ILC publishes write-up by Danning Gill Partner Zev Shechtman on In re Weinstein Co. Holdings LLC, 997 F.3d 497 (3d Cir. 2021) — A case involving a work-for-hire contract

November 19, 2021

Dear constituency list members of the Insolvency Law Committee:

The following is a case update written by Zev Shechtman, a partner at Danning, Gill, Israel & Krasnoff, LLP, analyzing a recent decision of interest.

In re Weinstein Co. Holdings LLC, 997 F.3d 497 (3d Cir. 2021) involved a work-for-hire contract between The Weinstein Company—a bankrupt movie company—and Bruce Cohen, the producer of the critically acclaimed 2012 film, Silver Linings Playbook. The United States Court of Appeals for the Third Circuit held that the contract was not an executory contract, affirming the decision of the Delaware district court, which affirmed the decision of the Delaware bankruptcy court.

Here’s a link to the writeup on the CLA website:  click here.

To read the full published decision:  click here.

Another Small Business Reorganization Success Story from Danning Gill

Attorneys at Danning, Gill, Israel & Krasnoff, LLP, successfully obtained confirmation of a contested chapter 11 plan of reorganization for another small business debtor (Subchapter V) client in the case of J.H. Bryant, Jr., Inc.  Confirmation of the plan enabled Danning Gill’s client to continue its ongoing business operations and employment of 85 full-time employees.  Aaron E. de Leest led the team at Danning Gill with assistance from attorneys Zev Shechtman, Michael D’Alba and Alphamorlai L. Kebeh.

Small Business Reorganization Success Story

Attorneys at Danning, Gill, Israel & Krasnoff, LLP, obtain decisive wins for their small business debtor (Subchapter V) client in the case of Brett Arthur Butler.  Danning Gill prevailed in a valuation trial and separately confirmed its client’s contested small business debtor chapter 11 plan of reorganization.  During the course of the case Danning Gill also successfully defended a challenge to its client’s designation as Subchapter V small business debtor and a motion to convert the case to one under chapter 7.  Aaron E. de Leest led the team at Danning Gill with vital assistance from attorneys Zev Shechtman, Uzzi O. Rannan and Alphamorlai L. Kebeh.

To read Order Confirming Debtor’s First Amended Chapter 11 Plan of Reorganization, click here.

Fight over ‘The One’ mega-mansion heads to Bankruptcy Court

Los Angeles Times
October 27, 2021

The Los Angeles Times reported “The One” mega-mansion was pulled Wednesday, October 27 from the auction block, one day after the developer’s limited liability company filed for Chapter 11 bankruptcy protection to stop the sale.

The 105,000-square-foot Bel-Air mansion was set to go to the highest bidder at a trustee’s sale outside Los Angeles County Superior Court in Pomona after developer Nile Niami’s Crestlloyd defaulted on $106 million in debt owed to Hankey Capital, Los Angeles billionaire Don Hankey’s real estate lending business.

Crestlloyd was placed into bankruptcy protection Tuesday afternoon in what proved to be a successful last-minute bid to block the foreclosure sale, moving — at least temporarily — a high-stakes fight between the developer and multiple feuding lenders to U.S. Bankruptcy Court in Los Angeles.

The disposition of the largest modern home in the country — once marketed for $500 million and the magnum opus of Niami, dubbed the king of the L.A. mega-mansion — now goes before Bankruptcy Judge Deborah Saltzman, a 12-year-veteran of the bench.

Danning Gill Partner John Tedford, who worked for a client involved in another foreclosure dispute with Hankey Capital, told the Los Angeles Times that the bankruptcy case was unusual because it involved a single-family residential property with a value more typical of commercial real estate.

That means the effort to persuade the judge to keep the case in Chapter 11 and not allow the foreclosure sale to proceed will focus on convincing her that there is adequate value in the property to ensure Hankey Capital is repaid what it is owed.

“If the property is worth less than Hankey Capital is owed, the judge is more likely to allow Hankey to proceed with its foreclosure,” he said. “It becomes a battle of experts — Crestlloyd’s appraiser versus Hankey Capital’s appraiser — with the judge somehow having to decide how much this unique property is worth.”

If Crestlloyd makes interest payments on Hankey’s debt — which it may or may not be required to do — that also would be a factor in the judge‘s decision, he said.

To read the full article, click here:

https://www.latimes.com/business/story/2021-10-27/the-one-megamansion-nile-niami-bankruptcy-foreclosure-crestlloyd-hankey

Auction of ‘The One’ — L.A.’s biggest new mansion — delayed amid allegations of a power grab

Los Angeles Times
October 14, 2021

A planned foreclosure auction of the largest modern home in the country has been delayed after billionaire lender Don Hankey was accused of maneuvering to take control of the troubled Bel-Air project and leave other debt holders out in the cold.

“The One,” a 105,000-square-foot unfinished mansion once marketed for $500 million, had been set to be sold to the highest bidder Wednesday. The auction was scheduled after developer Nile Niami’s limited liability company, Crestlloyd, defaulted on $106 million owed to Hankey’s real estate lending arm.

But a Los Angeles County Superior Court judge delayed the trustee’s sale until later this month after lender Joseph Englanoff alleged that Hankey reneged on an agreement to have the house completed and sold by real estate brokers, and instead was using the auction process to unfairly take ownership of the mansion or hog the proceeds if it is sold to a third party.

Englanoff, a Los Angeles-area physician and real estate investor who lent $30.2 million to Crestlloyd in 2018 through his Yogi Securities Holdings, states in legal filings that he is still owed $22 million.

Danning Gill Partner John Tedford who worked for a client involved in a dispute with Hankey in another foreclosure case, said he did not think Englanoff would prevail with the argument that Hankey’s entire debt is subordinate to Yogi. However, he said the additional loans were another issue.

“The junior lienholders probably have a good argument that their liens are senior to the new stuff,” said Tedford, who is not involved in the dispute involving The One.

Tedford also told the Los Angeles Times that foreclosure sales typically leave little to nothing for junior lienholders and one possibly requiring a cash bid of $100 million or more could be particularly challenging to draw high bidders.

“What sort of Brinks truck is going to pull up with a briefcase full of cashier’s checks for over one hundred million bucks?” he quipped.

To read the full article, click here:  https://www.latimes.com/business/story/2021-10-13/the-one-mansion-auction-delayed

ILC publishes write-up by Danning Gill Partner Uzzi Raanan on In re Bohrer (Bankr. S.D. Cal.) – A case of first impression dealing with the discharge exception under 11 U.S.C. section 523(a)(15)

October 4, 2021

Dear constituency list members of the Insolvency Law Committee

The following is a case update written by Uzzi O. Raanan, a partner at Danning, Gill, Israel & Krasnoff, LLP, analyzing a recent decision of interest:

Deciding a previously unresolved issue, United States Bankruptcy Judge Christopher B. Latham, of the Southern District of California, held that a legal fee award entered in a civil action that is litigated parallel to and intertwined with ongoing dissolution proceedings comes within the scope of a discharge exception under 11 U.S.C. section 523(a)(15), in that it is “in the course of a divorce or separation” or “in connection with [an]… other order of a court of record.” In re Bohrer, 2021 WL 1915991 (Bankr. S.D. Cal. 2021).

Here’s a link to the writeup on the CLA website:  click here.

To read the full opinion, click here.

Danning, Gill, Israel & Krasnoff, LLP Welcomes Back Danielle R. Gabai

Danning Gill welcomes back Danielle R. Gabai who previously joined the firm as a student law clerk.  Danielle is a 2021 graduate of USC Gould School of Law, where she served as President of the Jewish Law Students Association and received her Business Law Certificate.

Prior to law school, Danielle received her  B.A. in Business Administration, minor in Finance from the Interdisciplinary Center Herzliya (IDC) in Israel.

At the firm, Danielle assists with the representation of debtors, creditors, and trustees in chapter 7 and chapter 11 cases.

Partners Eric Israel and Zev Shechtman named Legal Visionaries in the Los Angeles Times’ Business of Law issue

Danning, Gill, Israel & Krasnoff, LLP Partners Eric Israel and Zev Shechtman have been recognized as Legal Visionaries in the Business of Law in the inaugural issue of the Business of Law: Trends, Updates, Visionaries & In-House Counsel Leadership Awards published by the Los Angeles Times. Eric serves as the firm’s managing partner and Zev serves as the partner responsible for recruiting and marketing. Both are recognized leaders in the bankruptcy bar and are sought out as counsel in complex business bankruptcies.

Here’s the link to the Los Angeles Times’ article/website.

 

Commercial Finance Newsletter (CFN) publishes a writeup by Danning Gill Partner Uzzi Raanan on the Ninth Circuit BAP’s recent decision in In re Lockhart-Johnson

Westlaw’s CFN recently published a write-up by Danning Gill Partner Uzzi Raanan about In re Lockhart-Johnson, 2021 WL 3186115 (B.A.P. 9th Cir. 2021). Deciding a previously unresolved issue, the Ninth Circuit Bankruptcy Appellate Panel held that, to assert a nondischargeability claim against the non-filing spouse of a debtor, a plaintiff must affirmatively obtain a nondischargeability determination by commencing an adversary proceeding against the non-debtor spouse within 60 days after the meeting of creditors.

The BAP acknowledged that neither the Federal Rules of Bankruptcy Procedure nor other courts had previously addressed how a creditor can assert its community claim when nondischargeable acts were committed by the non-filing spouse, or “expressly provide[d] the procedure for asserting hypothetical nondischargeability or objections to discharge under § 524.”

The full write up can be found on Westlaw: click here.

Danning Gill Partner Uzzi Raanan Contributes to Annual Review of Bankruptcy Case Law Published by the Business Law News (BLN)

As it does each year, the Business Law Section (BLS) of the California Lawyers Association (CLA) recently published in its Business Law News (BLN) an update on developments affecting insolvency and commercial finance law in California and the Ninth Circuit. Partner Uzzi Raanan contributed to this project a number of case law summaries discussing bankruptcy and related state law issues, and edited the summaries written by other contributors. A copy of the article can be found here.