Judge Theodor Albert Calendar For 29 Feb 2012

United States Bankruptcy Court Central District of California
Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-27587 #1.00 Drew Pennington Maconachy Chapter 11 Docket #: 1 Hearing Room 5B
STATUS CONFERENCE re: Chapter 11 Voluntary Petition
Tentative Ruling:
The Court is not persuaded that a filing deadline should not be set. The Court will hear argument as to an appropriate period of time.
Party Information Debtor(s): Drew Pennington Maconachy
Represented By
Michael N Nicastro Movant(s): Drew Pennington Maconachy

Represented By
Michael N Nicastro
2/28/2012
1:37:31PM
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:12-10002 #2.00 Vahid Tavokoli Farsoni Chapter 11 Docket #: 1 Hearing Room 5B
Tentative Ruling:
Deadline for filing plan and disclosure statement: June 1, 2012 Claims bar: 60 days after dispatch of notice to creditors advising of bar date.
Party Information Debtor(s): Vahid Tavokoli Farsoni
Represented By
Rebekah L. Parker Movant(s): Vahid Tavokoli Farsoni

Represented By
Rebekah L. Parker
2/28/2012
1:37:31PM
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:12-10028 #3.00 Kent Douglas Brush and Catherine Elizabeth Brush Chapter 11 Hearing Room 5B

Docket #: 1
Tentative Ruling:
Deadline for filing plan and disclosure statement: June 29,2012 Claims bar: 60 days after dispatch of notice to creditors advising of bar date.
Party Information Debtor(s): Kent Douglas Brush
Represented By
Bert Briones Joint Debtor(s): Catherine Elizabeth Brush

Represented By
Bert Briones Movant(s): Catherine Elizabeth Brush Kent Douglas Brush

Represented By
Bert Briones
Represented By
Bert Briones
2/28/2012
1:37:31PM
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:09-18043 #4.00 T Muthu Kumar Motion for relief from the automatic stay REAL PROPERTY Chapter 11 Hearing Room 5B
THE BANK OF NEW YORK MELLON Vs. DEBTOR (cont'd from 10-26-11 per stip. & order)
(cont'd from 12-21-11 per stip. & order)

Docket #: 56 *** VACATED *** REASON: CONTINUED TO MAY 9, 2012 AT 10:00 A.M. PER STIP/ORDER SIGNED 2-23-12 Tentative Ruling:
Tentative for 9/21/10 No Tentative - see # 13 ------------------------------------------------------------------------------------------------------The movant offers no evidence of value except the $50,000 listed on the schedules. How this value could ever have been thought correct, evan as vacant land, is not explained. The only alternative valuation is from debtor himself at $207,000, which still shows no equity. However, there is at least some showing of a reorganization "in prospect" and the need of this property for that reorganization. See section 362(d)(2). Since there is no equity cushion, the only viable means of adequate protection would be monthly payments. This needs to be at least equal to the rate of decline in value (if any) but no evidence appears of this in either brief. The matter will be denied at this time, conditioned on payments of $1,000 per month to the movant. The motion may be renewed in 90 days, at which time the expected showing of a reorganization "in prospect" will be considerable higher.
Party Information Debtor(s):
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Cont.... T Muthu Kumar Debtor(s): T Muthu Kumar
Represented By
Hearing Room
5B
Chapter 11
Jeffrey S Benice Dennis E Mcgoldrick Movant(s): The Bank of New York Mellon
Represented By
David F Makkabi
2/28/2012
1:37:31PM
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:09-18043 #5.00 T Muthu Kumar Motion for relief from the automatic stay REAL PROPERTY Chapter 11 Hearing Room 5B
JPMORGAN CHASE BANK Vs. DEBTOR (cont'd from 10-26-11 per stip. & order) (cont'd from 12-21-11 per stip. & order)
Docket #: 57 *** VACATED *** REASON: CONTINUED TO MAY 9, 2012 AT 10:00 A.M. PER STIP/ORDER SIGNED 2-23-12 Tentative Ruling:
Tentative for 9/21/10 No Tentative - see # 13 ----------------------------------------------------Tentative for 7/6/10: Status? -----------------------------------------------------Tentative for 6/8/10: Has this been resolved by settlement? ______________________________________________________ Tentative for 4/6/10: Now debtor asserts the value is $2,200,000. Even if true that is just a sliver above the $2,148,691 in reported liens which, by now, probably exceed $2.2 million. Debtor's showing that the property is necessary to a reorganization is unconvincing. Grant. ------------------------------------------------------------Tentative for 3/2/10: Neither side has presented a convincing case. The burden of proving lack of debtor equity falls upon movant. Here, movant has relied entirely upon schedules, which is a
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Chapter 11 Cont.... T Muthu Kumar hazardous practice when, as here, debtor now disclaims this value in favor of a higher value, allegedly to be supported by an appraisal. Since we have no other evidence, yet, movant carries its burden but just barely. Adequate protection even without equity can be provided by periodic payments, which are offered here in the amount of $3,500 per month. The alternative basis for relief is section 362(d)(2), upon which the debtor bears the burden of proving that the property is necessary to a reorganization. Beyond Mr. Kumar's generic assertions, we do not see much of an showing that such a reorganization is "in prospect." If the reorganization is nothing more than an eventual sale, a lot will depend on whether there is, in fact, any realizable equity. Hearing Room 5B
Continue for final hearing in 30 (or with stip 60 days ) conditioned on monthly tender of proposed adequate protection payments compliant with section 363(c).
Party Information Debtor(s): T Muthu Kumar
Represented By
Jeffrey S Benice Dennis E Mcgoldrick Movant(s): JPMORGAN CHASE BANK,

Represented By
Christopher M McDermott Joseph C Delmotte
2/28/2012
1:37:31PM
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:09-18043 #6.00 T Muthu Kumar Chapter 11 Hearing Room 5B
Motion for relief from the automatic stay REAL PROPERTY BANK OF AMERICA, NATIONAL ASSOCIATION Vs. DEBTOR (cont'd from 10-26-11 per stip. & order) (cont'd from 12-21-11 per stip. & order)
Docket #: 215 *** VACATED *** REASON: CONTINUED TO MAY 9, 2012 AT 10:00 A.M. PER STIP/ORDER SIGNED 2-23-12
Tentative Ruling:
Current status?
Party Information Debtor(s): T Muthu Kumar
Represented By
Michael G Spector Vicki L Schennum Movant(s): Bank of America, National

Represented By
Eric J Testan
2/28/2012
1:37:31PM
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Motion for relief from the automatic stay REAL PROPERTY JPMORGAN CHASE BANK, NA Vs. DEBTOR (cont'd from 10-26-11 per stip. & order) (cont'd from 12-21-11 per stip. & order)
Tentative Ruling: - NONE LISTED Party Information Debtor(s): T Muthu Kumar

Represented By
Michael G Spector Vicki L Schennum Movant(s): JPMorgan Chase Bank, National

Represented By
Eric J Testan
2/28/2012
1:37:31PM
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Confirmation on Amended Chapter 11 Plan of Reorganization (cont'd from 10-26-11 per stip. & order) (cont'd from 12-21-11 per stip. & order)
Tentative Ruling: In re T. Muthu Kumar, #13 @ 10:00 a.m. Sept. 22, 2010 This is the debtors motion to confirm his Chapter 11 Plan, as modified. The plan provides for ten classes of impaired claims. Except for Class 10, the class of general unsecured creditors, there are no consenting classes of impaired claims. No ballots were received for the other nine impaired classes and indeed written objections were received from WAMU/Chase [Classes 1,2,4,5,6,7] and Bank of New York [Classes 3 and 8]. So, debtor attempts to obtain confirmation over these objections (i.e. cramdown) under the provisions of 11 U.S.C. 1129(b)(2)(A) as to each of these classes of secured claims. The plan cannot be confirmed in its current form for several reasons, as explained below: 1. Fair and equitable A plan can be crammed down over the objection of a dissenting class of secured claims if the plan can be shown to be fair and equitable. In this plan, debtor offers the approach to fair and equitable found at 1129(b)(2)(A)(i), which, paraphrasing, allows confirmation if the creditor retains its lien and is paid future payments which, when reduced to present value, coveys a value not less than the value of the creditors collateral. Present value is, in this context, the mirror image of interest rate. So, in other words, the payments must include interest at a rate sufficient that, when reduced to present value, is not less than the value of the collateral. With the possible exception of Classes 6 and 7 (Cress property), it does not appear that there is any equity in any of the various properties. So, each must be evaluated as the equivalent of a 100% loan to value transaction. Even the Cress property is heavily encumbered and there may be little or no realizable equity. Interest rates must reflect risk, risk both as to non-payment and as to
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Chapter 11 Cont.... T Muthu Kumar changes in the market rate generally if the rate is fixed. Because these are likely all 100% loan to value loans, there is no margin of equity that might ameliorate risk. By definition, the debtor is not creditworthy given his chapter 11 status. Courts post-Till have adopted a formula approach to identifying a rate that would compensate for all detectable elements of risk such that the court can determine that the proposed confirmation rate adequately compensates the dissenting secured creditor. Very little analysis is offered on these points by either side. Creditors merely complain that the rate is too low, but do not explain why. Debtor offers the testimony of Mr. Henry Fok, but it is unpersuasive. Mr. Fok does not offer any market surveys or analysis, and even makes some astounding (and dubious) comments, such as: Keeping in mind the current residential real estate financing market, with the continuing fluctuation in values and the extensive accommodations and compromises made in the marketplace by mortgage lenders, fairness and equitability of the compensation to the secured creditor and the Debtors ability to comply with the Plan should be of major consideration in determining interest rates provide [sic] for in the Plan. Risk factors should be relegated to be of lesser import as secured lenders have been shown to be elastic in their ability to assume the risks in the residential mortgage loan arena, as demonstrated by their loan modification activities. Mr. Fok seems to be saying that because some lenders are known to entertain modifications on a voluntary basis, this can be translated somehow into the formulation of a cramdown rate as against unwilling lenders. Why, and if so, by what amount? How is this evaluated in a principled way? NO clue is offered. To say that identification of risk is no longer the primary issue is to miss the teaching of virtually every recent case in this area starting with Till. Even more disturbing is the suggestion that the primary issue is what debtor can afford, not what is the amount necessary to render present value. This is exactly opposite. The court must first determine what, under economic principles, renders present value, and only then determine whether the debtor can feasibly afford to pay this amount. The rate is not shaped to fit within ability to pay. Lastly, Mr. Fok concludes by offering the opinion at his 14 that the original contract rate should be sufficient to provide present value in the post bankruptcy world. But the loans were made in an entirely different environment and presumably against collateral with at least some margin of equity at that time; now they represent forced loans to a debtor in Chapter 11 with no equity at all in the collateral. It is the present facts that must be evaluated in assessing whether promised payments yield present value, not what might have prevailed years ago when these loans were made. To say Hearing Room 5B
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Chapter 11 Cont.... T Muthu Kumar these are equivalent situations and the same in risk level, is obviously wrong, ignores fundamentals of economics and, frankly, calls into question the competency of Mr. Foks opinion at any level. Mr. Fok does offer his analysis of the Supreme Courts opinion in Till v. SCS Credit Corp., 541 U.S. 465,124 S. Ct. 1951 (2004). As this court held in In re North Valley Mall, LLC, 432 B.R. 825, 831-32 (Bankr. C.D.Cal. 2010), Till can only be cited for the general precept that a formula approach is best for determining a cramdown rate. To the extent Till has any applicability in Chapter 11, the scale for the risk adjustment necessary to render present value is left to the unique evidence in each case. Commercial real estate cases are very different from Chapter 13s involving used trucks. Till cannot be properly read for the proposition that a debtor gets away with an unreasonable discount just because some courts, as noted in Till, have used a 1-3% adjustment over prime rate. North Valley Mall, 432 B.R. at 831. Instead, in the commercial real estate context the court favors the approach used in Pacific First Bank v. Boulders on the River, Inc. (In re Boulders on the River, Inc.), 164 B.R. 99, 105 (9th Cir BAP 1994). As explained in the North Valley Mall opinion, a cramdown rate can be imputed by reference to market data and then built up or blended. One starts by survey comparison to a market rate representing what real lenders in the loan markets are doing on similar properties for similar terms. Usually this represents only say 65% of the value of the collateral, as seldom will new loans be made at 100% of value. The remaining 35% is then blended from mezzanine rates and hypothetical equity return rates to yield an overall blended rate that more nearly represents compensation for the degrees of risk inherent in the transaction. Debtors analysis contains none of these elements, nor, frankly, do creditors. But the court is quite certain that 2.25% -2.97% over Index, [which is around 2.5%-3% if .26%, the current one year treasury average, is used as the Index] interest only, for a period of five years, and then reverting to a rate of 4.57% per annum fixed for a thirty year term [as is suggested in the plan] is way too low, probably on the order of 300-350 basis points too low. It should be noted that even in this environment of historically low (probably artificially low) interest rates, 4.57% without points would be somewhat low even for a conforming loan, much less an extremely leveraged and risky transaction as is proposed here. Cramdown at such a low rate in effect shifts uncompensated risk to the dissenting lenders and results in a present value well less than the value of the collateral/secured claim. This is not permitted under 1129(b)(2)(A). Hearing Room 5B
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Cont.... T Muthu Kumar 2. Feasibility Chapter 11 Hearing Room 5B
Debtor must also prove that confirmation will not be followed by unplanned need for further reorganization or liquidation, or in common parlance, feasibility. 1129(a)(11) Here the debtor offers the curious declaration of the debtor. He says the projections are reasonable but the court has only Exhibit 2 to the Disclosure Statement as projections. Normally, one would expect some kind of Excel spreadsheet with rents less reasonable operating expenses and debt service deducted, showing positive bottom-line numbers for each property. If any such projections were prepared the court has not seen them. Instead we have an abbreviated spreadsheet with expenses not broken down and apparently reflecting only debtors personal family expenses, and not separately for each of the rental properties. If adjusted for any reasonable debt service it appears that expenditures would exceed revenue by a rather large margin. Even as is, the revenue just about barely matches expenses each month with very little room for error. 3. Modification of Residential Loan The plan is left very vague regarding treatment of Class 8, which reportedly is the debtors residence commonly known as 226 Finca, San Clemente. There are reportedly $26,064 in arrearages on this $571,184 loan. The plan in its modified form provides that these arrearages will be paid over 5 years in equal semi-annual installments. This is supposed to be a cure of the defaults under this loan which might qualify it for being unimpaired as described at 1124(2)(A)(D). Objecting creditor contends, instead, that this is an impermissible modification of the loan within the meaning of 1123(b)(5). Since no interest upon the arrearages is discussed for the 5-year term of this cure, it is manifestly insufficient to compensate the creditor for damages incurred as required under 1124(2)(C). See Great W. Bank & Trust v. Entz-White Lumber & Supply (In re Entz-White Lumber & Supply), 850 F. 2d 1338, 1340 (9th Cir 1988). Nor can payments spread out over five years without interest be the equivalent of immediate payment, and therefore must be regarded as economically less than equivalent. It is therefore not necessary to deal with the more troublesome issue of whether impairment or no, this would represent an impermissible modification of the loan since Chapter 11 has no precise analog of 1322(b)(5) and the proposed cure is well beyond the effective date of the plan which was the date of cure allowed in Entz-White.
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Cont.... T Muthu Kumar 4. Conclusion Chapter 11 Hearing Room 5B
The plan as modified is still a long way from being confirmable. The court is unclear as to whether debtor will be able to amend it to be confirmable within debtors available means. The court will therefore hear argument as to whether debtor should be given another opportunity to come up with something that might pass muster as an alternative to conversion, and/or whether leave should be granted for the lenders to obtain their own appraisals of value. Party Information Debtor(s): T Muthu Kumar
Represented By
Michael G Spector Vicki L Schennum Movant(s): T Muthu Kumar

Represented By
Michael G Spector Vicki L Schennum
2/28/2012
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-11268 #9.00 Sandra A Robbie Chapter 11 Docket #: 51 Hearing Room 5B
Approval of Debtor's Disclosure Statement
Tentative Ruling:
The Court is skeptical about this plan. As the UST observes, it appears to be all about litigation against the two secured claims with the single, small unscured creditor merely a sideshow. This raises profound good faith issues and prompts the Court to consider abstention or dismissal. If everything is a function of litigation, why not determine this in the Superior Court or in Federal District Court. Continue to coincide with hearing on motion to dismiss on April 26, 2012.
Party Information Debtor(s): Sandra A Robbie
Represented By
Catherine Christiansen Alexandria C. Phillips
2/28/2012
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-12662 #10.00 GPS Painting & Wallcovering, Inc. Chapter 11 Hearing Room 5B
Confirmation of Chapter 11 Small Business Plan (cont'd from 12-14-11)

Docket #: 117
Tentative Ruling: Tentative for 2/29/12: Has any of objection, temporary allowance or cramdown evaluation occurred? Absolute priority rule? ----------------------------------------------------Tentative for 12/14/11: Creditor Southern California Painting & Drywall Industries Trust Funds (Funds) has a priority claim in Class 2.1 and a general unsecured claim in Class 3. One ballot was apparently cast for both classes. Debtor states that it intends to file an objection to Funds claim prior to the plan confirmation hearing, so that Funds will have to get its claim temporarily allowed for voting purposes for the vote to count. In the event a section 507(a)(5) claim is allowed in Class 2.1, Debtor states that the claim will be paid in full on the effective date or when the objection is determined by a final order. Thus, the only issue is the general unsecured claim. If Funds claim is counted for confirmation purposes, then there will be an absolute priority issue because unsecured creditors are not being paid in full and the equity holder is retaining his interest. Debtor states that the equity holder will tender new value if necessary. A separate analysis of that offer will become necessary. Everything seems to be in order except for the cram down analysis. An objection to the Funds claim has not been filed as of 12/9/11. Additional analysis of the absolute priority rule issue may become necessary. Continue for purposes of claim objection, temporary allowance motion and cramdown evaluation. Party Information
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Cont.... GPS Painting & Wallcovering, Inc. Debtor(s): GPS Painting & Wallcovering, Inc.
Represented By
Hearing Room
5B
Chapter 11
R G Pagter Misty A Perry Isaacson Movant(s): GPS Painting & Wallcovering, Inc.
Represented By
R G Pagter Misty A Perry Isaacson
2/28/2012
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-19154 #11.00 Patrick Merritt and Heidi Merritt Chapter 11 Hearing Room 5B
Motion to Approve Second Amended Disclosure Statement filed 1-23-12, document number 50
Docket #: 48
Tentative Ruling: This is the debtors motion for approval of their Disclosure Statement. It has drawn limited objection by the holder of the first mortgage, The Bank of New York Mellon. The plan described in this disclosure statement is problematic on several issues. First, the bank argues that the proposed cram down interest rate of 4.25% per annum is too low, citing this courts opinion in In re North Valley Mall, 432 B.R. 825 (Bankr. C.D.Cal. 2010). The bank is correct. While commercial properties as in North Valley Mall are not necessarily the exact analog of residential properties, as in this case, it is abundantly clear that 4.25% on a property without any equity, is way too low to yield present value equal to the secured claim under 1129(b)(2)(A)(i). The debtor should do some analysis as to what a suitable cram down interest rate might be. This will involve evidence as to the percentage of equity available behind the complaining creditor, market conditions generally of both conforming and non-conforming loans, and some analysis of what a blended rate analysis as in North Valley Mall might yield for those portions outside what a willing lender might do. Although it seems to be the case, no analysis is offered as to whether this is the debtors principal residence. If so, the additional problem of 1123(b)(5) is presented. How can the debtors modify the rights of such a lender? The problem appears more acute respecting the rights of the junior loan of Bank of America. To the extent that any portion of this loan is secured by the residence (and apparently it is), no modification of the loan is permitted. See Nobleman v. American Savings Bank (In re Nobleman), 508 U.S. 324, 113 S. Ct. 2106, 2109-10 (1993). The debtor also makes an oblique reference to the absolute priority rule at the end of the disclosure statement but dismisses it as complicated. In the event of objection by any affected creditor, this plan is not confirmable as written without an injection of new value. See 11 U.S.C. 1129(b)(2)(B)(ii); In re Kamell, 451 B.R. 505 (Bankr. C.D.Cal. 2011). NO mention of this can be found anywhere in this plan or disclosure. Normally, the court reserves confirmation issues for a confirmation hearing; but the issues here are so profound as to invoke that line of cases that instructs courts to deny approval of disclosure on a plan that is unconfirmable on its face. The court will hear argument as to whether this is such a case.
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Cont.... Patrick Merritt and Heidi Merritt No tentative. Party Information Debtor(s): Patrick Merritt
Represented By
Hearing Room
5B
Chapter 11
Matthew E Faler Joint Debtor(s): Heidi Merritt

Represented By
Matthew E Faler Movant(s): Heidi Merritt Patrick Merritt

Represented By
Matthew E Faler
Represented By
Matthew E Faler
2/28/2012
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-20818 #12.00 Bert Briones and Robin Lynn Briones Chapter 11 50 Hearing Room 5B
Application for Order Extending Date for Filing Chapter 11 Plan

Docket #:
Tentative Ruling:
Debtor does not make a compelling case as to why the original deadline should be moved. As an insolvency lawyer, debtor is in a better position than most to understand the issues and propose solutions with a minimum of delay. Even giving some credibility to the reasons offered, six months is too long. Chapter 11 is not an indefinite respite, it is only a temporary opportunity to propose a solution if one is reasonably available. Debtors are expected to make best use of the time given, and afterwhile further delay begins to look like an end in itself, which is not tolerated. Grant 30 day extension to April 1.
Party Information Debtor(s): Bert Briones Joint Debtor(s): Robin Lynn Briones
Represented By
Bert Briones Movant(s): Bert Briones Robin Lynn Briones

Represented By
Bert Briones
2/28/2012
1:37:31PM
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-20818 #13.00 Bert Briones and Robin Lynn Briones Chapter 11 52 Hearing Room 5B
Motion of Debtors for Order Disallowing Claim Numbered 9.

Docket #:
Tentative Ruling:
Sustain. Appearance is optional.

Party Information Debtor(s): Bert Briones Joint Debtor(s): Robin Lynn Briones
Represented By
Bert Briones
2/28/2012
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-20432 #14.00 Mike E Nerhus and Tomi A Nerhus Chapter 11 Hearing Room 5B
Debtor's Objection to Proof Of Claim #10 Filed by Creditor Bank of New York Mellon as Trustee
Docket #: 66
Tentative Ruling: This is an objection to claim filed by the debtors. The claim in question is the proof filed 10/11/2011 by The Bank of New York Mellon as trustee for certain certificate holders in the amount of $501,473.02 plus $17,124.75 in arrearages, and secured by the debtors property commonly known as 4892 Kermath Street, Placentia, CA. The objection is some 29 pages long and is supported by a declaration of one Maher Soliman of another 47 pages. The objection is virtually unintelligible and filled with numerous undefined acronyms, all purporting to raise some kind of an issue about the veracity of the debt or the validity of the claimant as current holder of the debt. This is not dissimilar to other challenges the court has recently seen by debtors to the efficacy of their mortgages arising out of the real estate finance meltdown. The reply by debtors seems to distill the argument into something about the debt being written off or written down by reason of actions of various prior holders, or the fact that certificates may have traded at a steep discount. Of course, even if true none of this is an issue respecting the obligation of the borrowers to repay. But debtor seems to aim all of this somehow at the standing of the claimant to collect the debt. The court also observes that there is no dispute that the debtors actually borrowed the money, and there does not appear to have been for some years now any rival claimant to repayment as indeed the debtor even acknowledged the name and address of the creditor, and the approximate amount owing, in their schedules. How all of this can now amount to getting a home free and clear is not explained, of course, but nevertheless debtor unleashes a barrage of legalistic arguments. But the court is not inclined to attempt unraveling this dispute in a summary proceeding such as a claims objection hearing. If this question is to be pursued it must be in the context of an adversary proceeding, with complaint and then answer or Rule 12(b) motion. Discovery may be needed and maybe a trial as well. But it cannot reasonably be done in a summary proceeding like this. If it gets that far, debtor will need to refine their explanation into something concise and intelligible.
Deny without prejudice to renewal as an adversary proceeding.
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Cont.... Mike E Nerhus and Tomi A Nerhus Party Information Debtor(s): Mike E Nerhus
Represented By
Hearing Room
5B
Chapter 11
Catherine Christiansen Joint Debtor(s): Tomi A Nerhus

Represented By
Catherine Christiansen
2/28/2012
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-20432 #15.00 Mike E Nerhus and Tomi A Nerhus Chapter 11 Hearing Room 5B
Debtor's Objection to Proof of Claim #9 Filed by Creditor U.S. Bank as Trustee

Docket #: 64
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Page 24 of 32

Represented By
Hearing Room
5B
Chapter 11

Represented By
2/28/2012
1:37:31PM
Page 25 of 32

Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-20432 #16.00 Mike E Nerhus and Tomi A Nerhus Chapter 11 62 Hearing Room 5B
Debtor's Objection to Proof Of Claim #2 Filed by Creditor PNC Bank

Docket #:
2/28/2012
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Page 26 of 32

Represented By
Hearing Room
5B
Chapter 11

Represented By
2/28/2012
1:37:31PM
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-12676 #17.00 Bobby J Hamby Chapter 11 Hearing Room 5B
Debtor's Motion for approval of chapter 11 disclosure statement (cont'd from 12-7-11)
Docket #: 112
Tentative Ruling:
Tentative for 2/29/12: It appears that most if not all of the objections of the UST have been addressed. The two additional objections of Sykes and Yorba Linda Group seem to deal with settlements that are finalized, or close to being finalized. Consequently, some discussion of these terms and an explicit reference that the settlement terms govern over any different that might otherwise apply, would be appropriate. Lastly, the disclosure statement should clarify that Class 2(a) repayment of arrearages over time is without interest, and so is impaired. Approve with these clarifications. ----------------------------------------------------------------Tentative for 12/7/11: Each of the U.S. Trustee's objections is well taken and should be addressed in an amended disclosure statement. While many of the Sykes Family Trust comments are either confirmation issues, or the relevancy to disclosure is not clear, one point is clear. There is an absolute priority rule issue implicit here if debtor proposes to keep his chiropractor practice. See In re Kamell, 451 B.R. 505 (Bankr. C.D. Cal. 2011).
Party Information Debtor(s): Bobby J Hamby
Represented By
James D Zhou Movant(s): Bobby J Hamby

Represented By
James D Zhou
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Cont.... Bobby J Hamby Chapter 11 Hearing Room 5B
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Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-12676 #18.00 Bobby J Hamby Chapter 11 Hearing Room 5B
Debtor's Motion RE: Objection to Claim Number 10,24 by Claimant Sykes Family Trust.
Docket #: 146
Tentative Ruling:
Has this been resolved by settlement?

Represented By
James D Zhou Movant(s): Bobby J Hamby

Represented By
James D Zhou
2/28/2012
1:37:31PM
Page 30 of 32

Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am 8:11-12676 Bobby J Hamby Yorba Linda Group Limited Partnership, Donald A. B v. Hamby Chapter 11 Adv#: 8:11-01260 #19.00 Hearing Room 5B
PRE-TRIAL CONFERENCE re: Complaint to determine nondischargeability of debt. (cont'd from 12-8-11)
Docket #: 1
Tentative Ruling:
Tentative for 2/29/12: Has this matter been settled? ------------------------------------------------Tentative for 12/8/11: Settled? -------------------------------------------------Tentative for 8/25/11: Deadline for completing discovery: November 1, 2011 Last date for filing pre-trial motions: November 21, 2011 Pre-trial conference on: December 8, 2011 at 10:00 a.m. Joint pre-trial order due per local rules. Refer to mediation. Order appointing mediator to be lodged by plaintiff within 10 days. One day of mediation to be completed by December 1.

Represented By
James D Zhou Defendant(s):

2/28/2012 1:37:31PM Page 31 of 32

Santa Ana Judge Theodor Albert, Presiding Courtroom 5B Calendar Wednesday, February 29, 2012 10:00 am Cont.... Bobby J Hamby Defendant(s): Bobby J Hamby
Represented By
Hearing Room
5B
Chapter 11
James D Zhou Plaintiff(s): Yorba Linda Group Limited

Represented By
Brandon R Creel U.S. Trustee(s): United States Trustee (SA)
2/28/2012
1:37:31PM
Page 32 of 32

Judge Theodor Albert Calendar For 29 Feb 2012

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Judge Theodor Albert Calendar For 29 Feb 2012

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United States Bankruptcy Court Central District of California

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Sustain. Appearance is optional.

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Deny without prejudice to renewal as an adversary proceeding.

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Debtor's Objection to Proof of Claim #9 Filed by Creditor U.S. Bank as Trustee

Deny without prejudice to renewal as an adversary proceeding.

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Catherine Christiansen Joint Debtor(s): Tomi A Nerhus

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Debtor's Objection to Proof Of Claim #2 Filed by Creditor PNC Bank

Deny without prejudice to renewal as an adversary proceeding.

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