Mark One Corporation

[2] FOR PUBLICATION [4] UNITED STATES BANKRUPTCY COURT [5] EASTERN DISTRICT OF CALIFORNIA [9] In re ) Case No. 16-90603-E-7 10 ) Docket Control No. DB-3 MARK ONE CORPORATION, ) 11 ) Debtor. ) 12 ) 13 MEMORANDUM OPINION AND DECISION MOTION FOR SUPPLEMENTAL ORDER IDENTIFYING 14 ASSETS SOLD BY CHAPTER 7 TRUSTEE 15 Burger Physical Therapy Services (“Burger PTS”) requests this court issue a supplemental 16 order to the court’s earlier order approving the settlement agreement between Chapter 7 Trustee 17 Irma Edmonds and John C. Sims, individually and as Trustee of the G&M Baker 1994 Trust 18 regarding Trustee’s Preference Claim against Sims. The request for such a supplemental order is 19 provided for in this court’s order remanding the Burger Physical Therapy Services, Inc. v. Sims 20 adversary proceeding back to state court. 17-9021; Order, Dckt. 69. 21 An Involuntary Bankruptcy Petition was filed against Mark One Corporation (“Debtor”) on 22 July 8, 2016. Dckt. 1. There were two petitioning creditors commencing the involuntary bankruptcy 23 case - Burger PTS and Wescom Solutions, Inc. Id. at 2-4. On August 5, 2016, a stipulation to the 24 entry of the order for relief in this case was filed (Dckt. 6) and the order for relief was entered 25 (Dckt. 8). 26 The present Motion was filed on May 7, 2020, proper notice provided pursuant to Local 27 Bankruptcy Rule 9014-1(f)(1), Opposition and Responsive Pleadings filed, and final argument was 28 presented to the court on August 6, 2020. 1 HISTORY OF COURT GRANTING MOTION FOR CHAPTER 7 TRUSTEE TO SELL ASSETS AND RIGHTS 2 OF THE BANKRUPTCY ESTATE TO JOHN SIMS 3 On January 31, 2018, Irma Edmonds, the Chapter 7 Trustee (“Trustee”), requested that the 4 court approve a compromise and settle competing claims and defenses with John Sims, individually 5 and as trustee of the G&M Baker 1994 Trust (“Sims/Baker Trustee”), and the sale of said claims to 6 Sims/Baker Trustee (“Motion to Approve Settlement and Sale”). 7 After parties provided the court with supplemental pleadings addressing specific issues 8 identified by the court, the Motion to Approve the Settlement and Sale was granted. The terms of 9 the Settlement and sale were modified in the order granting that motion, which expressly states that 10 Burger PTS’s claims against Sims/Baker Trustee, if any, were not transferred by the Trustee, and 11 therefore not included in the Settlement. Order, Dckt. 100. 12 In the Civil Minutes from the hearing on the Motion to Approve Settlement and Sale, the 13 court addressed that further proceedings might be required in this court. The court further noted that: [14] In remanding and abstaining, this court recognizes that it could 15 exercise federal court jurisdiction for this determination. Out of further regard for the State Court judge to whom the matter is 16 remanded, if that judge determines that such issues should properly be determined by a federal court judge, this court will exercise such 17 jurisdiction if the State Court judge orders the parties to obtain such determination by supplemental motion for determination of the rights 18 transferred by the Chapter 7 Trustee under the Settlement and what rights, if any, were not transferred (or such other proceeding as 19 [Burger PTS] and [Sims/Baker Trustee] determine proper). 20 16-90603, Civil Minutes at p. 14, Dckt. 99. 21 Burger PTS comes now and makes the present Motion pursuant to the court’s order on the 22 Motion for Remand in the Adversary Proceeding. In that order the court provided that in the event 23 the State Court judge requires this court to determine the rights and property of the parties involved, 24 such determination may be sought by motion: [25] If the State Court judge concludes that determination of this federal 26 court of what rights and property were acquired by Defendants from the Chapter 7 Trustee is necessary, in that State Court judge’s 27 opinion, upon order of said State Court judge, [Burger PTS] and [Sims/Baker Trustee] may seek such determination by motion for 28 supplemental order to the Order Approving the Settlement or such 1 other federal court proceeding as proper under the Federal Rules of Bankruptcy Procedure. [2] 3 17-09021, Order, Dckt. 69. [4] REVIEW OF MOTION FOR SUPPLEMENTAL ORDER 5 AND OPPOSITION THERETO 6 The present Motion begins with a recitation of the prior Motion to Approve the Settlement 7 and Sale between the Chapter 7 Trustee and Sims/Baker Trustee, and this court’s Order granting that 8 Motion. Burger PTS reviews this court’s earlier order relating to Burger PTS’s prior motion for a 9 supplemental order, which was denied without prejudice. In denying the prior motion, the court 10 ordered Burger PTS to focus a subsequent motion for supplemental order on the claims stated in its 11 First Amended Complaint (“First Amended Complaint”), the now current complaint, in Burger 12 Physical Therapy Services, Inc. v. Sims, California Superior Court, for the County of Stanislaus, 13 Case No. 2027597 (“State Court Action”). Motion, p. 1:21-28, 2:1; Dckt. 181. 14 The grounds stated with particularity in the present Motion are: 15 1. “Burger may pursue its state law claims against Sims because the claims are personal to Burger and were never owned by [Debtor’s] bankruptcy estate.” 16 Motion, p. 2:2-4; Dckt. 181. 17 2. “Thus, the claims were not sold to Sims as part of his settlement of the Trustee's preference action against Sims.” Id., p. 2:3-5. [18] 3. “Moreover, Burger's claims are particularized and not shared by any other 19 creditors of [Debtor].” Id., p. 2:5-6. 20 4. “Sims took specific and direct actions to tortiously interfere with Burger's contractual relationship with [Debtor] and the economic advantage Burger 21 had with [Debtor].” Id., p. 2:6-7. 22 5. “Under the relevant California and federal authorities, Burger thus has standing to pursue its state law claims against Sims in the Stanislaus County 23 Superior Court.” Id., p. 2:7-9. 24 The present Motion then continues to state that it is based on the Motion, but also the 25 following additional documents (and whatever grounds may be stated therein): 26 • The Notice, 27 • The Points and Authorities, 28 • The Request for Judicial Notice, [1] • The Exhibit List (presumably the Exhibits themselves, and not merely the “list”), [2] • All other unidentified pleadings, documents, and papers that are filed in this “action” 3 (not a defined term), and 4 • Whatever “other matters” presented to the court at the hearing. 5 Id., p. 2:10-13. 6 Burger PTS has provided the court with a fourteen (14) page Points and Authorities. 7 Dckt. 183. After the title page and tables, Burger PTS begins on page 4 of the “points and 8 authorities” with a statement of various alleged facts and grounds upon which Burger PTS is basing 9 the requested relief. These grounds continue being stated through the middle of page 7 of the 10 “points and authorities.” These statements of grounds comprise about one-third of the “points and 11 authorities.” 12 Beginning on the middle of page 7 of the Points and Authorities, Burger PTS cites the court 13 to various cases and legal authorities, and provides legal argument and analysis. 14 The Request for Judicial Notice is three pages in length, listing one (1) document, Burger 15 PTS’s First Amended Complaint in the State Court Action. Dckt. 184. There is one (1) exhibit 16 filed: Exhibit 1, Burger PTS’s First Amended Complaint in the State Court Action, pages 4 thru 12. 17 Dckt. 185. 18 Opposition Filed by Sims/Baker Trustee 19 On March 1, 2020, Sims/Baker Trustee filed a timely opposition. Sims/Baker Trustee begins 20 his Opposition with several assertions, namely that: 21 (a) Burger PTS has admitted his claims are general and is barred from arguing otherwise; [22] (b) Burger PTS lacks standing because it cannot allege any cause of action that is 23 particular to it; 24 (c) Burger PTS’s cases are distinguishable; and 25 (d) leave to amend should be denied. 26 Dckt. 188. 27 The Opposition is ten pages of detailed argument and authorities. There are many California 28 cases cited, and a discussion as to why this court should not be allowing Burger PTS to amend its 1 complaint. Given that there is no adversary proceeding before this court, it is not clear why 2 Sims/Baker Trustee is arguing that amendment on a complaint should not be allowed by this court. 3 There is nothing in the grounds and relief stated with particularity in the Motion about seeking an 4 order from this court to amend the First Amended Complaint that is properly before the California 5 Superior Court. 6 Reply Filed by Burger PTS 7 On May 28, 2020, Burger PTS filed a timely thirteen (13) page Reply addressing the 8 Opposition. Dckt. 195. 9 CONSIDERATION OF THE MOTION 10 Burger PTS states with particularity in the Points and Authorities (Dckt. 181) the actual 11 grounds upon which it asserts that the requested relief is proper. The court distills from the Points 12 and Authorities the following grounds and treats them as being restated with particularity in the 13 Motion (as required by Fed. R. Bankr. P. 9013) by Burger PTS. 14 Defendant John Sims is Trustee of the Baker G&M 1994 Trust (“Baker Trust”). Sims/Baker 15 Trustee also served as President of Debtor, a corporation wholly owned by the Baker Trust. 16 Sims/Baker Trustee sold Debtor’s assets in a manner that ensured that Sims/Baker Trustee and his 17 family members received the proceeds and for all amounts purportedly owed to the Baker Trust; 18 instead of the proceeds being used to pay all of Debtor's creditors, including Burger PTS, who were 19 owed money for services rendered. The purchaser of Debtor’s assets, Vista Del Sol Postacute Care 20 (“Vista”), participated in Sims/Baker Trustee’s scheme by obtaining Debtor’s entire operating 21 business for little to no payment to Debtor. In a related transaction, Sims/Baker Trustee sold the 22 Trust’s interest in real property on which Debtor operated some facilities to Vista SNF Properties, 23 LLC, a related entity to Vista, for nearly $2,000,000.00. 24 Burger PTS argues that Sims/Baker Trustee structured the transaction to ensure that the 25 Baker Trust received millions of dollars without subjecting the funds to pay creditor claims. 26 Additionally, while conducting this purported scheme, Sims/Baker Trustee continued to receive a 27 salary from Debtor while Burger PTS was not being paid for its services. Burger PTS alleges that 28 Sims/Baker Trustee prioritized payment of vendors who threatened to stop working if they were not 1 paid, over vendors who continued working, such as Burger PTS, despite not being paid. 2 Burger PTS asserts that after discovering this scheme, Burger PTS had no choice but to file 3 suit against Sims/Baker Trustee. [4] First Cause of Action 5 Intentional Interference with Prospective Economic Advantage 6 Burger PTS lists the following as the elements for the First Cause of Action in the First 7 Amended Complaint: [8] (1) the existence, between the Burger PTS and some third party, of an economic 9 relationship that contains the probability of future economic benefit to Burger PTS; 10 (2) Sims/Baker Trustee’s knowledge of the relationship; 11 (3) intentionally wrongful acts designed to disrupt the relationship; and 12 (4) actual disruption of the relationship; and 13 (5) economic harm proximately caused by Sims/Burger Trustee’s actions; 14 citing Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. 2 Cal.5th 505, 512 (2017) as 15 stating applicable California law. 16 Burger PTS points the court to Shaoxing County Huayue Import & Export v. Bhaumik, 191 17 Cal.App.4th 1189 (Cal. Ct. App. 2011) where the District Court of Appeal noted that there is a 18 difference between the claims trustee may be bringing on behalf of the estate and the claims of a 19 creditor against a third party. In particular, the court held that: 20 “Although the line between ‘claims of the debtor,’ which a trustee has statutory authority to assert, and ‘claims of creditors,’ which Caplin bars the trustee from 21 pursuing, is not always clear, the focus of the inquiry is on whether the Trustee is seeking to redress injuries to the debtor itself caused by the defendants' alleged 22 conduct. [Citation.] If the debtor suffered an injury, the trustee has standing to pursue a claim seeking to rectify such injury. But, ‘[w]hen a third party has injured not the 23 bankrupt corporation itself but a creditor of that corporation, the trustee in bankruptcy cannot bring suit against the third party.’ [Citations.]” Smith v. Arthur 24 Andersen LLP (9th Cir. 2005) 421 F.3d 989 , 1002–1003.) 25 Shaoxing County Huayue Import & Export v. Bhaumik, 191 Cal.App.4th at 1197. 26 Burger PTS asserts there was an economic relationship between Burger PTS and Debtor on 27 the basis that there was a contract for services between Burger PTS and Debtor. Burger PTS further 28 argues that Sims/Baker Trustee knew of this contract. Sims/Baker Trustee took intentional wrongful 1 acts, namely causing the sale of Debtor's assets to Vista for unreasonably low consideration, which 2 caused a “disruption.” This disruption is the lack of payment from Debtor to Burger PTS. 3 Sims/Baker Trustee also ensured that the Baker Trust was repaid before repaying the creditors of 4 [Debtor], including Burger PTS. This lack of payment caused loss of revenue for Burger PTS and 5 thus Burger PTS suffered economic harm. 6 Burger PTS argues that the instant case is analogous to Shaoxing. In that case, a creditor of 7 a corporation that filed bankruptcy sought to recover from an individual shareholder of the 8 corporation under an alter ego theory. 191 Cal.App.4th at 1193. In Shaoxing, the shareholder 9 sought to escape liability by arguing that the causes of action were property of the estate and thus 10 such creditor did not have standing. Id. The appellate court disagreed finding that the creditor was 11 not “assert[ing] rights belonging to the corporation” by seeking money from the shareholder that was 12 owed to the creditor, and adding that creditor’s claims “were not property of the bankruptcy estate.” 13 Id. at 1199. 14 Burger PTS argues that the allegations above are personal to Burger PTS because it is 15 damage done to Burger PTS, not damage done to Debtor. The injuries Burger PTS seeks redress 16 are injuries to Burger PTS, as a creditor, the claim thus belongs to Burger PTS and cannot be 17 pursued by a trustee. [18] Second Cause of Action 19 Negligent Interference with Prospective Economic Advantage 20 Burger PTS asserts that the elements for negligent interference with prospective economic 21 advantage are the same as intentional interference, with the exception that the wrongful acts were 22 not intentional. It is alleged that Sims/Baker Trustee knew that the economic relationship with 23 Burger PTS would be disrupted if the Sims/Baker Trustee failed to act with reasonable care, and the 24 Sims/Baker Trustee indeed failed to act with reasonable care. 25 Here, Burger PTS asserts that, as explained, there was an economic relationship and there 26 was a prospective advantage that would become a realized advantage had it not been for the 27 negligent actions taken by Sims/Baker Trustee. Burger PTS argues that it has established that 28 Sims/Baker Trustee acted without reasonable care because the allegations as stated show that 1 Sims/Baker Trustee acted in a way that disrupted the economic relationship. 2 Burger PTS again argues that the allegations above are personal to Burger PTS because it 3 is damage done to Burger PTS, not damage done to Debtor. The injuries Burger PTS seeks redress 4 are injuries to Burger PTS, as a creditor, and thus the claim belongs to Burger PTS and cannot be 5 pursued by a trustee. [6] Third Cause of Action 7 Conspiracy to Intentionally Interfere with Prospective Economic Advantage 8 Burger PTS lists the following as the elements for this cause of action: (1) formation and 9 operation of the conspiracy, (2) damage resulting to Burger PTS, and (3) from an act in furtherance 10 of the common design. I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 11 257, 272, fn. 2 . 12 Burger PTS contends that the allegations stated for intentional interference with prospective 13 economic advantage show that, at the very minimum, there was a conspiracy between Sims/Baker 14 Trustee and Vista, and moreover that Burger PTS was damaged as a result of the wrongful acts taken 15 by Sims/Baker Trustee. 16 Burger PTS again argues that the allegations above are personal to Burger PTS because it 17 is damage done to Burger PTS, not damage done to Debtor. The injuries Burger PTS seeks redress 18 are injuries to Burger PTS, as a creditor, and as such the claim belongs to Burger PTS and cannot 19 be pursued by a trustee. [20] Fourth Cause of Action 21 Unfair Competition Law Bus. & Prof. Code §§ 17200, et. seq. 22 Burger PTS argues that the allegations as stated in the first amended Complaint show a 23 violation of the Unfair Competition Law (UCL) in that Sims/Baker Trustee engaged in a fraudulent 24 business practice and such fraudulent practice it was directed at Burger PTS. Burger PTS contends 25 that by Sims/Baker Trustee continuing to order services from Burger PTS, while failing to disclose 26 that Debtor could not pay Burger PTS for those services, Sims/Baker Trustee engaged in actions that 27 amounted to misleading or deceiving Burger PTS. 28 As with the previous causes of action, Burger PTS argues that the allegations above are 1 personal to Burger PTS because it is damage done to Burger PTS, not damage done to Debtor. The 2 injuries Burger PTS seeks redress are injuries to Burger PTS, as a creditor, and as such the claim 3 belongs to Burger PTS and cannot be pursued by a trustee. 4 DISCUSSION 5 Burger PTS seeks to assert four causes of action against Sims/Baker Trustee which are stated 6 in the First Amended Complaint in the State Court Action. The court separately considers each and 7 the grounds alleged for each cause of action. 8 Before reviewing the factual grounds, a review of the various key authorities cited by the 9 Parties is warranted. 10 In Shaoxing County Huayue Import & Export v. Bhaumik, 191 Cal.App. 4th 1189 (2011), 11 the California Court of Appeal was addressing the claims of a creditor of a Chapter 7 debtor being 12 asserted against a third party based on alter ego. The Court of Appeal provides a detailed discussion 13 of what is property of the bankruptcy estate of a corporate debtor and the bankruptcy trustee’s right 14 and power to administer such property, including claims against others. 15 The Court of Appeal stated that the trustee for the bankruptcy estate for a debtor corporation 16 can maintain alter ego claims against third-parties if there can be alleged an injury to the 17 corporation. [18] The trustee of a bankrupt corporation can maintain an action against a 19 defendant based on an alter ego theory if there is some allegation of injury to the corporation that gives the corporation a right of action against the defendant. (Stodd 20 v. Goldberger (1977) 73 Cal.App.3d 827, 833 (Stodd).) For example, the trustee of a bankrupt corporation can maintain an action against corporate shareholders on 21 an alter ego theory in order to recover property or pursue a right of action belonging to the bankrupt corporation, including an action to set aside 22 fraudulent transfers or an action for conversion to recover assets of the bankrupt corporation. (Id. at p. 834.) However, the trustee of a bankrupt 23 corporation "cannot maintain an action against defendants on an alter ego theory absent some allegation of injury to the corporation giving rise to a right of 24 action in it against defendants. In the absence of any such allegation, the asserted cause of action belongs to each creditor individually. . . ." (Id. at p. 833.) "[A] trustee 25 in bankruptcy may not enforce rights of action which belong to the creditors individually[,] because they are not rights in which the bankrupt claims an interest 26 and are not assets of the estate in bankruptcy. [Citations.]" (Id. at p. 835.) . . . 27 In this case, Shaoxing alleged Bhaumik was liable as ITC's alter ego with respect to money that ITC owed for breach of contract and common counts. 28 Shaoxing did not seek to assert a right of action belonging to the corporation. 1 Bhaumik has not argued that the alter ego allegations constituted a substantive right of action belonging to the corporation. We hold that Shaoxing's claims based on alter 2 ego liability were not the property of ITC's bankruptcy estate and, therefore, the action was not subject to the automatic stay of the bankruptcy proceedings. [3] 4 Shaoxing, 191 Cal.App. 4th at 1198-1999 [emphasis added]. 5 On the federal side of the law, Tronox Inc. v. Kerr-McGee Corp, 855 F.3d 84 (2nd Cir. 6 2017), is presented by Burger PTS. In ruling on the issues before it, the Second Circuit Court of 7 Appeals panel dismissed the appeal due to lack of jurisdiction. As the panel described it, there were 8 “tortured corporate histories and shifting legal theories” that made for a messy case. Though 9 dismissing the appeal for lack of jurisdiction, the Appellate Court discussed the law on derivative 10 claims in the context of bankruptcy cases. A “derivative claim” is described by the court in 11 Tronox as “[c]laims ‘based on rights 'derivative' of, or 'derived' from, the debtor's’—typically 12 constitute ‘property of the estate.’” Tronox Inc. v. Kerr-McGee Corp, 855 F.3d at 99 . The Appellate 13 Court’s discussion includes the following explanation of derivative claims: [14] "Derivative claims" in the bankruptcy context are those that "'arise[] from harm 15 done to the estate' and that 'seek [] relief against third parties that pushed the debtor into bankruptcy.'" Madoff, 740 F.3d at 89 (alterations in original) (quoting 16 Picard v. JPMorgan Chase & Co. (In re Bernard L. Madoff Inv. Sec. LLC) ("JPMorgan"), 721 F.3d 54, 70 (2d Cir. 2013)). In distinguishing derivative claims 17 from particularized claims exclusive to individual creditors, labels are not conclusive, since plaintiffs often try, but are not permitted, to plead around a 18 bankruptcy. See id. at 91-92 . In other words, we are wary of putting form over substance. See id. at 89, 91-92 . Thus, we "inquire into the factual origins of the 19 injury and, more importantly, into the nature of the legal claims asserted." Id. at 89 (citing Johns-Manville Corp. v. Chubb Indem. Ins. Co. (In re Johns-Manville 20 Corp.) ("Manville III"), 517 F.3d 52, 67 (2d Cir. 2008), rev'd on other grounds sub nom. Travelers Indem. Co. v. Bailey, 557 U.S. 137 , 129 S. Ct. 2195 , 174 L. Ed. 2d 21 99 (2009)). If the claim "is a general one, with no particularized injury arising from it, and if that claim could be brought by any creditor of the debtor, the 22 trustee is the proper person to assert the claim, and the creditors are bound by the outcome of the trustee's action." St. Paul, 884 F.2d at 701. Whereas a 23 derivative injury "is based upon 'a secondary effect from harm done to [the debtor],' an injury is said to be 'particularized' when it can be 'directly traced to [the 24 third party's] conduct.'" Madoff, 740 F.3d at 89 (alterations in original) (quoting St. Paul, 884 F.2d at 704). Non-derivative claims are personal to the individual 25 creditor and of no interest to the others. 26 Tronox Inc. v. Kerr-McGee Corp, 855 F.3d at 100 (emphasis added). 27 At this juncture, whatever “mere” label that a plaintiff may use when pursuing a third-party 28 is not determinative of whether it is a derivative claim. One must look to see if the alleged injury, 1 the harm done, is particularized to one creditor or whether it is an injury that effects all creditors of 2 the debtor. Further, it is not just the “injury,” but, as the Federal Court of Appeals says, “more 3 importantly” is the nature of the claim being asserted by the plaintiff against the third-party. 4 The Second Circuit decision in Tronox continues, providing an amplification of this analysis 5 in the following: [6] As difficult a task as it may be to distinguish derivative from non-derivative claims, 7 our prior decisions—namely, St. Paul, Manville III, JPMorgan, and Madoff, each employed by the District Court—and the Third Circuit's divided-panel decision in 8 In re Emoral, Inc. ("Emoral"), 740 F.3d 875 (3d Cir. 2014), have done much of the legwork. Those cases and general principles of bankruptcy law persuade us that the 9 Avoca Plaintiffs' claims against New Kerr-McGee are generic, derivative claims. [10] St. Paul. In St. Paul, PepsiCo sued Banner, the corporate parent of the debtor, for 11 claims PepsiCo had against the debtor, claiming that Banner had stripped away the assets of its alter ego subsidiary, the debtor. 1884 F.2d at 692. PepsiCo argued 12 that its claim was particularized, emphasizing its individualized harm suffered at the hands of the debtor. Id. at 703-04. We determined that PepsiCo's harm 13 stemmed from its original relationship to the debtor, not Banner. Id. at 704. But that harm—the failure to honor contractual obligations—was not the harm for which 14 PepsiCo sought redress against Banner. See id. Instead, PepsiCo "alleged a secondary effect from harm done to [the debtor]" by Banner—removing assets 15 from the debtor that would have allowed it to meets its obligations to PepsiCo and other creditors. Id. Thus, we held the proper remedy for any harm caused by 16 Banner to the debtor, and in turn all of its creditors, was "for the trustee to bring an alter ego claim as property of the estate, . . . or to bring an action alleging 17 preferential or fraudulent transfer of assets to Banner." Id. 18 Id. (emphasis added). 19 The court notes that this appears to be exactly what Burger PTS asserts is the basis for its 20 claims against Sims/Baker Trustee - the preferential payment of creditors and fraudulent transfer of 21 assets. 22 Manville III. To understand Manville III, one must appreciate the context in which it was decided. The bankruptcy of the Johns-Manville Corporation ("Manville") 23 produced a number of cases in this Court. In one of those cases, a distributor of Manville's products, alleging that it was a coinsured under Manville's insurance 24 policies, challenged the bankruptcy court's authority to enter an injunction barring what the distributor argued were independent contract-based claims against the 25 insurer. MacArthur Co. v. Johns-Manville Corp. (In re Johns-Manville Corp.) ("Manville I"), 837 F.2d 89 (2d Cir. 1988). We rejected the distributor's 26 characterization, holding that the distributor's claims, whether sounding in tort or contract, were "derivative" of Manville's because they sought recovery "out 27 of the proceeds of Manville's insurance policies on the basis of Manville's conduct." Id. at 92-93 . [28] 1 Manville III was a very different case from Manville I. There, asbestos victims sued the same insurer, but the allegations were that the insurer had tortiously 2 "influenced Manville's purported failure to disclose its knowledge of asbestos hazards." Manville III, 517 F.3d at 58 .22 Contrasting those claims with the ones in 3 Manville I, we held the claims were non-derivative because they sought to recover for harms done directly to plaintiffs by the insurer through the insurer's 4 own wrongdoing, not for some wrongdoing that affected the estate. See id. at 68 . 5 We also now have the benefit of two recent cases applying the distinction drawn in Manville III. [6] JPMorgan. In JPMorgan, we held that the liquidation trustee for the estate of 7 Bernard L. Madoff Investment Securities LLC ("BLMIS") lacked standing to bring claims "on behalf of thousands of customers against third-party financial institutions 8 for their handling of individual investments made on various dates in varying amounts" from BLMIS accounts. 721 F.3d at 71 . As with the claims in Manville III, 9 we determined that the trustee's claims—because they alleged that the third-party financial institutions independently cause particularized harm to 10 individual creditors—were owned by the customers, and were therefore not derivative. Id. [11] Madoff. Most recently, in Madoff, we considered whether claims by a creditor 12 against a non-debtor were derivative of claims asserted and settled by the BLMIS trustee and therefore barred by the injunction that served as the model for 13 the Injunction here. The trustee in Madoff asserted in an adversary proceeding claims for fraudulent transfer, avoidable preferences, and turnover against 14 alleged Madoff co-conspirator Jeffrey Picower and other defendants, based on their alleged improper withdrawals of more than $6.7 billion from BLMIS. Madoff, 740 15 F.3d at 85. During the pendency of settlement negotiations, BLMIS customers (creditors of the BLMIS estate) named the same defendants in a class action in 16 district court alleging, among other things, civil conspiracy and conversion based on similar allegations. Id. The bankruptcy proceeding thereafter settled. In 17 confirming the settlement and issuing an injunction against duplicative and derivative claims, the district court ruled that the class-action claims were 18 barred. Id. at 87. 19 On appeal, we agreed. Id. at 96. We were not persuaded by the fact that the plaintiffs alleged different causes of action than had the trustee. There, as here, 20 the plaintiffs did not allege that the defendants took any "particularized" action aimed at them. Id. at 93. Instead, they sought to plead around an injunction by 21 focusing on the nature of the relief sought. See id. We looked beyond the plaintiffs' labels, and determined that the claims derived from the estate because the 22 "alleged injuries [were] inseparable from, and predicated upon, a legal injury to the estate." Id. at 92. We contrasted the claims with those in Manville III and 23 JPMorgan, and likened them to claims alleged in Manville I.23 Id. at 90. The specific damages BLMIS customers sought from Picower and his codefendants—namely, 24 losses and taxes—were not "recoverable in an avoidance action under the Bankruptcy Code." Id. at 93 (citing 11 U.S.C. § 550 (a) ("[T]he trustee may recover, 25 for the benefit of the estate, the property transferred, or . . . the value of such property. . . .")). Nonetheless, we held that the damages suffered by all BLMIS 26 customers "still remain[ed] mere secondary harms flowing from the Picower defendants' fraudulent withdrawals and the resulting depletion of BLMIS 27 funds." Id. 28 Id., 100-102. 1 Again, merely because the creditors seeking to sue the third-parties claimed their own 2 specific injuries, that did not allow them to base those claims on the fraudulent transfers that only 3 the bankruptcy trustee could recover for the bankruptcy estate. 4 Emoral. Emoral, similar to the case here, arose in the context of a motion to enforce a court order approving the settlement of a claim for fraudulent transfer. 740 F.3d at 5 877. The case involved a prepetition sale of assets by Emoral, a company that manufactured diacetyl, a chemical used in food flavoring that was the subject of 6 many toxic-tort suits. See id. After Emoral filed for bankruptcy, the trustee brought an adversary proceeding against Aaroma, the buyer of Emoral's assets, alleging 7 that the prepetition sale constituted a fraudulent transfer. See id. The parties reached a settlement and, like here, the trustee agreed to release Aaroma from any 8 claims that were property of the Emoral estate. See id. At the hearing on the propriety of the settlement, however, the Diacetyl plaintiffs (with the agreement of 9 a representative of the trustee) challenged the release, arguing that any successor-liability claims against Aaroma did not belong to the Emoral estate, 10 and that the trustee was therefore without authority to release them. See id. The plaintiffs thereafter sued Aaroma arguing for successor liability, relying on the 11 trustee's arguments that the claims were outside the estate. See id. The bankruptcy court agreed, the district court reversed and remanded to the bankruptcy court, and 12 the Third Circuit affirmed the district court's order. See id. at 878 . 13 The Third Circuit majority framed the issue (in terms that could be used nearly verbatim here) as one that "require[d] [it] to determine whether personal injury 14 causes of action arising from the alleged wrongful conduct of a debtor corporation, asserted against a third-party non-debtor corporation on a 'mere 15 continuation' theory of successor liability under state law, are [*103] properly characterized as 'generalized claims' constituting property of the bankruptcy 16 estate." Id. at 876 . 17 The court answered that question in the affirmative. Id. at 882 . The majority relied on our explication in St. Paul that, in analyzing "common claims against the 18 debtor's alter ego or others who have misused the debtor's property in some fashion," if a claim is "a general one, with no particularized injury arising from 19 it, and if that claim could be brought by any creditor of the debtor, the trustee is the proper person to assert the claim, and the creditors are bound by the 20 outcome of the trustee's action." Id. at 879 (quoting St. Paul, 884 F.2d at 701). In the majority's eyes, the plaintiffs "fail[ed] to demonstrate how any of the factual 21 allegations that would establish their cause of action based on successor liability are unique to them as compared to other creditors of Emoral," or "how recovery 22 on their successor liability cause of action would not benefit all creditors of Emoral given that Aaroma, as a mere continuation of Emoral, would succeed to all of 23 Emoral's liabilities." Id. at 880. Thus, the majority held that the plaintiffs' claim was "general" rather than "individualized," and therefore part of the bankruptcy estate. 24 Id. The court emphasized that the "[p]laintiffs' cause of action against Aaroma would be based on facts generally available to any creditor, and recovery would serve 25 to increase the pool of assets available to all creditors." Id. at 881. 26 Id., 102-103 (emphasis added). 27 This court is also directed to the Bankruptcy Appellate Panel for the Ninth Circuit decision 28 in Hoskins v. Citigroup, Inc. (In re Viola), 469 B.R. 1 (B.A.P. 9th Cir. 2012); affrm. Hoskins v. 1 Citigroup, Inc. (In re Viola), 583 Fed. Appx. 669 (9th Cir., 2014). In Viola, the creditors sought to 2 assert third-party claims against Citigroup relating to a Ponzi scheme conducted through a Citibank 3 bank account and related entities. In addressing Ninth Circuit law concerning claims of a 4 bankruptcy estate and claims of individual creditors against a third-party, the Bankruptcy Appellate 5 Panel explained: [6] In the Ninth Circuit, "it is well settled that a bankruptcy trustee has no standing 7 generally to sue third parties on behalf of the estate's creditors, but may only assert claims held by the [debtor] itself." Smith v. Arthur Andersen LLP, 421 F.3d 989 , 8 1002 (9th Cir. 2005) (internal citations omitted); see also In re Hamilton Taft & Co., 176 B.R. at 902 ("A debtor's bankruptcy trustee . . . is not authorized to pursue 9 every action that creditors of the debtor might pursue."). Hoskins' claim against the Citi defendants for aiding and abetting fraudulent transfers is entirely derived 10 from the creditor investors, and would not exist but for their existence and involvement in the bankruptcy. For the reasons laid out in Caplin and adopted by the 11 Ninth Circuit in Williams, we must conclude that Hoskins does not have standing to pursue this claim, and therefore we affirm the dismissal of Hoskins' third claim for 12 relief. 13 Hoskins v. Citigroup, Inc. (In re Viola), 469 B.R. 1, 8-9 (B.A.P. 9th Cir. 2012). The trustee in 14 Hoskins asserted causes of action sounding as fraudulent conveyances pursuant to 11 U.S.C. 15 §§ 548(a)(1)(A) and 544(b), and a third for damages for Citigroup Inc. aiding and abetting Viola’s 16 fraudulent transfers. However, the Panel determined that the bankruptcy trustee did not have such 17 claims against Citigroup, Inc. First, concluding that Citigroup, Inc. was not a transferee of a 18 transfer, and second, that any such claim, if it existed, was time barred. 19 Distilled down, the bankruptcy trustee has standing to prosecute claims of the estate - those 20 being the ones the debtor had and those given by Congress in the Bankruptcy Code, which in the 21 matter before the court are fraudulent conveyances, preferences, or avoidable as provided in [22] 11 U.S.C. § 544 (which includes claims held by creditors to avoid transfers), § 547, § 548, and 23 § 550. 24 Allegations In the First Amended Complaint by Which Burger PTS Bases Its Claims 25 Against Sims/Baker Trustee 26 First, for general allegations common to all causes of action, the First Amended Complaint 27 begins with an assertion that Sims/Baker Trustee had a scheme to “strip [Debtor] of its assets to 28 avoid paying [Debtor’s] creditors . . . and to increase the monies paid to and collected by Defendant 1 [Sims/Baker Trustee].” First Amended Complaint, ¶ 1. 2 The First Amended Complaint further alleges that this was done while Sims/Baker Trustee 3 was serving as not only the Trustee of the Baker Trust and the 100% owner of the Debtor, but also 4 while serving as President, Secretary, and the sole Director of Debtor. Id. Further, that Sims/Baker 5 Trustee used his position as President, Secretary, and the sole Director to maximize his own profits 6 and interfere with Burger PTS’s (as a creditor of Debtor) ability to collect the obligations owed by 7 Debtor. Id. 8 The general allegations in the First Amended Complaint include the following: 9 1. The Baker Trust held a 50% interest in a partnership that owned 100% of the land and facilities on which Debtor operated two facilities (the “Real 10 Property”). Id. ¶ 10. 11 2. In 2012 Sims/Baker Trustee became the President, Secretary, and sole Director of Debtor. Then, either individually or in his capacity as the Trustee 12 of the Baker Trust, Sims/Baker Trustee retained ownership of the 50% interest in the Real Property, instead of “holding” the Real Property “in the 13 name of” Debtor. Id. ¶ 11. 14 At this juncture, it could be read that the Debtor had a right to claim ownership to the 15 property, and if so, this arose pre-petition, and any such right to the property is that of the 16 bankruptcy estate in this case, which was created in July 2016. 17 3. In 2013 Debtor entered into a contract with Burger PTS to provide services. Id. ¶ 13. [18] 4. Debtor did not make a profit in operating its businesses during the period that 19 Sims/Baker Trustee was the President, Secretary, and sole Director. Id. ¶ 14. 20 5. Debtor failed to pay Burger PTS for the services provided. 21 6. In September 2015 Burger PTS sent Debtor the following statements for amounts due and owing Burger PTS under its contract with Debtor: [22] a. $66,627.77 for services provided to the Bel-Air Convalescent 23 Hospital; 24 b. $194,389.83 for services provided to the Elness Convalescent Hospital; and [25] c. $78,067.17 for services provided to the Hale Aloha Convalescent 26 Hospital. 27 These amounts totaled $339,084.77 as of September 2015. Id. ¶¶ 16-19. 28 /// 1 7. Sims/Baker Trustee controlled Debtor and decided to sell Debtor. Id. ¶ 21. 2 8. Sims/Baker Trustee developed a scheme to ensure that he and his family members would receive payments for alleged obligations, rather than the 3 proceeds be used to pay all creditors, including Burger PTS. Id. ¶ 22. 4 a. Vista SNF Properties and Vista Del Sol Postacure Care (collectively “Vista”) obtained Debtor’s entire business operation [5] (1) patients, 6 (2) employees, (3) personal property, 7 (4) administration, (5) technology, 8 (6) billing histories (records) (7) vendor relationships, and 9 (8) contracts, 10 With no cash payments made to Debtor for any of these assets and the business operations of the Debtor acquired by Vista. Id. [11] b. Vista did assume limited and specific debts of Debtor as part of the 12 agreement. Id. ¶ 23. 13 9. At the same time as the sale of the Debtor’s business and assets, Sims/Baker Trustee, as the Trustee of the Baker Trust, sold its interest in the Real 14 Property on which Debtor operated some of its facilities to Vista. Id. ¶ 24. The transaction was structured to pay “millions of dollars” to the Baker Trust 15 and divert the monies from claims of creditors of Debtor. Id. 16 This assertion sounds in the nature of a preference, if the Baker Trust was a bona fide 17 creditor of the Debtor, or fraudulent conveyances, if the Baker Trust was not a bona fide creditor 18 of Debtor. Preference and fraudulent conveyance claims are property of the bankruptcy estate. 11 19 U.S.C. §§ 547 , 544, 548, 541(a)(3), 550. 20 10. It is alleged that Sims/Baker Trustee, individually, as President of Debtor, as the sole Director of Debtor, and as the Trustee of the Baker Trust: [21] a. Conspired with others, including Vista, [22] b. And devised schemes as described in the First Amended Complaint, [23] c. To hinder, delay or defraud all of Debtor’s creditors, including 24 Burger PTS. 25 Id. ¶ 25. 26 These words, “to hinder, delay, or defraud” creditors, echo the statutory language for 27 fraudulent conveyances under the Bankruptcy Code, 11 U.S.C. § 548 (a)(1)(A), and California’s 28 version of the Uniform Fraudulent Conveyances Act, California Civil Code § 3439.04(a)(1). As 1 stated above, these claims are property of the bankruptcy estate. 11 U.S.C. §§ 541 (a)(3), 550. 2 11. Sims/Baker Trustee executed the scheme and Debtor’s creditors were left unpaid. However, the Baker Trust received payment in full for all of the 3 obligations it asserted it was owed. Id. ¶ 26. 4 This alleged wrong sounds in the nature of preference under 11 U.S.C. § 547 , which is 5 property of the bankruptcy estate. [6] 12. Sims/Baker Trustee “prioritized” creditors of Debtor who threatened to stop 7 providing services if they were not paid, by paying such preferred creditors, and not paying creditors who did not threaten to stop providing services if 8 they did not receive a preferential payment. Id. ¶ 27. 9 While stating some creditors were “prioritized,” it is alleged that the payments were made 10 to the preferred creditors in order to have those creditors provide additional goods or services 11 (consideration). Congress addresses this type of preference in 11 U.S.C. § 547 (c)(1). 12 13. Sims/Baker Trustee used his position as Trustee, President, and sole Director to make preferential payments interfered with Burger PTS’s ability to get, 13 and defrauded Burger PTS from getting, paid the obligations it was owed by Debtor. Id. ¶ 28. [14] First Cause of Action - 15 Wrongful Interference with Prospective Economic Advantage 16 The first cause of action in the First Amended Complaint is for Intentional Interference with 17 Prospective Economic Advantage. Going to the WITKIN Treatise on California Law, it first explains 18 that the wrongful conduct for this tort is: 19 The wrong consists of intentional and improper methods of diverting or taking business from another that are not within the privilege of fair competition. [multiple 20 citations omitted]. . . . 21 It has been suggested that the tort of inducing breach of contact “is merely a species of the broader tort of interference with prospective economic advantage.” (Buckaloo 22 v. Johnson (1975) 14 C.3d 815, 823, 122 C.R. 745, 537 P.2d 865 , infra, § 862.) However, interference with prospective economic advantage, unlike inducing 23 breach of contract, requires wrongful conduct other than the act of interference itself. (Della Penna v. Toyota Motor Sales, U.S.A., supra, 11 C.4th 393.) [24] 25 5 WITKIN SUMMARY OF CALIFORNIA LAW, 11TH TORTS § 854 (emphasis added). The elements of this 26 tort were repeated and reaffirmed by the California Supreme Court in Korea Supply Co. v. Lockheed 27 Martin Corporation, 29 Cal. 4th 1134, 1153 (2003), (emphasis added) as: 28 These elements are usually stated as follows: " '(1) an economic relationship between 1 the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional acts 2 on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the 3 acts of the defendant.' [Citations.]" (Westside Center Associates v. Safeway Stores 23, Inc. (1996) 42 Cal.App.4th 507, 521-522 .) [4] We most recently considered this tort in Della Penna v. Toyota Motor Sales, U.S.A., 5 Inc. (1995) 11 Cal.4th 376 (Della Penna), where we held that a plaintiff seeking to recover damages for interference with prospective economic advantage must plead 6 and prove as part of its case-in-chief that the defendant's conduct was "wrongful by some legal measure other than the fact of interference itself." (Id. at p. 393.) 7 . . . . . . 8 While a plaintiff may satisfy the intent requirement by pleading specific intent, i.e., that the defendant desired to interfere with the plaintiff's prospective economic 9 advantage, a plaintiff may alternately plead that the defendant knew that the interference was certain or substantially certain to occur as a result of its action. 10 . . . The elements of the tort of interference with prospective economic advantage do not 11 require a plaintiff to allege that the defendant acted with the specific intent, or purpose, of disrupting the plaintiff's prospective economic advantage. [12] 13 At the core of the alleged “wrongful conduct” is that Sims/Baker Trustee was acting to prefer 14 paying one group of creditors over others, excluding Burger PTS. The only “wrongful” act is 15 asserted to be the “preference” of paying others - with such “wrongful preference” being a uniquely 16 federal, bankruptcy law, property of the bankruptcy estate right. 11 U.S.C. § 547 . 17 The First Cause of Action further asserts that the Debtor’s assets were sold for unreasonably 18 low consideration, and with an intent to hinder, delay, or defraud creditors. The recovery for this 19 wrong is clearly within the rights of the bankruptcy estate to recover fraudulent conveyances. [20] 11 U.S.C. § 544 and § 548. 21 While titled an interference with economic advantage, the “interference” is just the alleged 22 preferences or fraudulent conveyances. 23 Such rights relating to these “wrongful acts” upon which the alleged wrongful interference 24 with prospective economic advantage is based on, and the right to recover the damages relating to 25 such wrongful acts, were property of the bankruptcy estate, administered by the Chapter 7 Trustee, 26 and sold to Sims/Baker Trustee as part of the court approved compromise. Merely titling the alleged 27 preferences or fraudulent conveyances as an intentional interference with prospective economic 28 advantage does not allow Burger PTS to try to prosecute personal claims based on those rights of 1 the bankruptcy estate. 2 Second Cause of Action - Negligent Interference with Prospective Economic Advantage [3] 4 Burger PTS asserts that the elements for negligent interference with prospective economic 5 advantage are the same as intentional interference, with the exception that the wrongful acts were 6 not intentional. Further, that the Sims/Baker Trustee knew that the economic relationship would be 7 disrupted if the Sims/Baker Trustee failed to act with reasonable care, and the Sims/Baker Trustee 8 indeed failed to act with reasonable care. 9 Here, Burger PTS asserts that there was an economic relationship and there was a 10 prospective advantage that would become a realized advantage had it not been for the negligent 11 actions taken by Sims/Baker Trustee. Burger PTS argues that it has established that Sims/Baker 12 Trustee acted without reasonable care because the allegations as stated show that Sims/Baker 13 Trustee acted in a way that disrupted the economic relationship. 14 The “wrongful conduct” upon which the improper interference is asserted are the alleged 15 preferences and fraudulent conveyances, as there were for the Intentional Interference Tort. 16 As with the Intentional Interference Tort, Burger PTS cannot take, diminish, or co-opt the 17 bankruptcy estate’s and the Chapter 7 Trustee’s rights and interests arising under 11 U.S.C. §§ 547 , 18 544, 548, 541(a)(3), 550. [19] Third Cause of Action - 20 Conspiracy to Intentionally Interfere with Prospective Economic Advantage 21 Burger PTS lists the following as the elements for this cause of action: (1) formation and 22 operation of the conspiracy, (2) damage resulting to plaintiff, and (3) from an act in furtherance of 23 the common design. I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257 , 24 272, fn. 2. 25 Burger PTS contends that the allegations stated for intentional interference with prospective 26 economic advantage show that, at the very minimum, there was a conspiracy between Sims/Baker 27 Trustee and Vista, and moreover that Burger PTS was damaged as a result of the wrongful acts taken 28 by Sims/Baker Trustee. 1 The “wrongful conduct” upon which the conspiracy to make the improper interference is 2 asserted are the alleged preferences and fraudulent conveyances as for the Intentional Interference 3 Tort. 4 As with the Intentional Interference Tort, Burger PTS cannot take, diminish, or co-opt the 5 bankruptcy estate’s and the Chapter 7 Trustee’s rights and interests arising under 11 U.S.C. §§ 547 , 6 544, 548, 541(a)(3), 550. [7] Fourth Cause of Action - 8 Unfair Competition Law Bus. & Prof. Code §§ 17200, et. seq. 9 Burger PTS argues that the allegations as stated in the first amended Complaint show a 10 violation of the Unfair Competition Law (UCL) in that Sims/Baker Trustee engaged in a fraudulent 11 business practice and it was directed at Burger PTS. Burger PTS contends that by Sims/Baker 12 Trustee continuing to order services from, while failing to disclose that Debtor could not pay Burger 13 PTS for those services, Sims/Baker Trustee engaged in actions that amounted to misleading or 14 deceiving Burger PTS. 15 As with the previous causes of action, Burger PTS argues that the allegations above are 16 personal to Burger PTS because it is damage done to Burger PTS, not damage done to Debtor. The 17 injuries Burger PTS seeks redress are injuries to Burger PTS, as a creditor, and as such the claim 18 belongs to Burger PTS and cannot be pursued by a trustee. 19 Again, the “wrongful conduct” upon which the Unfair Competition is asserted are the alleged 20 preferences and fraudulent conveyances as for the Intentional Interference Tort. 21 As with the Intentional Interference Tort, Burger PTS cannot take, diminish, or co-opt the 22 bankruptcy estate’s and the Chapter 7 Trustee’s rights and interests arising under 11 U.S.C. §§ 547 , 23 544, 548, 541(a)(3), 550. 24 CONCLUSION 25 While titling the four Causes of Action in the First Amended Complaint as Intentional, 26 Negligent, and Conspiracy to Intentionally Interfere With Prospective Economic Advantage, and 27 Unfair Competition (Cal. Bus. & Prof. §§ 17200 et seq.), the alleged wrongful conduct asserted are 28 preferences and fraudulent conveyances that are, as a matter of federal law, property of the 1 || bankruptcy estate and rights given to the Chapter 7 Trustee. There are no, as the First Amended 2 |} Complaint has been presented to the court, alleged wrongful conduct that was done uniquely as to 3 || the Burger PTS. 4 In making this determination, the court does not rule that the causes of action for Intentional, 5 || Negligent, and Conspiracy to Commit Interference With Prospective Economic Advantage and the 6 |} Unfair Competition “causes of action” were property of the estate or rights of the Chapter 7 Trustee. 7 || The court does determine that claims based on alleged preferences or fraudulent conveyances were 8 || property of the bankruptcy estate settled by the Chapter 7 Trustee, and sold to Sims/Baker Trustee. 9 If Burger PTS could assert wrongs that are personal, not wrongs for which the bankruptcy 10 || estate and Chapter 7 Trustee have the rights and claims, the court does not prospectively determine 11 |} such unstated claims. 12 The court shall enter an order stating that all claims based on alleged preferential payments 13 || to other creditors or alleged fraudulent transfers of assets of the Debtor were property of the 14 || bankruptcy estate and that pursuant to the Compromise with the Chapter 7 Trustee, all such rights 15 |] and claims have been assigned to John Sims, individually, and John Sims, Trustee of the G&M 16 || Baker 1994 Trust. 17 | Dated: August 25, 2020 By the Court [18] 19 Qf] [20] Ronald H. Sargis, Judge ON United States Bankraptcy bet t [1] Instructions to Clerk of Court 2 Service List - Not Part of Order/Judgment 3 The Clerk of Court is instructed to send the Order/Judgment or other court generated document transmitted herewith to the parties below. The Clerk of Court will send the document 4 via the BNC or, if checked ____, via the U.S. mail. [5] Debtor(s) Attorney for the Debtor(s) (if any) [6] 7 Bankruptcy Trustee (if appointed in the Office of the U.S. Trustee case) Robert T. Matsui United States Courthouse 8 501 I Street, Room 7-500 Sacramento, CA 95814 [9] Attorney for the Trustee (if any) Jamie P. Dreher, Esq. 10 621 Capitol Mall, 18th Floor Sacramento, CA 95814 [11] Walter J. Schmidt, Esq. Amanda L. Marutzky, Esq. 12 1501 F Street 2040 Main Street, Ste. 300 P.O. Box 3307 Irvine, CA 92614 13 Modesto, CA 95353-3307 Sara Donnersbach, Esq. [14] 323 W. Lakeside Avenue, #200 Cleveland, OH 44113-1009