Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Berkeley Delaware Court, LLC

United States Court of Appeals, Ninth Circuit

August 23, 2016

In re Berkeley Delaware Court, LLC, Debtor,
v.
Christopher R. Barclay, Chapter 7 Trustee, Trustee-Appellee, Said Adeli, Plaintiff-Appellant, First Citizens Bank & Trust Company, Defendant-Appellee.

          Argued and Submitted May 3, 2016 Pasadena, California

         Appeal from the United States District Court for the Southern District of California, D.C. No. 3:12-cv-02908-CAB-MDD Cathy Ann Bencivengo, District Judge, Presiding

          Eric M. Schiffer (argued), Costa Mesa, California; Mohammed K. Ghods and William A. Stahr, Ghods Law Firm, Santa Ana, California; for Plaintiff-Appellant.

          Lisa Torres (argued), Gates, O'Doherty, Gonter & Guy, LLP, San Diego, California; J. Barrett Marum (argued), Karin Dougan Vogel, and Aaron J. Malo; Sheppard, Mullin, Richter & Hampton LLP, San Diego, California; for Defendants-Appellees.

          Before: Raymond C. Fisher, Milan D. Smith, Jr., and Jacqueline H. Nguyen, Circuit Judges.

         SUMMARY[*]

         Bankruptcy

         The panel affirmed the district court's order dismissing a bankruptcy appeal as moot under 11 U.S.C. § 363(m).

         The debtor's owner appealed the bankruptcy court's approval of a settlement agreement between the Chapter 7 trustee and a creditor that had sought to foreclose on the debtor's construction project. The panel held that the appeal was moot because the owner did not seek a stay of the bankruptcy court's order allowing the sale to the creditor of the bankruptcy estate's legal claims arising out of a state court case filed by the debtor against the creditor. Agreeing with other circuits and with the Ninth Circuit Bankruptcy Appellate Panel, the panel held that a bankruptcy court has discretion to apply the procedures of § 363(m) to a sale of claims pursuant to a settlement approved under Bankruptcy Rule 9019. In addition, the bankruptcy court did not clearly err in determining that the creditor was a good faith purchaser of the debtor's claims. Under § 363(m), therefore, the sale could not be modified or set aside on appeal unless it was stayed pending appeal.

          OPINION

          NGUYEN, CIRCUIT JUDGE

         Said Adeli appeals the district court's order dismissing his bankruptcy appeal as moot under § 363(m) of the Bankruptcy Code. We find no error and affirm.

         I

         About twenty years ago, Adeli bought a parcel of land in Berkeley, California, and formed Berkeley Delaware Court, LLC ("Debtor") for the purpose of constructing a mixed-use building on the property. In 2007, Debtor obtained a $16.25 million construction loan that was later sold to First-Citizens Bank & Trust Company ("First-Citizens"). First-Citizens eventually attempted to foreclose on the project, which prompted Debtor to file a Chapter 11 bankruptcy petition and a lawsuit against First-Citizens in the California Superior Court. After First-Citizens successfully removed the state court action to the bankruptcy court to be consolidated with the bankruptcy case, the parties reached a settlement. Under the terms of the settlement, First-Citizens agreed to reduce the loan pay-off amount by several millions of dollars on the conditions that Debtor pay the entire loan balance by a fixed date, and that construction on the project would be completed within six months. The settlement fell apart for reasons disputed by the parties. Debtor then filed a second Chapter 11 bankruptcy petition, and another action in state court alleging that First-Citizens acted fraudulently in connection with the project. Once again, First-Citizens successfully removed the state court action to bankruptcy court and consolidated it with the bankruptcy petition. First-Citizens obtained relief from the automatic stay, took possession of the project, and sold it to a third-party purchaser for $11, 925, 000, leaving First-Citizens with a deficiency claim of approximately $7 million. First-Citizens also filed cross-claims in the state action, alleging various breaches of the settlement agreement by Debtor including entering into leases and collecting rents. Based on the alleged breaches, First-Citizens asserted an administrative priority claim against the bankruptcy estate.

         The bankruptcy court eventually converted the bankruptcy case to a Chapter 7 proceeding and appointed a Trustee, who met with counsel for Debtor and First-Citizens to explore settlement options. A few months after his appointment, the Trustee reached a settlement with First-Citizens that allowed First-Citizens to purchase the estate's legal claims arising out of the state court case, subject to overbid procedures, in exchange for cash and a waiver of First-Citizens' claims against the estate. The Trustee filed a motion seeking approval of the settlement ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.