ILC publishes write-up by Danning Gill Partner John N. Tedford, IV on Perryman v. Dal Poggetto (In re Perryman), 631 B.R. 899 (9th Cir. BAP 2021)

December 16, 2021

Dear constituency list members of the Insolvency Law Committee:

The following is a case update written by John N. Tedford, IV, a partner at Danning, Gill, Israel & Krasnoff, LLP, analyzing a recent decision of interest.

In Perryman v. Dal Poggetto (In re Perryman), 631 B.R. 899 (9th Cir. BAP 2021), the U.S. Bankruptcy Appellate Panel of the Ninth Circuit (the “BAP”) held that continuances of a hearing in a prepetition, nonbankruptcy action against the debtor, whether ordered by the state court, done by the clerk, or requested by a creditor, merely maintains the status quo and does not violate the automatic stay.

Here’s a link to the write-up on the CLA website:  click here.

To read the full published decision, click here.

 

ILC publishes write-up by Danning Gill Partner John N. Tedford, IV on Amendments to the Federal Rules of Bankruptcy Procedure and the Federal Rules of Appellate Procedure

December 7, 2021

Dear constituency list members of the Insolvency Law Committee:

The following is an update written by John N. Tedford, IV, a partner at Danning, Gill, Israel & Krasnoff, LLP, highlighting December 1, 2021 Amendments to the Federal Rules of Bankruptcy Procedure and the Federal Rules of Appellate Procedure.

In April 2021, the Supreme Court submitted to Congress proposed revisions to the Federal Rules of Bankruptcy Procedure (“FRBP”) and the Federal Rules of Appellate Procedure (“FRAP”). Because Congress did not reject or defer the proposed amendments, the proposed revisions went into effect on December 1, 2021.

The entire package of materials transmitted to Congress may be accessed here.  Some of the proposed revisions are listed below.

      • Amended FRBP 3007(a)(2)(A)(ii) – Service of Claim Objections on Insured Depository Institutions
      • Amended FRBP 9036 – Service by Electronic Transmission
      • Other Conforming Amendments to the FRBP
      • Amended FRAP 3(c)(1)(B) and New FRAP 3(c)(4) and (6) – Contents of the Notice of Appeal (Generally)
      • New FRAP 3(c)(5) – Contents of the Notice of Appeal (Summary Judgment Orders Resolving Remaining Claims, and Orders on Motions for Reconsideration)
      • Amended FRAP 3(c)(7) (formerly (c)(4)) – Notices of Appeal that Designate Only Interlocutory Orders

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

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.

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

M&A Advisor Turnaround Awards Recognizes Danning Gill

Danning, Gill, Israel & Krasnoff, LLP and its Managing Partner, Eric Israel, were recognized in the Restructuring of the Year ($10 million to $50 million) category of the 15th Annual M&A Advisor Turnaround Awards. The recognition is in connection with the firm’s representation of the trustee in the Chapter 11 reorganization of HVI Cat Canyon.

Other firms recognized for their work on the HVI matter were CR3 Partners, Huron Consulting, Kelly Hart, TenOaks Energy Advisors, O’Melveny & Meyers, and Pachulski Stang Ziehl & Jones.

The Annual M&A Advisor Turnaround Awards recognize the leading distressed transactions, restructurings, refinancings, products and services, firms, and professionals in the United States and international markets. The awards will be presented live during the 15th Annual Turnaround Awards Gala on September 29, 2021 during the annual Distressed Investing Summit in New York City.

LA Business Journal—Danning Gill Partners Participate in Bankruptcy & Restructuring Roundtable Discussion

Los Angeles Business Journal
July 26, 2021

Despite significant worldwide economic challenges caused by the Covid-19 pandemic, bankruptcy filings have been somewhat inconsistent.  While consumer cases were largely down, the number of Chapter 11 bankruptcy filings in 2020 has been the highest since 2010—a trend some expect to continue in the coming year.

To better explain current trends facing restructuring and bankruptcy filings, and the options available for businesses experiencing financial difficulties, the Los Angeles Business Journal interviewed Danning Gill Partners Uzzi Raanan and John Tedford.  The two identify opportunities distressed companies may have to bring their businesses and finances back on track in an economy that appears to be making a comeback.

Here’s the link to the Business Journal’s website/article:

 LABJ BankruptcyRoundTable.

Aaron E. de Leest prevails in the Ninth Circuit in a published decision

Danning Gill attorney, Aaron E. de Leest, prevails in the Ninth Circuit in a published decision on an issue important to Danning Gill’s trustee and debtor clients.  In its decision, the Ninth Circuit held that the doctrines of issue preclusion and claim preclusion can be applied to deny a debtor’s amended claims of exemption.  The Ninth Circuit went on to add that:

“[t]o hold otherwise would not only undermine the finality of exemption orders, but would considerably frustrate the trustee’s duty to expeditiously close the debtor’s estate. Debtors can amend their exemptions as a matter of course, Fed. R. Bankr. P. 1009(a), so if orders denying exemptions carry no preclusive weight, debtors could delay matters by claiming the same property as exempt time and time again. Debtors could also decline to meaningfully press their claims, and creditors would bear the brunt of such behavior, as the relitigation of resolved issues would drain estate—not to mention judicial—resources. Those burdens are precisely what the preclusion doctrines were designed to avoid, and they remain available to the bankruptcy courts when ruling on previously denied claims” (internal case citations omitted).

A link to the Ninth Circuit’s decision is here: https://cdn.ca9.uscourts.gov/datastore/opinions/2021/06/10/20-60006.pdf

 

Sarah Danning — First Woman Bankruptcy Trustee in the Central District

LABF CELEBRATES WOMEN IN BANKRUPTCY

As Women’s History Month Comes to a Close, LABF Honored and Recognized Some of the Women Trailblazers in our Bankruptcy Community Who Opened the Door and Set the Path for Today’s Women Practitioners.

FIRST WOMAN BANKRUPTCY TRUSTEE IN THE CENTRAL DISTRICT

Sarah Danning was the country’s and the district’s first female bankruptcy trustee.

Danning began practicing law in Los Angeles a year after she graduated from USC Law School in 1923. In her later years, she recalled the gender discrimination she experienced early in her career, revealing advice she received while applying for her first legal jobs: Never tell any prospective hiring law firm that she was able to type, as law firms were likely to give her secretarial work rather than legal work.

One of her first jobs was with The Local Loan Company in Los Angeles. She later had an office in the Subway Terminal Building, which opened in Downtown Los Angeles in 1925 (designated Los Angeles historic cultural monument #177). She entered the practice of bankruptcy and became the country’s first female bankruptcy trustee.

One of six siblings, she passed her commitment to bankruptcy law on to her brother, Curtis Ben Danning. 17 years her junior, Mr. Danning later became one of the founders of the Danning Gill firm. Sarah Danning worked well into her 80s. After retiring from her practice as trustee, she made weekly visits to the Danning Gill offices, where she drafted wills for her own clients. A Danning Gill staff member who befriended Ms. Danning recalled her as a “spitfire” who always spoke her mind. Another member of the firm described her as “an exceptional woman, intelligent, humorous and kind.”

Sarah Danning was honored by the State Bar in 2003, when Ben Danning accepted certificates acknowledging the siblings’ respective 50 and 75 years of practice, as told in this State Bar posting: click here. Ms. Danning passed away later that year at the age of 100.