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1 This disposition is not appropriate for publication. 

Although it may be cited for whatever persuasive value it may have

(see Fed. R. App. P. 32.1), it has no precedential value. See 9th

Cir. BAP Rule 8013-1.

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UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

In re: ) BAP No. CC-11-1625-PaDH

) 

SERRON INVESTMENTS, INC., ) Bankr. No. 11-12566-MT

)

Debtor. )

___________________________________)

)

SERRON INVESTMENTS, INC., )

)

Appellant, )

)

v. ) M E M O R A N D U M1

)

PACIFICA L 22, LLC, )

)

Appellee. )

___________________________________)

 Argued and Submitted on May 17, 2012 

at Pasadena, California

Filed - June 8, 2012

Appeal from the United States Bankruptcy Court

for the Central District of California

Honorable Maureen Tighe, Bankruptcy Judge, Presiding 

Appearances: Moises Saul Bardavid argued for appellant Serron

Investments, Inc.; Martin Phillips argued for

appellee Pacific L 22, LLC. 

Before: PAPPAS, DUNN and HOLLOWELL, Bankruptcy Judges.

FILED

JUN 08 2012

SUSAN M SPRAUL, CLERK

U.S. BKCY. APP. PANEL

OF THE NINTH CIRCUIT
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2

 Unless otherwise indicated, all chapter, section and rule

references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and

the Federal Rules of Bankruptcy Procedure, Rules 1001-9037.

3 The bankruptcy court would later determine, as to Serron,

First Yorkshire and Durham Development, that “they’re all the same

people.” Tr. Hr’g 6:7, September 22, 2011.

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Chapter 112 debtor Serron Investments, Inc. (“Serron”)

appeals the bankruptcy court’s order dismissing its bankruptcy

case. We AFFIRM.

FACTS

Unless noted, the material facts in this case are undisputed.

Serron, a Delaware corporation engaged in the business of

acquiring and selling interests in real property, acquired title

to a property on Tryon Road in Los Angeles (the “Property”) from

Alejandro Elias Weissman (“Weissman”) on January 26, 2009. At

that time, the Property was already encumbered by a first deed of

trust in the amount of $1,320,000, dated January 22, 2009, in

favor of East-West Bank. The beneficial interest in this deed of

trust was assigned to appellee Pacifica L 22, LLC (“Pacifica”) on

September 15, 2010. 

Serron executed two other trust deeds on the Property: a

second deed of trust for $265,000 in favor of First Yorkshire

Holdings, Inc. (“First Yorkshire”); and a third deed of trust for

$245,000 in favor of Durham Development Company, Inc. (“Durham

Development”).3

 Both the second and third trust deeds were dated

April 9, 2010, executed April 13, 2010, and recorded on

November 30, 2010. 

On December 22, 2010, Serron executed a Grant Deed

transferring a 25 percent interest in the Property to Weissman. 
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4

 The Panel in First Yorkshire vacated the stay relief order

granted under § 362(d)(2) and (d)(4), because the bankruptcy court

had not made adequate findings of fact under Civil Rule 52(a) to

support its orders. The Panel remanded the matter to the

bankruptcy court to provide those findings. However, the Panel’s

decision in First Yorkshire is not relevant in the current appeal.

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The Grant Deed bears the notation, “This is a bonafide gift and

the grantor received nothing in return.”

The next day, December 23, 2010, First Yorkshire, the

beneficiary of the second deed of trust, filed a petition for

relief under chapter 11. Bankr. C.D. Cal. Case no. 10-26058-AA. 

At that time, the monthly payments on the Pacifica first deed of

trust were in default for seven payments totaling $9,116.92. 

Neither Serron nor First Yorkshire made any payments on the first

trust deed after First Yorkshire filed for bankruptcy, so Pacifica

filed a motion for stay relief on January 31, 2011. After a

hearing on March 2, 2011, the motion for relief from stay was

granted under § 362(d)(2) and (d)(4) by order entered on March 28,

2011, in which the First Yorkshire bankruptcy court noted that

“the filing of the [First Yorkshire] petition was part of a scheme

to delay, hinder and defraud creditors that involved either []

transfer of all or part ownership of, or other interest in the

Property without the consent of the secured creditor or court

approval.” First Yorkshire appealed the stay relief to the Panel,

and on May 10, 2012, the Panel entered its Opinion vacating the

stay relief order. First Yorkshire Holdings, Inc. v. Pacifica L

22, LLC (In re First Yorkshire Holdings, Inc.), ___ B.R. ___, 2012

WL 1658250 (9th Cir. BAP 2012).4

The day before the stay relief hearing in the First Yorkshire

bankruptcy case, on March 1, 2011, Serron filed a chapter 11
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5 Later, in response to the U.S. Trustee’s motion to dismiss,

Serron admitted that the only cash asset listed in the schedules

was the $500 its principal had deposited in the bank at the time

of the petition filing to fund a DIP account.

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petition. Serron’s schedules listed the first deed of trust in

favor of Pacifica as a disputed debt for $1,386,326.00, and

undisputed deeds of trust in favor of First Yorkshire for $265,000

and Durham Development for $245,000. The only asset listed in

Serron’s schedules was the Property, other than an unknown amount

of cash.5

The bankruptcy court entered an Order Setting Scheduling and

Case Management Conference on March 15, 2011. That order informed

Serron and other interested parties “that based upon the Court’s

records and evidence presented at the status conference, the Court

may take any of the following actions at the status conference (or

at any continued hearing) without further notice: 1. Dismiss the

case[.]” A copy of that order was electronically served on the

attorney for Serron. 

The U.S. Trustee (“UST”) moved to dismiss, or to convert the

Serron chapter 11 case to a chapter 7 case, on June 13, 2011. The

UST alleged that Serron had failed to file a variety of documents,

including monthly reports, tax returns, and sales receipts, among

others. After Serron substantially complied with the UST’s

demands, the UST withdrew its motion to dismiss or convert on

July 15, 2011.

Pacifica filed a motion for relief from stay in the Serron

bankruptcy case on August 26, 2011. Pacifica alleged cause for

relief existed under § 362(d)(1) (alleging as “cause,” lack of an

adequate equity cushion, declining fair market value, and lack of
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payments), § 362(d)(2)(A) (alleging that Serron lacked equity in

the Property), § 362(d)(3) (alleging that Serron had failed to

file a confirmable plan in the single asset real estate case, or

to commence payments, within 90 days of the bankruptcy filing),

and § 362(d)(4) (alleging that the bankruptcy filing was part of

scheme to defraud creditors). At that time, the payments on the

Pacifica first deed of trust had been in default for fifteen

months. 

The bankruptcy court conducted a continuing status conference

and hearing on Pacifica’s motion for relief from stay on

September 22, 2011. Tr. Hr’g I-ii, September 22, 2011. Counsel

for Serron, Pacifica, and the UST were present and heard. After

reviewing the evidence and hearing from counsel, the bankruptcy

court granted relief from stay to Pacifica. As to § 362(d)(2),

the court ruled that the appraisals submitted into evidence “are

insufficient to show adequate value or any equity to protect

[Pacifica].” Tr. Hr’g 10:8-10, September 22, 2010. As to

§ 362(d)(4), the court ruled “the transfer of [a] fractional

interest [by Serron to Weissman] prepetition indicates that this

is an abusive case solely for delay purposes in bad faith.” Tr.

Hr’g 10:21-23.

And as to § 362(d)(3), the bankruptcy court observed that

Serron had failed to contest that cause for stay relief existed

under this Code provision in its opposition or briefing. The

court presumed that Serron’s case was a single asset real estate

case, and thus, its failure to submit a plan within 90 days, or

begin payments to Pacifica, was grounds for relief from stay under
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6

 At oral argument before the Panel, Serron insisted that

§ 362(d)(3) was inapplicable in its bankruptcy case, and that the

bankruptcy court had erred by assuming that Serron’s case was a

single asset real estate case. See § 101(51B) (defining “single

asset real estate” to exclude “residential real property with

fewer than 4 residential units . . . .”). However, the bankruptcy

court’s stay relief order is not before the Panel in this appeal. 

In making its decision on dismissal, the bankruptcy court did not

rely on the conclusion that Serron’s case was a single asset real

estate case, but instead concluded that Serron had not confirmed a

plan, could not confirm a plan, and had failed to comply with the

UST Guidelines.

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§ 362(d)(3).6 But the court went on to note that “even if that

were not the case,” Serron had presented “absolutely no plan and

[made] no progress towards reorganization in nine months[.]” Tr.

Hr’g 9:17-19. Finally, the bankruptcy court noted that the UST

had advised the court that Serron was again failing to provide

requested documents, and the court expressed concern that if

relief from the stay were granted to Pacifica concerning Serron’s

only asset, there would be nothing to reorganize and the

bankruptcy case should not go forward. For these reasons, the

bankruptcy court therefore granted Pacifica relief from stay under

§ 362(d)(2),(3) and (4). However, it also decided that the

bankruptcy case should be dismissed. 

An order granting Pacifica relief from stay was entered on

October 19, 2011. An order dismissing the bankruptcy case was

entered a few days later, on October 24, 2011. In the dismissal

order, the bankruptcy court amplified its grounds: “The Debtor has

failed to confirm a plan of reorganization and it appeared as if

the Debtor was not going to be able to reorganize its debts based

on the fact that the Court granted relief to the secured creditor

to pursue its state court remedies against the Debtor’s sole

asset. In addition, the Debtor was not in compliance with the
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United States Trustee Chapter 11 Notices and Guides.”

Serron filed a notice of appeal regarding the order to

dismiss the bankruptcy case on November 7, 2011. This is the

appeal now before the Panel, No. CC-11-1625. On the same day,

Serron filed a notice of appeal concerning the order granting stay

relief to Pacifica, No. CC-11-1626. This was nineteen days after

entry of the stay relief order. Because Rule 8002(a) requires

that a notice of appeal be filed within fourteen days of entry of

the order on appeal, Serron’s failure to timely appeal the stay

relief order divested the Panel of jurisdiction to hear the

appeal. Preblich v. Battley, 181 F.3d 1048, 1056 (9th Cir. 1999). 

See also Disabled Rights Action Comm. v. Las Vegas Events, Inc.,

375 F.3d 861, 869 (9th Cir. 2004)(filing of effective notice of

appeal is a nonwaivable jurisdictional requirement). After notice

to Serron, on April 26, 2012, the Panel entered an order

dismissing the stay relief appeal as untimely. As a result, this

decision addresses only the bankruptcy court’s order dismissing

Serron’s bankruptcy case. 

JURISDICTION

The bankruptcy court had subject matter jurisdiction under

28 U.S.C. §§ 1334 and 157(b)(2)(A). The Panel has jurisdiction

under 28 U.S.C. § 158.

ISSUE

Whether the bankruptcy court abused its discretion in

dismissing Serron’s bankruptcy case.

STANDARD OF REVIEW

We review the bankruptcy court’s order dismissing a

chapter 11 case under § 1112(b) for abuse of discretion. Marsch
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v. Marsch (In re Marsch), 36 F.3d 825, 828 (9th Cir. 1994); St.

Paul Self Storage Ltd. P’ship v. The Port Authority of the City of

St. Paul (In re St. Paul Self Storage), 185 B.R. 580, 582 (9th

Cir. BAP 1995). 

In applying an abuse of discretion test, we first "determine

de novo whether the [bankruptcy] court identified the correct

legal rule to apply to the relief requested." United States v.

Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc). If the

bankruptcy court identified the correct legal rule, we then

determine whether its "application of the correct legal standard

[to the facts] was (1) illogical, (2)implausible, or (3) without

support in inferences that may be drawn from the facts in the

record." Id. (internal quotation marks omitted). If the

bankruptcy court did not identify the correct legal rule, or its

application of the correct legal standard to the facts was

illogical, implausible, or without support in inferences that may

be drawn from the facts in the record, then the bankruptcy court

has abused its discretion. Id.

DISCUSSION

As discussed above, this appeal focuses solely on the

bankruptcy court’s order dismissing Serron’s bankruptcy case. In

that respect, the procedural status of this appeal is problematic

for Serron. 

Although, with the Panel’s permission, the parties filed

joint briefs in Serron’s two appeals of the stay relief and

dismissal orders, Serron’s briefs address only its position

concerning the order granting Pacifica relief from stay. Except

for a cryptic reference to the order dismissing the case in its
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statement of issues in its opening brief, Serron’s Op. Br. at 2,

Serron’s briefs offer no discussion or analysis of its position

that the bankruptcy court erred in dismissing its chapter 11 case. 

As the Ninth Circuit recently pointed out, as an appellate

tribunal, “[w]e review only issues which are argued specifically

and distinctly in a party's opening brief.” Leigh v. Salazar,

677 F.3d 892, 897 (9th Cir. 2012) (quoting Greenwood v. Fed.

Aviation Admin., 28 F.3d 971, 977 (9th Cir. 1994)). Moreover, an

argument will not be saved by a mere summary mention in a party’s

opening brief. UMG Recordings, Inc. v. Shelter Capital Partners,

LLC, 667 F.3d 1022, 1031 (9th Cir. 2011).

After Pacifica observed in its brief that Serron had failed

to argue grounds for its appeal of the dismissal order, Serron

inexplicably compounded its error by failing to provide arguments

concerning the dismissal order in its reply brief, making but a

single conclusory observation: “Dismissal was plainly based on the

fact that the estate, after a finding for relief, had been

divested of its largest asset.” Serron Reply Br. at 7. Simply

put, nowhere in Serron’s briefs is there any developed argument or

authority that the bankruptcy court abused its discretion in

dismissing the bankruptcy case.

On the other hand, the record discloses the existence of

ample cause to justify the bankruptcy court’s decision to dismiss.

In its comments on the record, and in its formal order, the

bankruptcy court expressed a variety of reasons why it should

exercise its discretion to dismiss — that Serron had failed to

propose a confirmable plan; that it appeared Serron would be

unable to reorganize because Pacifica had been given permission to
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foreclose its trust deed on Serron's sole asset; and that Serron

had not complied with the UST’s operating guidelines. The Code

and case law make clear that these concerns constitute adequate

cause for dismissal of a bankruptcy case.

 The statutory authority for dismissal of a chapter 11 case,

§ 1112(b), provides that “the court shall convert a case under

this chapter to a case under chapter 7 or dismiss a case under

this chapter, whichever is in the best interests of creditors and

the estate, for cause unless the court determines that the

appointment . . . of a trustee or examiner is in the best interest

of the creditors and the estate.” § 1112(b)(1). Thus, if cause

is present, the court must grant relief and determine whether

dismissal, conversion, or appointment of a trustee or examiner is

in the best interest of creditors and the estate. Once cause has

been established, under § 1112(b)(2), the burden shifts to the

party opposing conversion, dismissal, or appointment of a trustee

or examiner. Explaining the operation of this provision, the

bankruptcy court in In re Orbit Petroleum, Inc., 395 B.R. 145, 148

(Bankr. D.N.M. 2008), noted:

Once "cause" has been demonstrated, the Court must

convert or dismiss, unless the Court specifically

identifies "unusual circumstances . . . that establish

that such relief is not in the best interest of

creditors and the estate." 11 U.S.C. § 1112(b)(1).

However, absent unusual circumstances, the court must

not convert or dismiss a case if (1) there is a

reasonable likelihood that a plan will be confirmed

within a reasonable time, (2) the "cause" for dismissal

or conversion is something other than a continuing loss

or diminution of the estate coupled with a lack of

reasonable likelihood of rehabilitation; and (3) there

is reasonable justification or excuse for a debtor's act

or omission and the act or omission will be cured in a

reasonable time.

"Cause" for dismissal is not defined in the Code; instead,
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the Code contains a non-exclusive list of examples of cause in

§ 1112(b)(4). In re Marsch, 36 F.3d at 828. Among the reasons

listed providing an adequate basis for dismissal of a chapter 11

case are: “substantial or continuing loss to or diminution of the

estate and the absence of a reasonable likelihood of

rehabilitation”, § 1112(b)(4)(A); and “failure timely to provide

information or attend meetings reasonably requested by the United

States trustee (or the bankruptcy administrator, if any),”

§ 1112(b)(4)(H). Fairly interpreting the comments and order of

the bankruptcy court, the record demonstrates these two causes for

dismissal were present in Serron’s case. 

Section 1112(b)(4)(A) "provides the bankruptcy court with the

requisite authority to terminate a chapter 11 case based on a

showing of unreasonable delay, or continuing losses coupled with

the absence of a reasonable likelihood of rehabilitation, or

inability to effectuate a plan of reorganization." United Sav.

Ass'n of Tex. v. Timbers of Inwood Forest Assocs., Ltd. (In re

Timbers of Inwood Forest Assocs., Ltd.), 808 F.2d 363, 371 (5th

Cir. 1987) (en banc), aff'd 484 U.S. 365 (1988); Sun Valley

Newspapers v. Sun World Corp. (In re Sun Valley Newspapers),

171 B.R. 71, 74 (9th Cir. BAP 1994) (citing Timbers of Inwood

Forest Assocs. for the proposition that there must be "a

reasonable possibility of a successful reorganization within a

reasonable time."). In connection with this statutory provision,

the bankruptcy court must “evaluate each debtor's viability and

rate of progress in light of the ‘best interest of creditors and

the estate.’" Timbers of Inwood Forest Assocs., 808 F.2d at 372. 

Section 1112(b)(4) is often invoked by bankruptcy courts when
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a chapter 11 debtor’s assets are swiftly being reduced. Here,

however, in one stroke, the bankruptcy court potentially reduced

the assets of Serron’s bankruptcy estate available for

reorganization to zero. Allowing the major secured creditor to

foreclose on Serron’s one and only significant asset constitutes a

classic cause for dismissal of a reorganization case. In re

Jer/Jameson Mezz Borrower II, LLC, 461 B.R. 293, 302 (Bankr. D.

Del. 2011) (where chapter 11 debtor is not operating and sole

asset is fully encumbered, dismissal under § 1112(b)(4) is

mandatory); see Kenneth N. Klee, One Size Fits All: Single Asset

Real Estate Bankruptcy Cases, 87 CORNELL L. REV. 1285, 1308

(September 2002) (“If . . . the mortgage holder gets relief from

the automatic stay and the right to foreclose on the property

. . . the Chapter 11 case is over. Although this might be good

news for the mortgage holder, it is bad news for the property

owner who loses the opportunity to reorganize.”).

Under the facts of this case, the bankruptcy court did not

abuse its discretion when it found that, because it had granted

stay relief to Pacifica, Serron’s ability to propose and confirm a

plan of reorganization was lost. Continuing the bankruptcy case

where there is no possibility of reorganization cannot be in the

best interest of the creditors. 

The UST had, earlier in the bankruptcy case, moved for

dismissal because Serron had failed to comply with its duty to

file documents and reports about its operations. The UST has a

statutory duty and authority to require, monitor and seek court

enforcement of a chapter 11 debtor’s compliance with the UST’s

guidelines and reports. 28 U.S.C. § 586(a)(3)(D). Although the
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UST withdrew its motion when Serron complied with its demands, at

the hearing on September 22, 2011, the UST informed the bankruptcy

court that Serron again was in arrears on its obligations to

provide information. It is of no moment that there was no current

motion from the UST to dismiss the case. The Panel long ago

recognized that a bankruptcy court has the authority, sua sponte,

to dismiss a bankruptcy case for cause. Tennant v. Rojas (In re

Tennant), 318 B.R. 860, 869 (9th Cir. BAP 2004) (“Section 105(a)

makes ‘crystal clear’ the court's power to act sua sponte where no

party in interest or the United States trustee has filed a motion

to dismiss a bankruptcy case.”); see also C-TC 9th Ave. P'ship v.

Norton Co. (In re C-TC 9th Ave. P'ship), 113 F.3d 1304, 1312 (2d

Cir. 1997) (“When the record is sufficiently well developed to

allow the bankruptcy court to draw the necessary inferences to

dismiss a Chapter 11 case for cause, the bankruptcy court may do

so.”). Serron was offered an opportunity at the September 22,

2011 hearing to respond to the UST’s allegation about its failure

to comply with reporting requirements, but did not challenge the

UST’s assertion or request more time to comply. The bankruptcy

court could therefore properly conclude that, under

§ 1112(b)(4)(H), cause also existed to dismiss the bankruptcy case

for Serron’s failure to comply with the UST’s information

requests.

In sum, Serron has not provided any argument or authority to

support its challenge to the bankruptcy court’s order dismissing

the case. Moreover, the bankruptcy court’s order is consistent

with the statutory provisions governing dismissals in chapter 11,

§ 1112(b), and the court’s findings and conclusions in this case
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were not illogical, implausible, or without support in the

inferences that may be drawn from the facts in the record. 

CONCLUSION

The bankruptcy court did not abuse its discretion in

dismissing Serron’s chapter 11 bankruptcy case. We AFFIRM.