United States Bankruptcy Court Central District of Californiaecf-ciao.cacb.uscourts.gov/Posted/MH_102720.pdfGraciela Romo Oyarzabal Pro Se Trustee(s): Steven M Speier (TR) Pro Se 10/27/2020

United States Bankruptcy CourtCentral District of California

Judge Mark Houle, PresidingCourtroom 303 Calendar

Riverside

Tuesday, October 27, 2020 303 Hearing Room

11:00 AMDavid John Stoykovich, Jr. and Merlina Lynn Burton6:18-17784 Chapter 13

#1.00 CONT Notice of motion and motion for relief from the automatic stay with supporting declarations REAL PROPERTY RE: 20891 Thunderbird Rd, Apple Valley, CA 92307

MOVANT: HSBC BANK USA, NATIONAL ASSOCIATION

From: 9/29/20

EH__

(Tele. appr. Marjorie Johnson, rep. movant, HSBC Bank)

(Tele. appr. Todd Turoci, rep. Debtor)

53Docket

9/29/2020

Service: ProperOpposition: Yes

Parties to apprise the Court of the status of arrears and adequate protection discussions, if any.

APPEARANCES REQUIRED.

Tentative Ruling:

Party Information

Debtor(s):

David John Stoykovich Jr. Represented ByTodd L Turoci

Joint Debtor(s):

Merlina Lynn Burton Represented ByPage 1 of 2410/27/2020 1:44:07 PM



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11:00 AMDavid John Stoykovich, Jr. and Merlina Lynn BurtonCONT... Chapter 13

Todd L Turoci

Movant(s):

HSBC Bank USA, National Represented BySean C FerryEric P Enciso

Trustee(s):

Rod Danielson (TR) Pro Se

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11:00 AMGolda Y Williams6:19-11103 Chapter 13

#2.00 CONT Notice of motion and motion for relief from the automatic stay with supporting declarations REAL PROPERTY RE: 7253 Seeley Court, Highland, California 92346

MOVANT: BANK UNITED NA

From: 8/18/20, 9/29/20

EH___

(Tele. appr. Marjorie Johnson, rep. movant, Bank United)

48Docket

8/18/2020

Service: ProperOpposition: None

Parties to apprise Court of status of adequate protection discussions.


Tentative Ruling:

Party Information

Debtor(s):

Golda Y Williams Represented ByDaniel King

Movant(s):

BANK UNITED N.A. Represented ByJulian T CottonSean C Ferry

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11:00 AMGolda Y WilliamsCONT... Chapter 13

Trustee(s):


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11:00 AMCory LeRoi Page and Gabriella Pre Page6:19-17283 Chapter 13

#3.00 Notice of motion and motion for relief from the automatic stay with supporting declarations PERSONAL PROPERTY RE: 2017 Volkswagen Passat

MOVANT: VW CREDIT LEASING, LTD.

EH__

(Tele. appr. Austin Nagel, rep. moving party, Vokswagen)

44Docket

10/27/2020


For the reasons set forth in the motion, the Court is inclined to:

-GRANT relief from stay pursuant to 11 U.S.C. § 362(d)(1) -GRANT waiver of Rule 4001(a)(3) stay-GRANT request under ¶ 2 -DENY alternative request under ¶ 11 as moot

APPEARANCES WAIVED. Movant to lodge order within seven days. If oral or written opposition is presented at the hearing, the hearing may be continued.

Tentative Ruling:

Party Information

Debtor(s):

Cory LeRoi Page Represented ByKristin R Lamar

Joint Debtor(s):

Gabriella Pre Page Represented ByKristin R Lamar

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11:00 AMCory LeRoi Page and Gabriella Pre PageCONT... Chapter 13

Movant(s):

VW Credit Leasing, Ltd. Represented ByAustin P Nagel

Trustee(s):


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11:00 AMAdam Brian Britt and Kenya Lashawn Britt6:19-19251 Chapter 13

#4.00 CONT Notice of motion and motion for relief from the automatic stay with supporting declarations PERSONAL PROPERTY RE: 2018 Honda Accord, VIN No. 1HGCV1F1XJA059123

MOVANT: A-L FINANCIAL CORP

From: 9/29/20

EH__

43Docket *** VACATED *** REASON: ORDER GRANTING RELIEF ENTERED ON 10/13/20 (DOC 49. )

- NONE LISTED -

Tentative Ruling:

Party Information

Debtor(s):

Adam Brian Britt Represented ByMatthew D. Resnik

Joint Debtor(s):

Kenya Lashawn Britt Represented ByMatthew D. Resnik

Movant(s):

A-L Financial Corp. Represented ByLincoln D Gardner

Trustee(s):


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11:00 AMAngela Clarice Atou6:19-19922 Chapter 13

#5.00 Notice of motion and motion for relief from the automatic stay with supporting declarations REAL PROPERTY RE: 11911 Bluff Court, Adelanto, CA 92301

MOVANT: LAKEVIEW LOAN SERVICING, LLC

EH__

(Tele. appr. Christina Khil, rep. moving party Lakeview Loan Servicing)

32Docket

Tentative Ruling:

10/27/2020


11 U.S.C. § 362(c)(3)(A) provides that

(3) if a single or joint case is filed by or against a debtor who is an individual in a case under chapter 7, 11, or 13, and if a single or joint case of the debtor was pending within the preceding 1-year period but was dismissed, other than a case refiled under a chapter other than chapter 7 after dismissal under section 707(b)--

(A) the stay under subsection (a) with respect to any action taken with respect to a debt or property securing such debt or with respect to any lease shall terminate with respect to the debtor on the 30th day after the filing of the later case;

Here, Debtor had a previous Chapter 13 case dismissed on October 18, 2019, less than one year before the instant case was filed on November 10, 2019. Debtor’s motion to continue the automatic stay having been denied pursuant to order entered December

Tentative Ruling:

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11:00 AMAngela Clarice AtouCONT... Chapter 13

27, 2019, the automatic stay expired on December 10, 2019. Therefore, the automatic stay no longer being in effect, the Court is inclined to DENY the motion as MOOT.


Party Information

Debtor(s):

Angela Clarice Atou Represented ByTodd L Turoci

Movant(s):

Lakeview Loan Servicing, LLC, and Represented ByChristina J Khil

Trustee(s):


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11:00 AMMiesha T. Johnson6:20-11412 Chapter 13

#6.00 Notice of motion and motion for relief from the automatic stay with supporting declarations REAL PROPERTY RE: 7546 Willow Way,Highland, CA 92346-3827

MOVANT: FREEDOM MORTGAGE CORPORATION

CASE DISMISSED 10/15/20

EH__

(Tele. appr. Dane Exnowski, rep. moving party Freedom Mortgage Corporation

(Tele. appr. Sundee Teeple, rep. Debtor)

48Docket *** VACATED *** REASON: CASE DISMISSED 10/6/20

- NONE LISTED -

Tentative Ruling:

Party Information

Debtor(s):

Miesha T. Johnson Represented BySundee M Teeple

Movant(s):

Freedom Mortgage Corporation Represented ByDane W Exnowski

Trustee(s):


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11:00 AMKmog LLC6:20-16034 Chapter 7

#7.00 Notice of motion and motion for relief from the automatic stay with supporting declarations UNLAWFUL DETAINER RE: 16641 Pinnacle Peak Ct., Riverside, CA 92503

MOVANT: REDWOOD HOLDINGS, LLC

CASE DISMISSED 9/21/20

EH__

(Tele. appr. Elaine Yang, rep. creditor, Redwood Holdings, LLC)

7Docket

10/27/2020

Service: ProperOpposition: Debtor

Debtor’s bankruptcy case was dismissed on September 21, 2020. Pursuant to 11 U.S.C. § 362(c)(1) & (2) the automatic stay has terminated in its entirety. As a result, the Court is inclined to DENY the request under ¶ 2 as moot.

The Court is inclined to DENY the request under ¶ 7 for lack of cause shown. Specifically, the Court notes that it considers ¶ 7 an extraordinary remedy that is only appropriate in cases where a writ of possession has already been issued.

The Court is inclined to DENY the request for relief under 11 U.S.C. § 362(d)(4) because that section requires either an unauthorized transfer of an interest in the property or multiple bankruptcy cases affecting the property. Here, Movant has not alleged either.

The Court does agree that some prospective relief is warranted, given that Debtor filed

Tentative Ruling:

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11:00 AMKmog LLCCONT... Chapter 7

a pro se non-individual Chapter 7 case a day after a foreclosure sale was held, and Debtor’s case was summarily dismissed. Based upon Debtor’s non-compliance with basic duties of a party in bankruptcy, and based on the timing of the commencement of the instant case, the Court is inclined to GRANT the request under ¶ 9B and DENY the lesser remedy under ¶ 11. The Court is inclined to DENY the request under ¶ 10 for lack of cause shown, given that the relief under ¶ 9B appears adequate to afford Movant protection.

Finally, the Court is inclined to WAIVE the Rule 4001(a)(3) stay and DENY the request under ¶ 13 on the basis that it does not appear any further relief is requested.


Party Information

Debtor(s):

Kmog LLC Pro Se

Movant(s):

Redwood Holdings, LLC Represented ByElaine Yang

Trustee(s):

Steven M Speier (TR) Pro Se

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12:00 PMGraciela Romo Oyarzabal6:20-16990 Chapter 7

#7.10 Application for Fee Waiver

EH__

0Docket *** VACATED *** REASON: DEFICIENCY CURED ON 10/22/20

- NONE LISTED -

Tentative Ruling:

Party Information

Debtor(s):

Graciela Romo Oyarzabal Pro Se

Trustee(s):

Steven M Speier (TR) Pro Se

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2:00 PMVisiting Nurse Association of the Inland Counties6:18-16908 Chapter 11

#8.00 Motion to Approve Compromise Under Rule 9019 Debtor and Debtor-in-Possession's Motion for Order Approving Compromise of Controversy Pursuant to Federal Rule of Bankruptcy Procedure 9019

EH__

(Tele. appr. Anthony Friedman, rep. Interested party, The H.N. and Frances C. Berger Foundation)

(Tele. appr. David Golubchik, rep. H.N. & Frances C. Berger Foundation)

(Tele. David Goodrich, rep. Debtor)

(Tele. appr. Sean O'Keefe, rep. creditor, Simione HealthCare Consultants)

(Tele. appr. David Wood, rep. Creditor Committee)

(Tele. appr. Jolene Tanner, rep. creditor, United States of America)

766Docket

10/27/2020

BACKGROUND

On August 15, 2018, Visiting Nurse Association of the Inland Counties ("Debtor") filed a Chapter 11 voluntary petition. Debtor’s disclosure statement was approved pursuant to order entered September 17, 2020. A hearing on the confirmation of Debtor’s first amended Chapter 11 plan is currently set for November 17, 2020.

Tentative Ruling:

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2:00 PMVisiting Nurse Association of the Inland CountiesCONT... Chapter 11

On June 9, 2020, Debtor filed a sale motion proposing to sell substantially all of its assets. Pursuant to order entered July 16, 2020, the proposed sale was approved. The sale generated gross proceeds of $7,200,000 with net sale proceeds totaling $6,822,450. On August 21, 2020, Debtor filed a motion to approve a compromise with The Travelers Companies, Inc. ("Travelers"). That compromise motion was approved by order entered September 30, 2020, and resulted in $1,575,000 held by Travelers being returned to the bankruptcy estate.

Three motions were subsequently filed that were related to the distribution of funds held by Debtor. First, on August 31, 2019, Debtor filed a motion to approve a compromise with The H.N. and Frances C. Berger Foundation ("Berger"). This motion sought to resolve the secured and unsecured portion of Berger’s claim for attorney fees incurred through February 29, 2020. The motion proposed to fix the secured portion of the attorney fees at $212,750. On September 14, 2020, the IRS filed a limited opposition to the motion. Debtor appears to have inadvertently not set the matter for hearing, and no further action has been taken on this motion.

Second, on September 3, 2020, Berger filed a motion for release of funds from sale proceeds and payment to secured creditor on account of secured claim. This motion sought the payment of $4,730,202.11 (plus interest) to Berger on account of Berger’s lien against Debtor’s assets. Both Berger and Debtor have referred to the limited opposition filed by the IRS and mentioned in the preceding paragraph as having been related to this motion, although the limited opposition did not formally oppose Berger’s motion. After an initial hearing held on September 29, 2020, the Court continued the matter to October 27, 2020.

Third, on September 8, 2020, Debtor filed a motion to approve a compromise with Simione Healthcare Consultants, LLC ("Simione"). Pursuant to the compromise with Simione, Simione would be allowed a secured claim in the amount of $2,437,549.70. From that secured claim, Simione would be paid $1,050,000 within three days of the entry of the order approving the compromise, and the remainder of the lien would be avoided and preserved for the benefit of the estate. The IRS filed an opposition this compromise motion on September 15, 2020. After an initial hearing held on

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September 29, 2020, the Court continued the matter to October 27, 2020.

On October 6, 2020, Debtor filed the instant compromise motion with the IRS. The salient terms of the compromise motion are summarized as follows:

1) The IRS is to withdraw its objection to Debtor’s motions to approve compromises with Berger and Simione;

2) Debtor may pay Berger the entirety of its secured claim in accordance with the terms set forth in the motion to approve compromise with Berger;

3) Debtor may pay Simione the $1,050,000 contemplated in the motion to approve compromise with Simione;

4) Debtor may pay the IRS $1,600,000;

5) After allowance of professional fees, Debtor may pay professionals $750,000;

6) As to the sale proceeds and the funds recovered from Travelers, the Simione lien that is proposed to be avoided and recovered for the benefit of the bankruptcy estate is subordinated to $1,600,000 of the IRS lien;

7) As to all other assets, the Simione lien that is proposed to be avoided and recovered for the benefit of the bankruptcy estate is subordinated to the IRS lien; and

8) "Upon payment of the IRS’ secured claim in full, including any accrued interest, from any source, the Debtor may pay its professionals on their allowed claims from the Reserve Funds without further notice or order of the Bankruptcy Court."

Procedurally, the Court notes that there are certain procedural problems with the terms summarized on pages six through nine of the motion. First, as noted earlier, the motion to approve compromise with Berger was never actually set for hearing and is technically not before the Court at this time. Second, paragraph 6 of Debtor’s summary of the salient terms [Dkt. No. 766, pg. 7], provides: "Upon approval of this

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Agreement by the Bankruptcy Court and an order of the Bankruptcy Court granting the Simione Motion, the Debtor may pay the IRS $1,600,000 from the sale proceeds and the Travelers recovery. This payment shall be made within 16 days of the order on this Agreement." But paragraph 2 of the salient terms provides that "[t]he Debtor and the IRS shall agree to a continuance of the hearing on the Simione Motion for approximately 30 days." Logically, the combination of the those two provisions would require any approval of the instant motion to be delayed, at a minimum, fourteen days.

DISCUSSION

Pursuant to 11 U.S.C. § 1107(a), Debtor has all the rights and duties of a trustee. Rule 9019(a) authorizes the bankruptcy court to approve a compromise or settlement on the trustee's motion and after notice and a hearing. The bankruptcy court must consider all "factors relevant to a full and fair assessment of the wisdom of the proposed compromise." Protective Comm. for Indep. Stockholders of TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968). In other words, the bankruptcy court must find that the settlement is "fair and equitable" in order to approve it. Martin v. Kane (In re A & C Props.), 784 F.2d 1377, 1381 (9th Cir. 1986).

In conducting this inquiry, the bankruptcy court must consider the following factors:

(a) the probability of success in the litigation; (b) the difficulties, if any, to be encountered in the matter of collection; (c) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attending it; and (d) the paramount interest of the creditors and a proper deference to their reasonable views in the premises.

Id.

The bankruptcy court enjoys broad discretion in approving a compromise because it "is uniquely situated to consider the equities and reasonableness." United States v. Alaska Nat'l Bank (In re Walsh Construction, Inc.), 669 F.2d 1325, 1328 (9th Cir. 1982). As stated in A & C Props.:

The purpose of a compromise agreement is to allow the trustee and the creditors to avoid the expenses and burdens associated with litigating sharply contested and dubious claims. The law favors compromise and not litigation for its own sake, and as long as the bankruptcy court

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2:00 PMVisiting Nurse Association of the Inland CountiesCONT... Chapter 11amply considered the various factors that determined the reasonableness of the compromise, the court's decision must be affirmed.

Id. (citations omitted).

For the reasons stated in the motion, noting service was proper and that the Court has not received any opposition, the Court is inclined to find that Debtor has satisfied the A&C Properties factors. Specifically, the Court notes that the complexity of the legal dispute and the delay that would be caused by litigation cause the first, third, and fourth factors to weigh in favor of the settlement proposed.

The Court does have some concerns that the arrangements proposed constitute an impermissible sub rosa plan. While there is not a universal, clear definition of what constitutes an impermissible sub rosa plan, a sale or settlement that has the effect of disposing of or resolving all or substantially all of a debtor’s assets or liabilities, which would appear to be the case here, may be considered a sub rosa plan. See, e.g., In re Cajun Elec. Power Coop., 119 F.3d 349, 355 (5th Cir. 1997). This concern is amplified by the fact that Debtor has already filed a Chapter 11 plan and the confirmation hearing is merely three weeks away, yet the series of arrangements reached with the secured creditors will determine the most significant rights and obligations of the Debtor and the primary creditors outside of that plan process. See generally In re Cont'l Air Lines, Inc., 780 F.2d 1223, 1226 (5th Cir. 1986) ("Section 363 does not authorize a debtor and the bankruptcy court ‘to short circuit the requirements of a reorganization plan by establishing the terms of the plan sub rosa in connection’ with a proposed transaction."); see also In re Braniff Airways, Inc., 700 F.2d 935, 940 (5th Cir. 1983) ("The debtor and the Bankruptcy Court should not be able to short circuit the requirements of Chapter 11 for confirmation of a reorganization plan by establishing the terms of the plan sub rosa in connection with a sale of assets."). Finally, the settlements reached with the IRS and Simione, which relate to not only the respective priorities of the secured creditors’ liens, but impact the extent/validity of those liens and their relationship to a lien held by Debtors that would inure to the benefit of administrative claimants and/or unsecured creditors, would have indirect consequences for the entirety of the creditor body.


Party Information

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Debtor(s):Visiting Nurse Association of the Represented By

David M GoodrichBeth GaschenJennifer VicenteRyan W BeallSteven T GubnerJason B Komorsky

Movant(s):

Visiting Nurse Association of the Represented ByDavid M GoodrichDavid M GoodrichBeth GaschenBeth GaschenJennifer VicenteJennifer VicenteRyan W BeallRyan W BeallSteven T GubnerSteven T GubnerJason B KomorskyJason B Komorsky

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#9.00 CONT Debtor's Motion for Order (1) Approving Compromise of Controversy Pursuant to Federal Rule of Bankruptcy Procedure 9019; and (2) Authorizing Distribution of Sale Proceeds and Recovered Cash Collateral

From: 9/29/20

EH__







724Docket

- NONE LISTED -

Tentative Ruling:

Party Information

Debtor(s):

Visiting Nurse Association of the Represented ByDavid M Goodrich

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Beth GaschenJennifer VicenteRyan W BeallSteven T GubnerJason B Komorsky

Movant(s):

Visiting Nurse Association of the Represented ByDavid M GoodrichDavid M GoodrichBeth GaschenBeth GaschenJennifer VicenteJennifer VicenteRyan W BeallRyan W BeallSteven T GubnerSteven T GubnerJason B KomorskyJason B Komorsky

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#10.00 CONT Motion of Secured Creditor H. N. and Frances C. Berger Foundation for Release of Funds from Sale Proceeds and Payment to Secured Creditor on Account of Secured Claim

From: 9/29/20

EH__







720Docket

- NONE LISTED -

Tentative Ruling:

Party Information

Debtor(s):

Visiting Nurse Association of the Represented ByDavid M GoodrichBeth GaschenJennifer VicenteRyan W BeallSteven T Gubner

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Jason B Komorsky

Movant(s):

The H. N. and Frances C. Berger Represented ByDavid B GolubchikAnthony A Friedman

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2:00 PMDimlux, LLC6:20-13525 Chapter 7

Barghi v. Dimlux, LLC.Adv#: 6:20-01138

#11.00 Status Conference RE: [1] Adversary case 6:20-ap-01138. Complaint by Afsaneh Hossein Kaviani against Dimlux, LLC.. (91 (Declaratory judgment)) (Nejadpour, Fari)

EH__

1Docket

- NONE LISTED -

Tentative Ruling:

Party Information

Debtor(s):

Dimlux, LLC Represented ByDonald Beury

Defendant(s):

Dimlux, LLC. Pro Se

Plaintiff(s):

Mansour Hossein Barghi Represented ByFari B Nejadpour

Trustee(s):

Larry D Simons (TR) Pro Se

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Documents

United States Bankruptcy Court Central District of Californiaecf-ciao.cacb.uscourts.gov/Posted/MH_102720.pdfGraciela Romo Oyarzabal Pro Se Trustee(s): Steven M Speier (TR) Pro Se 10/27/2020