Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_13-cv-02426/USCOURTS-casd-3_13-cv-02426-1/pdf.json

Nature of Suit Code: 422
Nature of Suit: Bankruptcy Appeals Rule 28 USC 158
Cause of Action: 28:0158 Notice of Appeal re Bankruptcy Matter (BAP)

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UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF CALIFORNIA

In Re: 

YBA NINETEEN, LLC, 

Debtor. 

YBA NINETEEN, LLC,

 Appellant,

v.

INDYMAC VENTURE, LLC,

 Appellee.

 

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Civil No. 13cv2426-WQH-RBB

Bankruptcy No. 13-00968-LA11

[Bankruptcy Appeal #3]

ORDER

HAYES, Judge:

The matter before the Court is the Renewed Ex Parte Motion for Stay Pending Appeal,

filed by Appellant YBA Nineteen, LLC (“YBA” or “Debtor”). (ECF No. 11).

I. Background

On October 8, 2013, YBA, the debtor in the underlying bankruptcy case, filed a Notice

of Appeal of an “Order Converting Case to One Under Chapter 7” (“Order Converting

Case”), issued by the Bankruptcy Court on October 4, 2013. (ECF No. 1). The Order

Converting Case converted the underlying bankruptcy proceeding from one under Chapter

11 to one under Chapter 7. The Bankruptcy Court ordered that “[p]ursuant to 11 U.S.C. §

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1112(b)(4), this case be converted to one under Chapter 7 for ‘cause’ including: (1) Debtor’s

continuing failure to comply with the Scheduling Order; (2) Debtor’s failure to timely file

[Monthly Operating Reports]; and (3) the substantial and continuing loss to or diminution

of the estate and the absence of reasonable likelihood of rehabilitation.” Id. at 8 (citing 11

U.S.C. §§ 1112(b)(4)(A), (E) & (F)).

On October 8, 2013, YBA filed an election to have the appeal heard by this Court. Id. 

This is the third appeal to this Court in this bankruptcy proceeding. See In re YBA Nineteen,

S.D. Cal. Case No. 13cv1326-WQH-RBB; In re YBA Nineteen, S.D. Cal. Case No.

13cv2239-WQH-RBB.1

On October 15, 2013, YBA filed an Ex Parte Motion for Stay Pending Appeal. (ECF

No. 4). YBA moved pursuant to Federal Rule of Bankruptcy Procedure 8005 for an order

staying the Bankruptcy Court’s Order Converting Case.

On October 17, 2013, the Court issued an Order denying the Ex Parte Motion for Stay

Pending Appeal. (ECF No. 7). The Court found that YBA had failed to demonstrate that

irreparable injury was likely in the absence of a stay of the Order Converting Case.

On October 30, 2013, YBA filed the Renewed Ex Parte Motion for Stay Pending

Appeal. (ECF No. 11). YBA states:

[T]he Debtor requests that the District Court consider the application based on the developments since its Order was issued on October 17, 2013. These

developments include: 1. Debtor’s concession that absent a stay pending appeal it has lost control over the initial relief from stay appeal and Indymac

Adversary Action, as defined below, 2. Absent a stay pending appeal the Debtor has been, in essence, evicted from the Property of the estate; 3. Absent a stay pending appeal the Trustee will incur substantial legal costs and

contracting costs that would be avoided if the order converting the case is overturned.

Id. at 4.

On October 31, 2013, Appellee IndyMac Venture, LLC (“IndyMac”) filed an

opposition to the Renewed Ex Parte Motion for Stay Pending Appeal. (ECF No. 12). 

1

 In the second appeal, the Court issued a stay preventing Appellee IndyMac Venture, LLC from taking any further action as to the real property at issue. (S.D. Cal. Case No. 13cv2239, ECF No. 6).

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IndyMac contends that the motion should be denied for failure to show a likelihood of

irreparable injury, or alternatively, the Court should set a briefing schedule to allow IndyMac

to provide evidence to rebut the evidence offered in YBA’s motion.

On November 1, 2013, YBA filed a reply brief. (ECF No. 13).

II. Discussion

Federal Rule of Bankruptcy Procedure 8005 provides that a district court may order

a stay of a judgment, order or decree of a bankruptcy court pending appeal. See Fed. R.

Bankr. P. 8005. “When deciding whether to issue a discretionary stay pending a bankruptcy

appeal, courts use the following four factors: (1) Movant’s likelihood of success on the

merits of the appeal; (2) significant and/or irreparable harm that will come to Movant absent

a stay; (3) harm to the adverse party if a stay is granted; and (4) where the public interest

lies.” In re North Plaza, LLC, 395 B.R. 113, 119 (S.D. Cal. 2008) (citing Hilton v.

Braunskill, 481 U.S. 770, 776 (1987)); see also id. at 119-20 (noting that “these factors were

imported from the standard for deciding preliminary injunctions or staying them pending

appeal”). “[T]he person or entity seeking injunctive relief must demonstrate that irreparable

injury is likely in the absence of an injunction. An injunction will not issue if the person or

entity seeking injunctive relief shows a mere possibility of some remote future injury, or a

conjectural or hypothetical injury.” Park Vill. Apartment Tenants Ass’n v. Mortimer Howard

Trust, 636 F.3d 1150, 1160 (9th Cir. 2011) (quotations omitted). 

The Court has reviewed the evidence attached to the Renewed Ex Parte Motion for

Stay Pending Appeal, as well as the other filings in this appeal and the related appeals. The

Trustee’s actions toward the real property at issue, including hiring a contractor and security

guards, appear to be designed to improve or protect the property. Although YBA contends

that the Trustee’s actions will unnecessarily increase the costs to the estate, the Court does

not find that the Trustee’s alleged actions are unreasonable under the facts of this case. 

There is no evidence that the Trustee is attempting to finalize a sale of the property prior to

the resolution of this appeal. The Court does not find that the dismissal of adversarial action

against IndyMac supports a finding of irreparable injury because the dismissal was without

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prejudice and YBA has identified no statute of limitation issues which might prevent the

refiling of the adversarial action. The Court finds that YBA has failed to demonstrate that

the Trustee has taken actions that have caused or likely will cause YBA or the estate

irreparable injury. Because YBA has failed to meet its burden of demonstrating that

irreparable injury is likely in the absence of a stay, the Court “need not decide whether

[YBA] is likely to succeed on the merits.” Oakland Tribune, Inc. v. Chronicle Publ’g Co.,

762 F.2d 1374, 1376 (9th Cir. 1985). The Renewed Ex Parte Motion for Stay Pending

Appeal is denied.

III. Conclusion

IT IS HEREBY ORDERED that the Renewed Ex Parte Motion for Stay Pending

Appeal is DENIED. (ECF No. 11).

IT IS FURTHER ORDERED that the Court will hear oral argument on this appeal

from the bankruptcy court on January 31, 2014 at 10:00 a.m. in Courtroom 14B. The

Court orders the following appeal and briefing schedule: YBA shall file any briefing and

supporting exhibits or materials from the record on appeal no later than November 27, 2013;

IndyMac shall file any briefing and supporting exhibits or materials from the record no later

than December 20, 2013; YBA may file a reply brief no later than January 10, 2013. The

Trustee may file a brief in response to YBA’s brief no later than December 20, 2013. Any

requirements or provisions of Rules 8006-8009 of the Federal Rules of Bankruptcy

Procedure which are inconsistent with this Order are suspended pursuant to Federal Rule of

Bankruptcy Procedure 8019.

DATED: November 6, 2013

WILLIAM Q. HAYES

United States District Judge

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2014 (mdc)

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