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In Re v. Pacifica L 22

June 8, 2012

IN RE:
SERRON INVESTMENTS, INC.,
DEBTOR.
SERRON INVESTMENTS, INC., APPELLANT,
v.
PACIFICA L 22, LLC, APPELLEE.



Appeal from the United States Bankruptcy Court for the Central District of California Bankr. No. 11-12566-MT Honorable Maureen Tighe, Bankruptcy Judge, Presiding

SUSAN M SPRAUL, CLERK U.S. BKCY. APP. PANEL OF THE NINTH CIRCUIT

MEMORANDUM*fn1

Argued and Submitted on May 17, 2012 at Pasadena, California

Filed - June 8, 2012

Before: PAPPAS, DUNN and HOLLOWELL, Bankruptcy Judges.

Chapter 11*fn2 debtor Serron Investments, Inc. ("Serron") appeals the bankruptcy court's order dismissing its bankruptcy case. We AFFIRM.

FACTS

Unless noted, the material facts in this case are undisputed.

Serron, a Delaware corporation engaged in the business of acquiring and selling interests in real property, acquired title to a property on Tryon Road in Los Angeles (the "Property") from Alejandro Elias Weissman ("Weissman") on January 26, 2009. At that time, the Property was already encumbered by a first deed of trust in the amount of $1,320,000, dated January 22, 2009, in favor of East-West Bank. The beneficial interest in this deed of trust was assigned to appellee Pacifica L 22, LLC ("Pacifica") on September 15, 2010.

Serron executed two other trust deeds on the Property: a second deed of trust for $265,000 in favor of First Yorkshire Holdings, Inc. ("First Yorkshire"); and a third deed of trust for $245,000 in favor of Durham Development Company, Inc. ("Durham Development").*fn3 Both the second and third trust deeds were dated April 9, 2010, executed April 13, 2010, and recorded on November 30, 2010.

On December 22, 2010, Serron executed a Grant Deed transferring a 25 percent interest in the Property to Weissman.

The Grant Deed bears the notation, "This is a bonafide gift and the grantor received nothing in return."

The next day, December 23, 2010, First Yorkshire, the beneficiary of the second deed of trust, filed a petition for relief under chapter 11. Bankr. C.D. Cal. Case no. 10-26058-AA. At that time, the monthly payments on the Pacifica first deed of trust were in default for seven payments totaling $9,116.92. Neither Serron nor First Yorkshire made any payments on the first trust deed after First Yorkshire filed for bankruptcy, so Pacifica filed a motion for stay relief on January 31, 2011. After a hearing on March 2, 2011, the motion for relief from stay was granted under § 362(d)(2) and (d)(4) by order entered on March 28, 2011, in which the First Yorkshire bankruptcy court noted that "the filing of the [First Yorkshire] petition was part of a scheme to delay, hinder and defraud creditors that involved either [] transfer of all or part ownership of, or other interest in the Property without the consent of the secured creditor or court approval." First Yorkshire appealed the stay relief to the Panel, and on May 10, 2012, the Panel entered its Opinion vacating the stay relief order. First Yorkshire Holdings, Inc. v. Pacifica L 22, LLC (In re First Yorkshire Holdings, Inc.), ___ B.R. ___, 2012 WL 1658250 (9th Cir. BAP 2012).*fn4

The day before the stay relief hearing in the First Yorkshire bankruptcy case, on March 1, 2011, Serron filed a chapter 11 petition. Serron's schedules listed the first deed of trust in favor of Pacifica as a disputed debt for $1,386,326.00, and undisputed deeds of trust in favor of First Yorkshire for $265,000 and Durham Development for $245,000. The only ...


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