Commitments and Contingencies

6 Months Ended

Sep. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Note 8 – Commitments and Contingencies

Operating Lease - Obar Camden Limited

On February 19, 2004 OCL entered into a non-cancellable lease for premises for a period of 25 years expiring November 27, 2028. On October 22, 2004, OCL entered into a deed of variation to the original non-cancellable lease for the premises with an annual rent of £473,000 per year plus valued added taxes for the first five (5) years and with an annual rent of £548,337 per year plus valued added taxes for the remainder of the lease, with free rent for the first fifteen (15) months of the occupancy. The lease provides for a rent review every fifth anniversary of the effective date whereby the principal rent may be increased at each such review date to the open market rent (as defined) if that is a greater than the amount of the principal rent under the lease immediately before the review date. In conjunction with the signing of the deed of variation the landlord (i) provided consideration of £175,000, and (ii) contributed an additional £175,000 towards improvements upon execution of the deed of variation.

Future minimum lease payments under the non-cancelable operating lease are as follows:

Year ending March 31:	£		$
2016 (Remainder of the fiscal year)	£	274,169	$	414,654
2017		548,337		829,306
2018		548,337		829,306
2019		548,337		829,306
2020		548,337		829,306
2021 and after		4,748,749		7,182,016
	£	7,216,266	$	10,913,894

Deferred Rent

To induce OCL to enter into the operating lease and the deed of variation for a period of 25 years, the landlord granted free rent for the first fifteen (15) months of the occupancy and consideration/contribution of £350,000 in aggregate, which will be recognized on a straight-line basis over the duration of the initial lease term of 25 years.

Legal Proceedings

The judicial review is being brought by Obar Camden Limited. The current judicial review claim (case number CO/738/2015) was filed in the High Court by Obar Camden Limited on February 16, 2015.  (Judicial review is the process by which the Courts review the exercise of statutory functions by public bodies in England and Wales).  The claim is a legal challenge to the decision by the London Borough of Camden Council to grant planning permission reference 2014/2621 on January 6, 2015 for the redevelopment of the former Hope & Anchor public house as 8 residential units.  This is the neighboring property to the Koko Club and the grounds of challenge relate to legal flaws in the way that the Council assessed noise and heritage impacts of the proposed development as part of its decision.  The relief sought is a Court Order to quash the planning permission that has been granted.  Whilst the Council is defending the claim, the applicant is playing no active role in the proceedings. 

Judicial review is a two stage process, where the case is first considered by a judge on the papers to decide whether it should get permission to proceed to a substantive hearing.  The Court granted permission for the claim to proceed on March 27, 2015. A one-day hearing occurred in the High Court on August 5, 2015 and the Court has taken the matter under submission.

The case has been brought because the Council has granted a planning permission for a multiple occupancy residential development adjacent to KOKO.  Obar Camden believes that the Council did not properly seek to understand and consider the potential for conflict between the venue and new residents being in such close proximity to each other and without requiring adequate sound insulation measures to be in place to ensure that the parties can co-exist peacefully.   The grant of the permission in its current form leaves the venue potentially vulnerable to complaints, which in turn could have adverse consequences for KOKO’s premises licence. 

On September 8, 2015, the Court ordered that the planning permission dated January 6, 2015 granted by the London Borough of Camden to the Interested Party under reference 2014/2621/P is quashed and that the London Borough of Camden shall pay Obar Camden Limited’s costs in the sum of £35,000.