC, a Washington LLC owned by John Young
(a Seattle attorney who had represented ASF on this and other matters).13 Young’s plan
was to take AF through a bankruptcy to wind up the company’s affairs in an orderly
fashion. In sworn testimony before the bankruptcy court, Young testified that when he
had taken his controlling interest, he and Aleutian Spray had both understood that “there
was no possibility that this plant could continue to operate,” and that a Chapter 11
bankruptcy was the only reasonable plan to “preserve the assets” and minimize the loss
associated with AF’s failure.14
As the bankruptcy filing approached, AF faced a deadline of September 2, 2009,
for exercising its right to extend the initial term of the lease. It is undisputed that AF did
not exercise its option to renew. Young testified that he understood that “the lease by its
10 Exhibit D – Trustee’s Complaint, Adv. Case No. 10-90008, Docket 1.

11 See Exhibit A, at p. 3.None of the parties informed Aleut of this change in ownership
or sought its approval, as required by ¶10 of the Lease.
12 Exhibit E – Direct Testimony of John Young, September 18, 2009 Hearing, Case No.
09-00623 at pp. 42-43.
13 Id.
14 Id. at p. 42.
Page 5 of 17
terms expires at the end of this year [2009]. It is renewable at the option of the tenant,
but it is in default and the tenant is not in a position to renew it.”15 With the initial
bankruptcy filings – made only two weeks after the September 2, 2010, renewal deadline
– AF made an application to reject the Lease, asserting that it was in breach and that there
was no possibility of any continuing operations.16 In another bankruptcy court filing, AF
asserted that it was aware it would need a buyer for its assets, and had determined that the
terms of the Lease were not advantageous to future buyers in several respects, and that
the Lease would be more of a burden than a help in AF’s efforts to find a buyer.17 In
short, AF made a business judgment that not renewing the Lease was in the best interests
of AF and its creditors.
AF’s major creditor, Independence Bank, however, had a strong interest in
maintaining the Lease as part of the collateral for its millions in loans to AF. In addition
to various other litigation strategies, the Bank sought a buyer for AF that was interested
in maintaining the Adak operations and assuming the Bank’s loans. The buyer put
forward by the Bank was AS, which the Bank eventually disclosed was majority owned
by Kjetil Solberg, who was now in partnership with a European consortium of cod
brokers who had been AF’s major purchasers.18 Twenty minutes prior to the hearing on
15 Id. at p. 43.
16 See Exhibit A at pp. 3-4.
17 Exhibit F – Debtor’s Application to Sell Adak Plant Free and Clear of Liens, Case No.
09-00623, Docket 104, at p. 4.
18 Exhibit G – Transcript of November 10, 2009 Hearing on Sale of Adak Plant, Case
No. 09-00623, at pp 30-32.
Page 6 of 17
AF’s motion to reject the Lease, the Bank brokered a deal under which AF would agree
to sell its remaining interest in the Lease to AS.19
On November 10, 2009, Defendant AS acquired whatever interests AF had in the
Lease pursuant to a Sale Order from the bankruptcy court and subject to objections by
Aleut.20 Aleut made explicit on the record at that time that it did not approve of the
assignment, that it reserved any and all substantive objections to the sale, that it did not
accept any security provided by AS or its lender, and that the Lease expired on December
31, 2009 in any event due to the failure of AF to exercise the renewal right by September
2, 2009.21 In exchange for relief from the bankruptcy stay and for payment of $250,000
restitution for past property damage caused by AF, however, Aleut agreed to pursue its
objections in another procedural context.22 AS also indicated that it would hold $150,000
– which it asserted represented 6 months rent – in escrow for payment of rent.23 Aleut
did not accept that arrangement, however, and no details regarding the escrow were
exchanged and no rent was paid from that escrow account.
Over the ensuing weeks, Aleut made clear in writing on numerous occasions that it
did not accept any assignment to AS and that the Lease would expire by its own terms on
December 31, 2009.24 Aleut informed AS that it could not and should not rely on its
19 Id., at 17-18.
20 Exhibit H – Order Granting Debtor’s Application to Sell Adak Plant Free and Clear of
Liens, Case 09-00623, Docket 149.
21 See Exhibit G, at pp 17-20.
22 Id.
23 Id, at p. 9, ll. 16-18.
24 Exhibit I – Correspondence between Aleut and AS.
Page 7 of 17
ability to occupy the plant after that date, and that any investments made for plant
operations were made at AS’s own risk.25 Aleut provided AS with a Notice to Quit the
Premises pursuant to AS 09.45.100 and .105 on December 30, 2009.26 Nonetheless,
despite these specific notices, AS avoided any court ruling to determine the status of the
Lease, and proceeded to make significant investments in moving personnel and
equipment to the Adak plant, planning to engage in fish processing operations in 2010.
Meanwhile, AS’s lender had filed an adversary proceeding in the bankruptcy court
seeking a declaration that the Lease had been or could be renewed, and seeking damages
against Aleut.27 In November of 2009, Aleut filed a counterclaim in that adversary
proceeding seeking a declaratory judgment that the Lease would expire on December 31,
2009, and filed a motion for summary judgment on that claim.28 Aleut sought expedited
treatment of this motion, so that the matter could be dealt with prior to December 31,
2009, but AS’s lender opposed expedited consideration, and AS itself confusingly
refused to join the adversary action in which its Lease rights were purportedly at stake.29
Aleut was forced to seek involuntary joinder of AS in the adversary proceeding under
Civil Rule 19, which AS’s lender also opposed, causing additional delays.30 The
25Id.
26Exhibit J – Notice to Quit.
27Exhibit K – Plaintiff’s First Amended Complaint, Adv. Case 09-90031, Docket 10.
28Exhibit L – Motion for Summary Judgment, Adv. Case 09-90031, Docket 21.
29Exhibit M – Objection to Aleut Motion for Shortened Time, Adv. Case 09-90031,
Docket 40.
30Exhibit N – Aleut’s Motion to Compel Joinder, Adv. Case 09-90031, Docket 24;
Exhibit O – Plaintiff’s Response, Adv. Case 09-90031, Docket 49.
Page 8 of 17
Bankruptcy Court granted AS’s Rule 19 motion and set a hearing date for Aleut’s motion
for summary judgment on January 8, 2010.
AS, now a party, filed an “emergency” motion for mandatory preliminary
injunctive relief against Aleut seeking an order requiring Aleut’s fuel subsidiary Adak
Petroleum (which was not a party) to sell it fuel to operate generators purportedly
necessary to the plant’s processing operations. After expedited briefing and argument,
the Bankruptcy Court denied that motion from the bench.31
Prior to hearing Aleut’s motion for summary judgment, however, the Bankruptcy
Court sua sponte raised the issue of subject matter jurisdiction, and eventually dismissed
the matter based on a lack of subject matter jurisdiction.32
Having had its day in court regarding the present validity of the Lease postponed
for three months, Aleut filed an FED action in Alaska Superior Court, which was
subsequently removed to this court on February 8, 2010.33 After a hearing, Judge
Sedwick denied Aleut’s request for a summary grant of an FED, determining that AS’s
defenses, which included equitable claims, raised potential factual issues that rendered
summary FED proceedings inappropriate.34 Judge Sedwick then ordered the matter
31 Exhibit P – Order Denying Motion for TRO and Injunctive Relief, Adv. Case 09-
90031, Docket 110.
32Exhibit Q Order Granting Motion to Dismiss, Adv. Case 09-90031, Docket 151.
33 This case was filed as a summary eviction matter by Aleut Enterprise, LLC, (“Aleut”)
in January of 2010 in Alaska state court, and was subsequently removed to this court by
Defendant Adak Seafood, LLC, (“AS”). See Clerk’s Docket 1-5. At around the same
time, AS had filed its own action in this court seeking monetary and injunctive relief
against Aleut. Aleut was never served in this matter, and the case was subsequently
voluntarily dismissed. See Case No. 3:10-cv-00010-RRB, Docket 11.
34 See Clerk’s Docket 45 at p. 10, citing Kopanuk v. AVCP Regional Housing Authority,
Page 9 of 17
transferred to this court for potential consolidation with Case No. 3:10-cv-00010 RRB,35
and invited the parties to make such motions for security as they saw fit.36
AS brought two separate complaints before the Regulatory Commission of Alaska
(“RCA”), seeking to force Aleut to sell it fuel for AS’s Adak operations under a theory
that Aleut manages a regulated utility or fuel monopoly on Adak Island. The RCA
rejected both of those complaints, determining that AS had not properly pled a case that
Aleut’s fuel subsidiary was in fact a monopoly or a regulated utility subject to the RCA’s
regulatory jurisdiction.37
AS has exclusively occupied the Premises since November of 2009. Nonetheless,
in April of 2010, when the first quarterly rent payment under the terms of the Lease that
forms the basis of AS’s claim of a right to occupy the Premises came due, AS refused to
provide any rent payment to Aleut, averring instead that it would “offset” any
remuneration Aleut was due for AS’s exclusive possession of Aleut’s property against the
alleged damages it hoped to eventually prove against Aleut. As for the other provisions
of the Lease, AS simply refused to comply. AS flatly refused to provide the insurance
and financial information required by the Lease, and asserted that it would allow
inspection of the Premises only pursuant to the terms of Civil Rule 34, under the
902 P.3d 813, 816-17 (Alaska 1995).

35 In Case No. 3:10-cv-00010 RRB, in which AS sued Aleut, Aleut has not been served
with a complaint and the pleadings have not been joined.
36 Clerk’s Docket 45 at p. 10.
37 See, In the Matter of the Formal Complaint Filed by Adak Seafood, LLC Against Adak
Petroleum, LLC, Case Nos. U-10-9 and U-10-17, both before the Regulatory
Commission of Alaska; Exhibit R – Order Dismissing Complaint and Closing Docket,
Case U-10-17.
Page 10 of 17
remarkable assertion that Aleut’s legal position that the Lease had expired somehow
allowed AS to maintain exclusive possession of Aleut’s Premises free of any obligations
at all.38 Aleut made renewed demand, noting that AS had not made any motion for
prejudgment attachment and that AS’s inchoate claims and unproven averments of
financial harm did not allow it to unilaterally withhold monies presently owed to Aleut
for AS’s actual possession of Aleut’s Premises.39 This met with no response.
Aleut provided a second renewed notice to AS that, even though AS claimed that
the Lease was still effective, AS nonetheless remained in breach of its terms.40 In
response, AS provided some of the information called for by the Lease, but continued in
its refusal to allow Aleut to inspect Aleut’s own property under the Lease and its refusal
to make any payment at all for its 6 months of exclusive occupancy of Aleut’s property.41
AS continued to assert that, because Aleut claimed the Lease had expired, AS could
simply occupy Aleut’s property without paying rent and subject to only those terms AS
unilaterally chose to accept. AS also continued to assert that it could – unilaterally and
without court authorization – attach rent payments that AS would be due under the Lease
based solely on its inchoate and unproven damages claims.42 This motion followed.
38 Exhibit S Correspondence between Aleut and AS.

39 Exhibit T – April 1, 2010 letter from Mills to McDowall.
40 Exhibit U – June 11, 2010 letter from Grisham to AS and Independence Bank.
41 Exhibit V – June 17, 2010 letter from McDowall to Grisham.
42 Id.
Page 11 of 17
I. THE LAW, FUNDAMENTAL FAIRNESS, AND COMMON SENSE

REQUIRE THAT ADAK SEAFOOD COMPLY WITH THE LEASE THAT
PROVIDES THE BASIS FOR ITS CLAIM OF A RIGHT TO OCCUPY
THE PREMISES DURING THE PENDENCY OF THIS LITIGATION
AS has been allowed to occupy the Plant during the pendency of the present
litigation, pursuant to its claim that the Lease is still valid and provides AS with a present
right of possession. If AS’s claim is that the Lease provides it the right to occupy the
Plant, however, AS cannot at the same time be allowed to ignore and fail to comply with
the terms of the Lease. Yet AS has made clear by its actions that it has no intention of
honoring the Lease provisions while it nonetheless controls the Plant under the claim that
the Lease is still valid. Aleut is thus entitled to an order mandating AS’s compliance with
the terms of the Lease during the pendency of this action – without a right of offset – so
long as AS occupies the Plant. Alternatively, if AS refuses to comply with the terms of
the Lease, it should be ordered to vacate the Premises.
A. If AS Is To Occupy The Premises Pursuant to a Claim of Right Under

The Lease, It Must Comply With The Lease.
It is not disputed that AS presently maintains exclusive possession of the
Premises. AS is thus denied any other beneficial use of the Premises. AS’s claim of a
right to occupy the Premises is based entirely on the Lease.43 It is also beyond dispute,
however, that AS has not adhered to the terms of that Lease, even as it exclusively
occupies the Premises:
43 See Clerk’s Docket 23 (Answer and Counterclaims).

Page 12 of 17
• AS has consistently refused to allow Aleut to inspect the Premises – which
belong to Aleut – despite a specific provision of the Lease authorizing an
inspection at “at any and all reasonable times” without notice.44
• AS has not paid rent, asserting some form of right to unilaterally attach rent
payments based on its unproven damages claims, without court intervention
and without making a claim for prejudgment attachment under Civil Rule
64.45
• AS is not engaged in processing operations at the plant, in violation of
Paragraph 8(b) of the Lease.
• AS has failed and refused to provide financial information to Aleut on a
monthly basis, and to provide audited financial statements to Aleut by April
15 of every calendar year, as required under Paragraph 6 and Exhibit D to
the Lease.
AS’s position, in short, is that it can have its cake and eat it too: it occupies the
Premises under the claim that the Lease is still valid, yet disclaims any responsibility to
pay rent and meets only those Lease obligations it chooses to meet.
AS’s stance is unprincipled and inappropriate, and cannot be allowed to continue.
Judge Sedwick’s order denying Aleut’s motion for summary eviction neither transferred
ownership of the Premises to AS nor endowed them with a right to unilaterally select the
44 See Lease at ¶14; Exhibit S.

45 See Exhibit T.
Page 13 of 17
terms upon which they would occupy the Premises. And AS’s position that Aleut’s
demand that AS comply with the Lease so long as it maintains possession is inconsistent
with Aleut’s position that the Lease has expired is both wrong-headed and entirely misses
the point. Aleut is not relying on the Lease – AS is. Aleut is not accepting benefits it
could only get from the Lease – AS is. Most importantly, Aleut is not the party
maintaining exclusive possession of another’s property – AS is. If AS is going to retain
exclusive possession of Aleut’s property – even if only during the course of this litigation
– it must be pursuant to some terms. The terms that AS avers should apply are those of
the Lease, and so is AS is to maintain possession of the Premises while the Lease claims
are litigated, it must comply with those terms.
A number of different legal principles clearly support Aleut’s position. In the
context of claims for specific performance, for example, the claimant must show that he
or she is ready, able, and willing to perform his or her part of the contract.46 Alaska
courts have long recognized “the principle that a party suing to enforce a contract must
demonstrate that he would have performed his obligations but for the other party's alleged
breach.”47
46 Norton v. Herron, 677 P.2d 877 (Alaska 1984); see also Restatement (Second) of
Contracts § 238 (1981): “Where all or part of the performances to be exchanged under an
exchange of promises are due simultaneously, it is a condition of each party's duties to
render such performance that the other party either render or, with manifested present
ability to do so, offer performance of his part of the simultaneous exchange;” 17B C.J.S.
Contracts § 549: “Unless excused, a tender of performance is necessary where the acts to
be performed are mutual and dependent.”
47 Fleenor v. Church, 681 P.2d 1351, 1354 (Alaska 1984), citing Navato v. Sletten, 560
F.2d 340, 346 (8th Cir.1977) (“It is axiomatic that before a party can recover upon a
contract, he must show his own performance or his own tender thereof.”), Huszar v.
Page 14 of 17
Traditional principles of stays or injunctions – allowing the parties to maintain the
status quo during the course of a litigation – also mandate AS’s compliance with the
Lease. For example, a “Yellowstone injunction” is a device developed by the courts of
New York state. It applies where a landlord claims a breach that must be cured within a
certain time period to avoid default, but the tenant disputes the claim of breach. The
Yellowstone Injunction acts to toll the cure period so that, if a court renders an adverse
determination on the claim of breach, the tenant still has the opportunity to cure the
default.48 Inherent in this injunction, however, is that the tenant must continue to remain
current on all other obligations under the Lease.49
The notion that a tenant claiming a right of possession under a lease must continue
to comply with that lease in order to maintain the claim is supported by other case law as
well. In one Florida case, the appellate court reversed an award of damages for unlawful
possession during the course of a litigation, determining that a lessee who acts pursuant
to court order and continues to meet its lease obligations acted under a bona fide claim of
right and so was not subject to a damages award.50 The court stated that the “fact that
Certified Realty Co., 266 Or. 614, 512 P.2d 982, 984 (1972) (“Ordinarily ... a party to a
contract who complains that the other party has breached the terms of a contract must
prove performance on his own part, or a valid tender rejected by the other party.”)
48 See, e.g., WPA/Partners LLC v. Port Imperial Ferry Corp., 763 N.Y.S.2d 266 (A.D. 1
Dept. 2003).
49 Id. This is consistent with the provisions of AS 09.45.120, requiring an undertaking to
ensure payment of rent if an FED action is continued for longer than the statutory period
(as Judge Sedwick ordered it be here).
50 Greentree Amusement Arcade, Inc. v. Greenacres Development Corp., 401 So.2d 915
(Fla. App. 1981).
Page 15 of 17
appellant continued to pay its monthly rent is indicative of its belief that it enjoyed a
continuing right of possession in the premises.”
The principle behind AS’s motion is simple common sense. AS’s claim is that the
terms of the Lease should apply. It has been allowed to maintain exclusive possession of
Aleut’s property while it litigates that claim. Aleut has no present debt that it owes AS
against which AS could attach the rent payments, and there is nothing interfering with
AS’s ability to comply with the other provisions of the Lease. In order to maintain a
“bona fide claim” that the terms of the Lease apply, AS must at least comply with those
terms during the course of this litigation. To allow AS to ignore the Lease terms by
simply asserting some breach by its landlord sets inappropriate policy that invites a
defaulted tenant to claim landlord breach so that the tenant is relieved of lease
compliance. AS cannot be allowed to follow this path.
CONCLUSION
Aleut respectfully requests this court to issue an order mandating that AS’s
continued possession of the Premises during the course of this litigation is contingent
upon its compliance with the terms of the Lease that forms the basis of AS’s claim of a
right to occupy the Premises. Continued failure to comply with the terms of the Lease
should authorize AS’s immediate eviction from the Premises.
Page 16 of 17
DATED this 8th day of July, 2010, at Anchorage, Alaska.

Attorneys for Aleut Enterprise, LLC
/s/ Michael A. Grisham

BY:
MICHAEL R. MILLS, ABA #8911074
MICHAEL A. GRISHAM, ABA #9411104
1031 West Fourth Avenue, Suite 600
Anchorage, AK 99501-5907
Telephone: (907) 276-4557
mills.mike@dorsey.com
grisham.michael@dorsey.com
CERTIFICATE OF SERVICE
The undersigned hereby certifies that on the 8th day of July, 2010, a true and correct
copy of this document was served on:
Arnold M. Willig Brewster H. Jamieson

Christopher M. Mulhearn Marc Gerhard Wilhelm
by electronic means through the ECF system as indicated on the Notice of Electronic Filing,
or if not confirmed by ECF, by first class regular mail.
This document was prepared in 13 point Times New Roman font.
/s/ Michael A. Grisham

Michael A. Grisham, ABA #9411104
Dorsey & Whitney, LLP
Page 17 of 17

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Case 3:10-cv-00017-RRB Document 75 Filed 07/08/10 Page 1 of 17

Attorneys for Plaintiff

UNITED STATES DISTRICT COURT

ALEUT ENTERPRISE, LLC, an Alaska

ADAK SEAFOOD, LLC, a Delaware Limited

INDEPENDENCE BANK, a Rhode Island ALEUT ENTERPRISE, LLC’S

ALEUTIAN SPRAY FISHERIES, INC., a

the pendency of this action, or alternatively to vacate the Premises.

FACTUAL AND PROCEDURAL BACKGROUND

purchased ASF’s 50% interest in AF in October of 2005, in exchange for $5 million to be

paid over time.3

On January 1, 2006, Aleut and AF (then majority owned and controlled by

4 Clerk’s Docket 56 - Lease attached as Exhibit 1 to Amended Complaint (“Lease”).

personal travel, mortgage payments on a recreational property in Halibut Cove, and

alimony payments, among other things.10

was to take AF through a bankruptcy to wind up the company’s affairs in an orderly

associated with AF’s failure.14

As the bankruptcy filing approached, AF faced a deadline of September 2, 2009,

10 Exhibit D – Trustee’s Complaint, Adv. Case No. 10-90008, Docket 1.

was no possibility of any continuing operations.16 In another bankruptcy court filing, AF

of AF and its creditors.

AF’s major creditor, Independence Bank, however, had a strong interest in

to sell its remaining interest in the Lease to AS.19

On November 10, 2009, Defendant AS acquired whatever interests AF had in the

exchanged and no rent was paid from that escrow account.

Premises pursuant to AS 09.45.100 and .105 on December 30, 2009.26 Nonetheless,

Lease, and proceeded to make significant investments in moving personnel and

against Aleut.27 In November of 2009, Aleut filed a counterclaim in that adversary

for summary judgment on January 8, 2010.

AS, now a party, filed an “emergency” motion for mandatory preliminary

the Bankruptcy Court denied that motion from the bench.31

the matter based on a lack of subject matter jurisdiction.32

subsequently removed to this court on February 8, 2010.33 After a hearing, Judge

AS brought two separate complaints before the Regulatory Commission of Alaska

AS has exclusively occupied the Premises since November of 2009. Nonetheless,

902 P.3d 813, 816-17 (Alaska 1995).

allowed AS to maintain exclusive possession of Aleut’s Premises free of any obligations

38 Exhibit S Correspondence between Aleut and AS.

I. THE LAW, FUNDAMENTAL FAIRNESS, AND COMMON SENSE

the Lease, it should be ordered to vacate the Premises.

A. If AS Is To Occupy The Premises Pursuant to a Claim of Right Under

It is not disputed that AS presently maintains exclusive possession of the

occupies the Premises:

43 See Clerk’s Docket 23 (Answer and Counterclaims).

• AS has consistently refused to allow Aleut to inspect the Premises – which

belong to Aleut – despite a specific provision of the Lease authorizing an

inspection at “at any and all reasonable times” without notice.44

payments based on its unproven damages claims, without court intervention

• AS is not engaged in processing operations at the plant, in violation of

Paragraph 8(b) of the Lease.

• AS has failed and refused to provide financial information to Aleut on a

monthly basis, and to provide audited financial statements to Aleut by April

15 of every calendar year, as required under Paragraph 6 and Exhibit D to

AS’s stance is unprincipled and inappropriate, and cannot be allowed to continue.

44 See Lease at ¶14; Exhibit S.

maintaining exclusive possession of another’s property – AS is. If AS is going to retain

are litigated, it must comply with those terms.

A number of different legal principles clearly support Aleut’s position. In the