Court Opinion

ID: 858130
Source: CourtListenerOpinion
Date Created: 2013-04-16 17:27:32.475392+00
Date Added: 2024-06-11T13:08:41.280603
License: Public Domain

FILED
                                                          APR 15 2013
 1
                                                      SUSAN M SPRAUL, CLERK
                                                        U.S. BKCY. APP. PANEL
 2                                                      OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
                              OF THE NINTH CIRCUIT
 4
 5   In re:                        )       BAP No.    CC-12-1479-TaPaKi
                                   )
 6   MERUELO MADDUX PROPERTIES,    )       Bk. No.    09-13356-VK
     INC.,                         )
 7                                 )
               Reorganized Debtor. )
 8   ______________________________)
                                   )
 9   EVOQ PROPERTIES, INC., f/k/a )
     MERUELO MADDUX PROPERTIES,    )
10   INC.,                         )
                                   )
11                  Appellant,     )
                                   )
12   v.                            )       M E M O R A N D U M*
                                   )
13   JOHN CHARLES MADDUX,          )
                                   )
14                  Appellee.      )
     ______________________________)
15
                    Submitted and Argued on March 22, 2013
16                          at Pasadena, California
17                           Filed - April 15, 2013
18             Appeal from the United States Bankruptcy Court
                   for the Central District of California
19
        Honorable Victoria S. Kaufman, Bankruptcy Judge, Presiding
20                   ________________________________
21   Appearances:     Christopher E. Prince of Lesnick Prince & Pappas
                      LLP for Appellant Evoq Properties, Inc., formerly
22                    known as Meruelo Maddux Properties, Inc.; David
                      Shemano of Peitzman Weg LLP for Appellee John
23                    Charles Maddux
                       __________________________________
24
     Before:   TAYLOR, PAPPAS, and KIRSCHER, Bankruptcy Judges.
25
26        *
             This disposition is not appropriate for publication.
27   Although it may be cited for whatever persuasive value it may
     have (see Fed. R. App. P. 32.1), it has no precedential value.
28   See 9th Cir. BAP Rule 8013-1.

                                       1
 1                             INTRODUCTION
 2        Appellant EVOQ Properties, Inc., formerly known as Meruelo
 3   Maddux Properties, Inc. (“MMPI”), is the reorganized debtor in
 4   jointly administered chapter 11 cases1 (“Reorganized Debtor”).
 5   It appeals from a bankruptcy court order allowing John Charles
 6   Maddux (“Maddux”) to pursue enforcement of the advancement
 7   provisions of a pre-petition indemnity agreement (“Indemnity
 8   Agreement”) in a non-bankruptcy forum.   Maddux seeks advancement
 9   of defense costs in connection with post-confirmation litigation
10   based on allegations of Maddux’s pre- and post-petition wrongful
11   conduct as an officer and director of MMPI.2   Having first
12   concluded that appellate jurisdiction is proper, we AFFIRM.
13                   PROCEDURAL AND FACTUAL BACKGROUND
14        On or about March 26, 2009, MMPI and fifty-three related
15   entities filed voluntary petitions under chapter 11.   On
16
17
18
19        1
             We exercised our discretion and independently reviewed
     certain imaged documents from the bankruptcy court’s electronic
20
     docket. See O’Rourke v. Seaboard Sur. Co. (In re E.R. Fegert,
21   Inc.), 887 F.2d 955, 957-58 (9th Cir. 1989); Atwood v. Chase
     Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th
22   Cir. BAP 2003). In so doing, we determined that on April 7,
     2009, the bankruptcy court ordered joint administration of MMPI’s
23
     bankruptcy case with 53 related cases under MMPI’s case no.
24   09-13356 (“Joint Administration Order”).

25        2
             Procedurally, the confusing record required that we
     analyze whether the order on appeal is final or interlocutory.
26   By order filed March 6, 2013, we required that the parties
27   further brief finality issues in advance of oral argument and
     instructed the parties to be prepared to argue finality at oral
28   argument.

                                     2
 1   September 23, 2009, Maddux3 filed proofs of claim, each in the
 2   amount of $8.5 million, in the MMPI case and in another
 3   affiliated case.4   Maddux also filed a proof of claim in a third
 4   affiliated case, but in the amount of $8 million.   Maddux
 5   attached an identical 5-page “Addendum” to each proof of claim
 6   that describes the bases for the aggregated claim amount,
 7   including:   a contribution agreement; the Indemnity Agreement;
 8   subrogation; and an employment agreement.   The Addendum contains
 9   a “Reservation of Rights” that includes a statement that the
10   documents supporting the claims “are too voluminous to attach,”
11   along with an offer to make copies available upon appropriate
12   request (hereinafter, we refer to Maddux’s filed proofs of claim
13   collectively as the “Proofs of Claim”).   Maddux never attached
14   copies of the referenced documents to the Proofs of Claim.
15        On June 24, 2011, after trial on competing proposed plans,
16   the bankruptcy court entered an order confirming the plan of
17   reorganization (the “Charlestown Plan”) proposed by two of MMPI’s
18
19
20
          3
21           Maddux, individually and as trustee of the John Charles
     Maddux Trust U/D/T (“Trust”), and Sunstone Bella Vista, LLC
22   (“Sunstone”) each filed a proof of claim in the amount of
     $8.5 million in two of the affiliated cases. As only Maddux,
23
     individually, appealed from the order at issue here, we do not
24   further discuss the Trust or Sunstone.

25        4
             The Joint Administration Order directed claimants to file
     proofs of claim in the case directly related to their claims and
26   to use the caption and case number for that case when so doing.
27   It also, however, directed use of the MMPI case number, caption,
     and docket in connection with all other filings in the
28   administratively consolidated cases.

                                      3
 1   minority shareholders (the “Plan Proponents”).5   Very generally
 2   stated, the Charlestown Plan provided for payment in full to
 3   holders of undisputed unsecured claims on the Effective Date6 and
 4   for payment to holders of secured claims either by surrender of
 5   collateral or through payment over a four-year period.    In
 6   addition, the Charlestown Plan provides for retention of:      “All
 7   claims against the Debtors’ Insiders, employees, and/or agents
 8   relating to pre-confirmation and/or pre-petition conduct,
 9   including without limitation, claims for fraud, breach of
10   fiduciary duty or negligence.”   Charlestown Plan at 116:8-10.
11        After confirmation, the Reorganized Debtor formed a new
12   board of directors, and, at some point not clear on this record,
13   Maddux lost his positions as an officer and director.
14   Claim Objection.
15        On January 23, 2012, the Reorganized Debtor filed an
16   objection to and Motion for Disallowance of the Proofs of Claim,
17   seeking disallowance to the extent the claims were based on the
18   contribution agreement and the Indemnity Agreement (the
19
20        5
             The parties did not include in the record on appeal the
21   final version of the confirmed Charlestown Plan. The Reorganized
     Debtor, however, included a copy of the Order Confirming the
22   Charlestown Plan (“Confirmation Order”). Exhibit 1 to the
     Confirmation Order refers to docket number 3223, which is the
23
     Notice of Filing of Third Modified Fourth Amended Chapter 11 Plan
24   of Reorganization Dated October 14, 2010. We exercised our
     discretion to independently review the Charlestown Plan. Fegert,
25   887 F.2d at 957-58.
26        6
             The Amended Notice of Entry of Confirmation Order,
27   Occurrence of Effective Date and Bar Date for Administrative
     Claims, which we located on the bankruptcy court docket at #3317,
28   gives notice that the Effective Date occurred on July 25, 2011.

                                      4
 1   “Disallowance Motion”).7   Maddux filed a Notice of Qualified Non-
 2   Objection, but expressly reserved his right to seek
 3   reconsideration for cause under 11 U.S.C. § 502(j)8 if the
 4   Reorganized Debtor later asserted claims against him where he had
 5   a contractual right to contribution or indemnity.      After hearing,
 6   the bankruptcy court entered an order granting the Disallowance
 7   Motion without prejudice to Maddux’s rights under section 502(j)
 8   (“Disallowance Order”).
 9   Reconsideration Motion.
10        The same day that the bankruptcy court entered the
11   Disallowance Order, the Reorganized Debtor sued Maddux and others
12   in the California Superior Court (“State Court Action”).      In
13   response, Maddux filed a Motion for Reconsideration of the
14   Disallowance Order based on section 502(j) and Rules 3008 and
15   9023 (“Reconsideration Motion”).       Maddux stated therein that:
16   “Maddux is not requesting the Court to adjudicate the validity of
17   his indemnity Claims but is simply asking the Court to reconsider
18   its order disallowing those Claims.”       Reconsideration Motion at
19   8:25-27 (emphasis in original).    He attached a copy of the
20   Indemnity Agreement as Exhibit A to the Reconsideration Motion.
21
22        7
             In the Objection, the Reorganized Debtor mentions that it
     had already objected to certain “employment related wage claims
23
     of Maddux” [presumably including those contained in the filed
24   proofs of claim]. Neither party, however, addresses the legal
     implications and effect, if any, of this apparent piecemeal
25   manner of litigating objections to the Proofs of Claim.
26        8
             Unless otherwise specified, all chapter and section
27   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and
     all “Rule” references are to the Federal Rules of Bankruptcy
28   Procedure, Rules 1001-9037.

                                        5
 1        The Reorganized Debtor opposed the Reconsideration Motion,
 2   primarily on the grounds that Maddux’s claim for indemnity
 3   remained contingent.   The Reorganized Debtor argued that unless
 4   and until Maddux prevailed in the State Court Action, he could
 5   not establish a right to indemnification.
 6        In his reply (“Reply”), Maddux argued that the Indemnity
 7   Agreement provided him with a current, non-contingent, liquidated
 8   right to enforce his claim for advancement of attorney’s fees
 9   that he incurred in defending against the State Court Action
10   (“Advancement Claim”).    He also argued that the bankruptcy court
11   should “abstain from adjudicating the pending claim objection and
12   instead permit Maddux to seek relief in Delaware concerning his
13   entitlement to advancement of expenses and other indemnity
14   rights.”   Reply at 5:1-4.   Maddux based his request for
15   abstention on the governing law provision in the Indemnity
16   Agreement, the bankruptcy court’s limited post-confirmation
17   jurisdiction, and the alleged lack of effect on MMPI’s 100%
18   payout estate.   Thus, Maddux requested that the bankruptcy court
19   not only vacate the Disallowance Order, but also exercise its
20   discretion under 28 U.S.C. § 1334(c)(1) to abstain from
21   adjudicating the Advancement Claim and all other Indemnity
22   Agreement-based claims.
23        The Reorganized Debtor sought authorization from the
24   bankruptcy court on an emergency basis to file a sur-reply
25   (“Sur-reply”); the bankruptcy court granted this request.    In the
26   Sur-reply, the Reorganized Debtor argued that Maddux improperly
27   included new substantive legal arguments in the Reply;
28   inappropriately included the separate Advancement Claim as part

                                       6
 1   of Maddux’s claim for indemnification; and inaccurately argued
 2   that the determination would have no effect on the Reorganized
 3   Debtor such that a Delaware court should be allowed to determine
 4   whether Maddux’s newly asserted Advancement Claim was timely,
 5   time barred, discharged, or otherwise not allowable as a matter
 6   of bankruptcy law.   The Reorganized Debtor finally argued that
 7   the Charlestown Plan preserved jurisdiction in the bankruptcy
 8   court over all such issues, and, in any event, that the
 9   Charlestown Plan discharged the alleged Advancement Claim.
10        At the initial hearing on the Reconsideration Motion, the
11   bankruptcy court addressed indemnification, continued the hearing
12   as to the Advancement Claim, and allowed Maddux to submit an
13   order pending final resolution.   The bankruptcy court entered an
14   order after the hearing granting the Reconsideration Motion in
15   part (the “First Order”).   In the First Order, the bankruptcy
16   court initially vacated the Disallowance Order as to claims by
17   Maddux for “indemnity, contribution or reimbursement, including a
18   claim or right to advancement of expenses arising from or
19   relating to” the State Court Action, defined therein as an
20   “Indemnity Claim.”   First Order (Bk. Dkt. #3800) at 3:4-7.
21   Second, the bankruptcy court abstained therein from “all matters
22   and proceedings relating to any dispute concerning an Indemnity
23   Claim, including allowance or disallowance . . . pursuant to
24   section 502(b), (c), or (e). . . .”   Id. at 3:11-14.   Third, and
25   specifically notwithstanding its abstention, the First Order
26   provided that: “this Court shall not abstain and shall retain
27   jurisdiction to determine whether any claim or right of Maddux to
28   advancement of expenses pursuant to paragraph 5 of the Indemnity

                                       7
 1   Agreement or otherwise is time-barred and discharged pursuant to
 2   any bar date order entered in the Debtors’ bankruptcy cases or
 3   the [Charlestown Plan].”   Id. at 3:17-21.   Finally, the First
 4   Order established deadlines for additional briefing regarding the
 5   Advancement Claim.
 6   Advancement Claim.
 7        At the hearing on the Advancement Claim and in its briefing,
 8   the Reorganized Debtor argued that the Advancement Claim was an
 9   entirely new claim, not merely a new argument.   It asserted that
10   Maddux failed to timely assert the Advancement Claim because
11   Maddux did not attach a copy of the Indemnity Agreement to the
12   Proofs of Claim and did not specifically identify the Advancement
13   Claim in the Addendum to the Proofs of Claim.    Relying on
14   Delaware case authority that characterized a claim for
15   advancement of expenses as a claim for relief separate from a
16   claim for indemnification, Majkowski v. Am. Imaging Mgmt. Servs.,
17   LLC, 913 A.2d 572, 586-87 (Del. Ch. 2006), the Reorganized Debtor
18   argued that Maddux’s assertion of a contingent claim for
19   indemnity was insufficient to assert a claim for advancement of
20   expenses.   Further, the Reorganized Debtor argued that Maddux
21   should not be allowed to amend the Proofs of Claim to add the
22   Advancement Claim after the bar date, post-confirmation, and
23   after disallowance of the claim, and that Maddux had not and
24   could not satisfy the standards for amendment.   The Reorganized
25   Debtor argued that to force it to advance the costs of Maddux’s
26   defense represented a huge and present liability risk to the
27   estate.
28        Maddux argued that his right to advancement was based upon

                                      8
 1   paragraph 5 of the Indemnity Agreement.   He argued that he
 2   satisfied all requirements of Rule 3001 and preserved all claims
 3   based on the Indemnity Agreement when he referred to it in the
 4   Addendum.   Alternatively, Maddux argued that he should be allowed
 5   to amend the Proofs of Claim, if deemed necessary by the
 6   bankruptcy court.
 7        The bankruptcy court found that the Advancement Claim was
 8   not time barred.    It reasoned that advancement was a contractual
 9   right under the Indemnity Agreement that was incorporated into
10   the Proofs of Claim by reference to the Indemnity Agreement in
11   the Addendum.   The bankruptcy court rejected the argument that
12   the Advancement Claim was time barred just “because the word
13   ‘advancement’ wasn’t in the proof of claim.”   Hr’g Tr. (July 30,
14   2012) at 54:1-3.    The bankruptcy court acknowledged that
15   indemnification and advancement are separate rights, but noted
16   that “they’re both provided in the agreement.”   Id. at 55:3-4.
17   And, near the conclusion of the hearing, the bankruptcy court
18   clarified the extent of its relief and stated that “it’s just now
19   – the advancement in particular is also included . . . .”     Id. at
20   54:12-19.   The bankruptcy court then stated that “this Court
21   isn’t going to be deciding the issues about advancement any more
22   than it’s deciding issues about indemnification.”   Id. at
23   54:23-25.
24        The order entered after the hearing (the “Second Order”),
25   stated that the Advancement Claim was not time barred, and “in
26   accordance with the Reconsideration Order, Maddux and the
27   Reorganized Debtors may seek adjudication of any dispute
28   concerning Maddux’s claim for advancement of expenses with

                                       9
 1   respect to the Indemnity Claim in any forum or venue permitted
 2   under applicable non-bankruptcy law.”     Second Order (Bk. Dkt.
 3   #3847) at 3:5-8.   The Reorganized Debtor filed a timely Notice of
 4   Appeal from the Second Order.
 5                              JURISDICTION
 6        The bankruptcy court had jurisdiction pursuant to 28 U.S.C.
 7   §§ 1334 and 157(b)(1) and (b)(2)(B) & (O).
 8        We have jurisdiction under 28 U.S.C. § 158(a) and (b) to
 9   hear appeals from final judgments, orders, and decrees; and with
10   leave of the Panel, from interlocutory orders and decrees of
11   bankruptcy judges.   The burden of demonstrating jurisdiction lies
12   with the party asserting it.    Kokkonen v. Guardian Life Ins. Co.
13   of Am., 511 U.S. 375, 379-80 (1994).    Here, the Reorganized
14   Debtor failed to include a statement of the basis for appellate
15   jurisdiction in its Opening Brief and we required additional
16   briefing in advance of oral argument regarding finality.
17   Finality of the Second Order.
18        The Reorganized Debtor appeals from the Second Order.      As
19   stated above, in the Second Order the bankruptcy court found that
20   the Advancement Claim was not time barred.    Ordinarily, an order
21   regarding the timeliness of a proof of claim is not a final order
22   as allowance or disallowance of the proof of claim remains to be
23   determined.   New Life Health Ctr. Co. v. IRS (In re New Life
24   Health Ctr. Co.), 102 F.3d 428 (9th Cir. 1996).     Here, however,
25   the bankruptcy court also abstained from further consideration of
26   the Advancement Claim and instructed that the parties should have
27   the merits of the Advancement Claim determined, along with all
28   other claims for indemnification, in a non-bankruptcy forum. This

                                      10
 1   decision to abstain is a final order as “its impact is to send
 2   [the claim] effectively out of court.”   Ernst & Young v.
 3   Matsumoto (In re United Ins. Mgmt., Inc.), 14 F.3d 1380, 1383
 4   (9th Cir. 1994).   Therefore, we have jurisdiction to hear this
 5   appeal as to the Second Order pursuant to 28 U.S.C. § 158.
 6   Scope of our review of issues.
 7        Maddux argues that we lack jurisdiction to review the
 8   abstention and reconsideration decisions.   He bases this argument
 9   on his assertions that the First Order was final as to these two
10   issues, even if not final as to the timeliness of the Advancement
11   Claim, and that the Reorganized Debtor failed to timely seek
12   appeal from the First Order.
13        The First Order, through which the bankruptcy court vacated
14   disallowance and abstained as to indemnification, specifically
15   reserved ruling as to the Advancement Claim and was clearly
16   interlocutory.   Ordinarily abstention would render an order
17   final, but the carve out as to abstention with respect to the
18   Advancement Claim renders the First Order not final.   The
19   bankruptcy court did not allow any particular claim and the First
20   Order did not resolve all issues related to the interaction
21   between the Indemnification Agreement and the State Court Action.
22   Even under the flexible pragmatic approach to finality of
23   bankruptcy court orders in the Ninth Circuit, the First Order was
24   not final.   See In re Frontier Props., Inc., 979 F.2d 1358, 1363
25   (9th Cir. 1992) (“a bankruptcy court order is appealable where it
26   1) resolves and seriously affects substantive rights and
27   2) finally determines the discrete issue to which it is
28   addressed.”).    Entry of the Second Order, however, resolved all

                                      11
 1   issues related to the Advancement Claim, allowed the entire
 2   dispute regarding the Indemnity Agreement to be decided by the
 3   state court, and resulted in the First Order becoming final.     See
 4   Worldwide Church of God v. Phila. Church of God, Inc., 227 F.3d
5   1110, 1114 (9th Cir. 2000).
 6        The Reorganized Debtor did not directly appeal from the
 7   First Order; however, it included in its Statement of Issues on
 8   Appeal:   “Whether the Bankruptcy Court erred in granting John
 9   Charles Maddux’s (and affiliated entities’) motion for
10   reconsideration with respect to the court’s prior order
11   disallowing his purported claim for advancement of expenses.”
12   Stmt. of Issues, Bk. Dkt. #3868 at 1:8-10.   By inclusion of this
13   issue related to the earlier order that became reviewable based
14   on the Second Order, we conclude that the Reorganized Debtor
15   adequately preserved this issue.
16        “[A]n appeal from the final judgment draws in question all
17   earlier non-final orders and all rulings which produced the
18   judgment.”   Munoz v. Small Bus. Admin., 644 F.2d 1361, 1364, 1363
19   (9th Cir. 1981) (“the rule is well settled that a mistake in
20   designating the judgment appealed from should not result in loss
21   of the appeal as long as the intent to appeal from a specific
22   judgment can be fairly inferred from the notice and the appellee
23   is not misled by the mistake.”)    Here, Maddux was not misled by
24   the alleged mistake, as the issue raised by the First Order has
25   been fully briefed.   Moreover, the Second Order necessarily
26   involved the bankruptcy court’s reconsideration of the
27   Disallowance Order.   The propriety of its consideration of
28   whether the Advancement Claim constituted a part of the Proofs of

                                       12
 1   Claim, therefore, is properly before this Panel.
 2        Almost in passing, Maddux argues on appeal that the
 3   Reorganized Debtor waived the abstention issue pursuant to
 4   Rule 8006.   Rule 8006, however, does not limit a party’s appeal
 5   from a bankruptcy court’s judgment.    See Gertsch v. Johnson &
 6   Johnson, Fin. Corp., 237 B.R. 160, 166 (9th Cir. BAP 1999).       We
 7   may consider arguments not specified in the Rule 8006 statement
 8   of issues “when a complete understanding of the case can be
 9   discerned from the briefs and the record.”   Id.   Here, we have a
10   complete understanding of the case from the briefs and the
11   record, including the key role and timing of the bankruptcy
12   court’s abstention ruling.   And, Maddux has not identified any
13   prejudice from the Reorganized Debtor’s failure to confine its
14   arguments to the issues stated in the Statement of Issues on
15   Appeal.   The Second Order contained the bankruptcy court’s
16   decision to abstain as to the Advancement Claim and review of the
17   abstention decision is appropriately within the scope of our
18   review here.
19                                 ISSUES
20        1.   Did the bankruptcy court abuse its discretion when it
21   reconsidered the Disallowance Order?
22        2.   Did the bankruptcy court err when it found that the
23   Advancement Claim was not time-barred and discharged?
24        3.   Did the bankruptcy court abuse its discretion when it
25   abstained from further consideration of the Advancement Claim?
26                           STANDARD OF REVIEW
27        We review the bankruptcy court's legal conclusions de novo,
28   and its findings of fact for clear error.    See Allen v. US Bank,

                                     13
 1   NA (In re Allen), 472 B.R. 559, 564 (9th Cir. BAP 2012) [“An
 2   order overruling a claim objection can raise legal issues (such
 3   as the proper construction of statutes and rules) which we review
 4   de novo, as well as factual issues (such as whether the facts
 5   establish compliance with particular statutes or rules), which we
 6   review for clear error.”].    A bankruptcy court’s grant of a
 7   motion for reconsideration is reviewed for abuse of discretion.
 8   Arrow Elecs., Inc. v. Justus (In re Kaypro), 218 F.3d 1070, 1073
 9   (9th Cir. 2000).
10           We review the bankruptcy court’s contract interpretation de
11   novo.    Simpson v. Burkart (In re Simpson), 366 B.R. 64, 70-71
12   (9th Cir. BAP 2007).    The bankruptcy court’s interpretation of
13   the confirmed plan is an interpretation of its own order, which
14   we review under the abuse of discretion standard.    JCB, Inc. v.
15   Union Planters Bank, N.A., 539 F.3d 862, 869 (8th Cir. 2008); and
16   see Marciano v. Fahs (In re Marciano), 459 B.R. 27, 35 (9th Cir.
17   BAP 2011) (“We owe substantial deference to the bankruptcy
18   court’s interpretation of its own orders . . . .”) (citation
19   omitted).    Likewise, we review the bankruptcy court’s decision to
20   abstain for an abuse of discretion.    Bethlahmy v. Kuhlman (In re
21   ACI-HDT Supply Co.), 205 B.R. 231, 234 (9th Cir. BAP 1997).
22                                 DISCUSSION
23
     A.      The bankruptcy court did not abuse its discretion by
24           considering the Advancement Claim in the context of
             reconsideration of the Disallowance Order and then
25           abstaining from a consideration of the merits.
26           The Reorganized Debtor argues that the bankruptcy court
27   abused its discretion by improperly considering Maddux’s newly
28   asserted claim, based on a separate legal right for advancement,

                                       14
 1   in connection with reconsideration of the Disallowance Claim.     It
 2   also argues that Maddux’s request made in the Reconsideration
 3   Motion that the bankruptcy court abstain was not properly before
 4   the bankruptcy court.   We disagree.
 5        The bankruptcy court generally has discretion in deciding
 6   whether to reconsider its prior orders.   Elias v. U.S. Trustee
 7   (In re Elias), 188 F.3d 1160, 1161 (9th Cir. 1999).     At oral
 8   argument in this appeal, the Reorganized Debtor argued that the
 9   Disallowance Motion required Maddux to clarify the grounds for
10   all possible claims, notwithstanding his concession regarding the
11   propriety of disallowance based on the then-contingent nature of
12   the claims.   The Reorganized Debtor then asserted that Maddux
13   cannot now assert the Advancement Claim as he did not
14   specifically identify the potential claim for advancement of
15   expenses in connection with his response to the Disallowance
16   Motion.   The Reorganized Debtor closed this argument with the
17   assertion that the bankruptcy court, thus, improperly vacated the
18   Disallowance Order when it did so based on an allegedly new and
19   previously unstated Advancement Claim.
20        The Disallowance Order, however, was not based on the merits
21   as to the validity of the indemnification rights or Advancement
22   Claim; Maddux conceded the contingent status of these issues and
23   the bankruptcy court disallowed the claims based only on their
24   contingent status.   It was entered without prejudice to Maddux’s
25   rights and clearly contemplated possible future reconsideration.
26   And, as discussed below, the bankruptcy court found that the
27   Advancement Claim is not a new claim introduced first in Maddux’s
28   reply papers.   Rather it is part and parcel of the

                                     15
 1   indemnification claim, triggered specifically by the Reorganized
 2   Debtor’s filing of the State Court Action, and an appropriately
 3   cited new circumstance that supported reconsideration.
 4        Having reconsidered and vacated the Disallowance Order, the
 5   bankruptcy court’s decision to consider abstention also was
 6   appropriate.    A bankruptcy court has the power to permissively
 7   abstain from hearing any matter, sua sponte.    Gober v. Terra +
 8   Corp. (In re Gober), 100 F.3d 1195, 1207 (5th Cir. 1996).       As
 9   long as the parties have an opportunity to be heard, the decision
10   to abstain is left up to the sound discretion of the bankruptcy
11   court.    Underwood v. United Student Aid Funds, Inc. (In re
12   Underwood), 299 B.R. 471, 476 (Bankr. S.D. Ohio 2003).       Here, the
13   bankruptcy court allowed the Reorganized Debtor to be heard, by
14   allowing it to file its Sur-reply, which addressed abstention,
15   and to argue at the scheduled hearing.   We find no abuse of the
16   bankruptcy court’s discretion in its decision to consider
17   abstention in connection with the Reconsideration Motion.
18   B.   The Advancement Claim was not barred.
19        1.     The Advancement Claim is a subpart of Maddux’s
                 Indemnity Agreement-based claim.
20
21        The Reorganized Debtor, in essence, argues that Maddux was
22   required to file a separate proof of claim for advancement
23   because, under Delaware state law, advancement is a right
24   separate from a right to indemnity.   The bankruptcy court
25   concluded that this argument was unavailing, and we agree.
26        The Indemnity Agreement, by its terms, is governed by
27   Delaware law.   Under Delaware law, a corporation may pay the
28   “[e]xpenses (including attorneys’ fees) incurred by an officer or

                                      16
 1   director defending any civil, criminal, administrative or
 2   investigative action, suit or proceeding . . . in advance of the
 3   final disposition of such action, suit or proceeding upon receipt
 4   of an undertaking by or on behalf of such director or officer to
 5   repay such amount if it shall ultimately be determined that he is
 6   not entitled to be indemnified by the corporation as authorized
 7   in this Section.”   Del. Gen’l Corp. Law § 145(e).   This
 8   advancement provision is permissive.   See Homestore, Inc. v.
 9   Tafeen, 888 A.2d 204, 212 (Del. 2005).
10        The Indemnity Agreement here provides the following:
11        5. Advancement of Expenses. In the event of any
          action, suit or proceeding against Indemnitee which may
12        give rise to a right of indemnification from the
          Company pursuant to this Agreement, within five days
13        following written request to the Company by the
          Indemnitee, the Company shall advance to Indemnitee
14        amounts to cover expenses incurred by Indemnitee in
          defending the action, suit or proceeding whether prior
15        to or after final disposition of such action, suit or
          proceeding (unless there has been a final determination
16        that Indemnitee is not entitled to indemnification for
          these expenses) upon receipt of (i) an undertaking by
17        or on behalf of the Indemnitee to repay the amount
          advanced in the event that it shall be ultimately
18        determined in accordance with Section 3 of this
          Agreement that such Indemnitee is not entitled to
19        indemnification by the Company, and (ii) satisfactory
          evidence and documentation as to the amount of such
20        expenses. Indemnitee’s written certification together
          with a copy of the statement paid or to be paid by
21        Indemnitee shall constitute satisfactory evidence.
          Such advances are deemed to be an obligation of the
22        Company to the Indemnitee hereunder, and shall in no
          event be deemed a personal loan.
23
24   Reconsideration Motion, Ex. A at 14.
25        The bankruptcy court determined that the Advancement Claim,
26   because it was provided for specifically in the Indemnity
27   Agreement itself, was included within Maddux’s timely filed
28   Proofs of Claim which were based, in part, on the Indemnity

                                     17
 1   Agreement.   The bankruptcy court also determined that Maddux was
 2   not required to identify the advancement provision specifically,
 3   or to mention the word advancement in particular, in order to
 4   preserve his claim for all contractual rights under the Indemnity
 5   Agreement.   We find no error in this reasoning or the bankruptcy
 6   court’s ultimate conclusion.
 7        Nor is the bankruptcy court’s conclusion inconsistent with
 8   the Reorganized Debtor’s argument that indemnification and
 9   advancement are not synonymous, but are two distinct and
10   different legal rights.   As explained by the Delaware Supreme
11   Court:
12        Advancement is an especially important corollary to
          indemnification as an inducement for attracting capable
13        individuals into corporate service. Advancement
          provides corporate officials with immediate interim
14        relief from the personal out-of-pocket financial burden
          of paying the significant on-going expenses inevitably
15        involved with investigations and legal proceedings.
16   Homestore, Inc., 888 A.2d at 211.    “[T]he advancement decision is
17   essentially simply a decision to advance credit.”   Advanced
18   Mining Sys., Inc. v. Fricke, 623 A.2d 82, 84 (Del. Ch. 1992).     As
19   advancement authority is permissive, the Delaware courts have
20   required that the terms and conditions for advancement must be
21   expressly provided by bylaw or contract.   Homestore, Inc.,
22   888 A.2d at 212; Advanced Mining Sys., Inc., 623 A.2d at 84.
23        Here, the Indemnity Agreement expressly states the terms and
24   conditions for advancement of expenses.    Nothing in the cases
25   cited by the Reorganized Debtor or that our research uncovered,
26   however, requires that advancement be provided for in a contract
27   separate from other indemnification provisions.   We conclude that
28   the bankruptcy court was correct on the law and in its factual

                                     18
 1   finding that the Advancement Claim is included in the Indemnity
 2   Agreement-based claim.
 3        2.      Maddux’s Proofs of Claim sufficiently included the
                  claim for advancement of expenses notwithstanding the
 4                lack of attachment of a copy of the Indemnity
                  Agreement.
 5
 6        The Reorganized Debtor also argues that the Proofs of Claim
 7   did not preserve the Advancement Claim where they did not attach
 8   the Indemnity Agreement or specifically disclose the advancement
 9   provision.    We disagree and find no error by the bankruptcy
10   court.
11        A failure to attach writings to a proof of claim does not
12   require a bankruptcy court to disallow a claim on that basis
13   alone.    Ashford v. Consol. Pioneer Mortg. (In re Consol. Pioneer
14   Mortg.), 178 B.R. 222, 226 (9th Cir. BAP 1995).       Objections
15   asserting lack of documentation may deprive the claim of prima
16   facie validity, but the objector has the burden to present
17   "evidence of equally probative value."      In re Falwell, 434 B.R.
18   779, 784 (Bankr. W.D. Va. 2009).       The Reorganized Debtor here
19   must demonstrate that the Advancement Claim should not be allowed
20   based on one of the grounds listed in section 502(b).      See
21   In re Lasky, 362 B.R. 385, 387 (Bankr. C.D. Cal. 2007).
22        In effect, the Reorganized Debtor here relied solely on
23   section 502(b)(9), which provides grounds for disallowance where
24   a proof of claim was not timely filed.9      It does not object to
25   the timeliness of the Proofs of Claim; instead, it argues that
26
          9
27           The Reorganized Debtor has not cited any specific plan
     provision or other order entered in the bankruptcy case as a bar
28   applicable to the Advancement Claim.

                                       19
 1   they do not sufficiently evidence a claim for advancement such
 2   that assertion of advancement rights at this time is not timely.
 3   As discussed above, the bankruptcy court properly found that the
 4   Advancement Claim was a part of the Indemnity Agreement-based
 5   claim, and therefore, also timely.
 6        As stated by the bankruptcy court, the fact that the Proofs
 7   of Claim do not refer to every paragraph contained in the
 8   Indemnity Agreement is of no import:
 9        If somebody had to refer to every paragraph of their
          agreement, then there would be no point in having a
10        one-page proof of claim form. I mean they refer to the
          agreement. He incorporates the agreement. He just
11        said if you want to get a copy of the agreement, you
          can. Everybody knew what the agreement said.
12             And to now say that because he didn’t say
          advancement in particular, I mean there are probably a
13        lot of words in that agreement that weren’t stated in
          particular on the face of the proof of claim. It
14        doesn’t mean he doesn’t get those rights anymore.
15   Hr’g Tr. (July 30, 2012) at 14:12-22.
16        Maddux identified the Indemnity Agreement and offered to
17   provide a copy.   The record reflects no request made by the
18   Reorganized Debtor for a copy.    MMPI, the Plan Proponents, and,
19   thus, the Reorganized Debtor had access to the Indemnity
20   Agreement.   In effect, the bankruptcy court found that the Proofs
21   of Claim gave sufficient notice of theories of recovery that
22   included the Advancement Claim.    In so doing, the bankruptcy
23   court did not err.
24   C.   The Bankruptcy Court did not abuse its discretion by
          abstaining.
25
26        Abstention is governed by 28 U.S.C. § 1334(c).    A bankruptcy
27   court may abstain from hearing a matter under 28 U.S.C.
28   § 1334(c)(1), which states in relevant part: "[N]othing in this

                                       20
 1   section prevents a district court in the interest of justice, or
 2   in the interest of comity with State courts or respect for State
 3   law, from abstaining from hearing a particular proceeding arising
 4   under title 11 or arising in or related to a case under
 5   title 11."
 6        The Ninth Circuit has provided guidelines for consideration
 7   by bankruptcy courts to determine if permissive abstention is
 8   appropriate.   The factors a bankruptcy court should consider in
 9   deciding permissive abstention are:    (1) the effect or lack
10   thereof on the efficient administration of the estate if a Court
11   recommends abstention, (2) the extent to which state law issues
12   predominate over bankruptcy issues, (3) the difficulty or
13   unsettled nature of the applicable law, (4) the presence of a
14   related proceeding commenced in state court or other
15   nonbankruptcy court, (5) the jurisdictional basis, if any, other
16   than 28 U.S.C. § 1334, (6) the degree of relatedness or
17   remoteness of the proceeding to the main bankruptcy case, (7) the
18   substance rather than form of an asserted "core" proceeding,
19   (8) the feasibility of severing state law claims from core
20   bankruptcy matters to allow judgments to be entered in state
21   court with enforcement left to the bankruptcy court, (9) the
22   burden of [the bankruptcy court's] docket, (10) the likelihood
23   that the commencement of the proceeding in bankruptcy court
24   involves forum shopping by one of the parties, (11) the existence
25   of a right to a jury trial, and (12) the presence in the
26   proceeding of nondebtor parties.     Christensen v. Tucson Estates
27   (In re Tucson Estates), 912 F.2d 1162, 1167 (9th Cir. 1990).
28        The Ninth Circuit also held that "[a]bstention can exist

                                     21
 1   only where there is a parallel proceeding in state court.     That
 2   is, inherent in the concept of abstention is the presence of a
 3   pendent state action in favor of which the federal court must, or
 4   may, abstain."   Sec. Farms v. Int'l Bhd. Of Teamsters, 124 F.3d
5   999, 1009 (9th Cir. 1997) (abstention not applicable to removed
 6   action).
 7        Here, the bankruptcy court expressed its reasons for
 8   exercising its discretion to abstain primarily during the initial
 9   hearing on the Reconsideration Motion, and only in passing during
10   the hearing on the Advancement Claim.    The bankruptcy court
11   stated that: “if we’re just talking about whether or not [Maddux
12   is] entitled to indemnification – it should be decided by a
13   Delaware court because it’s based on Delaware law.” Hr’g Tr.
14   (May 25, 2012) at 2:11-13.10    It further noted that:
15   “Advancement, if it is time barred, because it’s separate, that’s
16   based on a Bankruptcy Code provision and this Court should decide
17   whether it’s time barred.”     Id. at 2:14-16.   The bankruptcy court
18   stated that it seemed “kind of pointless” to require the
19   Reorganized Debtor to bring a separate objection to the
20   Advancement Claim on “time barred grounds,” and therefore
21
          10
22           As reflected in the transcript for the May 25, 2012
     hearing, after the bankruptcy court heard oral argument on this
23   matter, it held a status conference on what appears to be then-
24   pending claims objections regarding severance claims asserted by
     Maddux and others. At one point the bankruptcy court, again in
25   the context of consideration of abstention, discussed its
     sensitivity to issues regarding its post-confirmation
26   jurisdiction. It is not clear whether this discussion was
27   intended by the bankruptcy court also to indicate that it had
     considered post-confirmation jurisdiction questions applicable to
28   the litigation regarding the Indemnity Agreement here.

                                       22
 1   continued the hearing with additional briefing allowed.   Id. at
 2   14:6-7.
 3        The bankruptcy court outlined how the two issues should be
 4   addressed:
 5        So that’s my – and so my thought would be for the
          indemnification – of this particular litigation,
 6        because other litigation may be different if the
          debtors are co-liable, for this particular litigation,
 7        that this Court would abstain on the indemnification
          rights, except the Court would first decide – or maybe
 8        nothing would happen on advancement until the Court
          decided if it was time barred, this Court.
 9
10   Id. at 3:5-12.    When the bankruptcy court ruled that the state
11   court “could resolve at least whether [Maddux is] entitled to
12   indemnity” (Hr’g Tr. (May 25, 2012) 20:16-17), the Reorganized
13   Debtor did not disagree.   Id. at 20:18-19.
14        After the bankruptcy court heard oral argument on July 30,
15   2012, on the Advancement Claim, the bankruptcy court summarized
16   its ruling and stated that:   “All I’m doing is saying that those
17   contractual terms are going to govern, that they’re not time
18   barred because he didn’t put the word ‘advancement’ in his proof
19   of claim. . . .   The Court thinks every right that the debtor has
20   under that contract should be asserted.”   Hr’g Tr. (July 30,
21   2012) 18:3-5; 18:18-19.    Then, apparently referring to its
22   abstention, the bankruptcy court stated:   “But this Court isn’t
23   going to be deciding the issues about advancement any more than
24   it’s deciding issues about indemnification.”   Id. at 19:23-25.
25        We find no abuse of the bankruptcy court’s exercise of its
26   discretion to abstain on this record as indemnification and
27   advancement rights are governed by state law, the dispute
28   concerns post-confirmation litigation brought after the Effective

                                      23
 1   Date of the plan, and the Reorganized Debtor failed to articulate
 2   any effect or lack thereof on the efficient administration of the
 3   estate and cannot do so as the estate no longer exists post-
 4   confirmation.
 5         On appeal, the Reorganized Debtor argues that the bankruptcy
 6   court did not properly exercise its discretion, because by
 7   abstaining the bankruptcy court inappropriately “refused to
 8   consider, or allow argument about, other bankruptcy-related or
 9   state law reasons to disallow the claim.”   Apl’t Opening Br. at
10   19.   The Reorganized Debtor also argues that the bankruptcy court
11   is the only proper tribunal to allow or disallow a claim.    Id. at
12   20.
13         The allowance or disallowance of claims is a core proceeding
14   under 28 U.S.C. § 157(b)(2)(B).    Bankruptcy courts, however,
15   generally have concurrent jurisdiction under 28 U.S.C. § 1334(b),
16   not exclusive jurisdiction, unless there is some applicable
17   exception.   The Reorganized Debtor did not cite to any applicable
18   exception here, and we located none.   Nor has the Reorganized
19   Debtor identified any other bankruptcy issue implicated here as
20   to which the bankruptcy court has exclusive jurisdiction, and we
21   know of none.
22         In its Reply Brief on appeal, the Reorganized Debtor argues
23   that if it establishes (apparently in the State Court Action)
24   that Maddux acted inequitably, then the Reorganized Debtor should
25   be allowed to request that the bankruptcy court equitably
26   subordinate Maddux’s claims.   Apl’t Reply Brief at 13.   But
27   pursuant to the Charlestown Plan, undisputed unsecured creditors
28   were paid in full on the Effective Date.    Subordination in this

                                       24
 1   100% payout chapter 11 case is of doubtful, if any,
 2   applicability.   Moreover, the Reorganized Debtor’s generalized
 3   reference to the possibility of equitable subordination is
 4   insufficient to cause us to question the propriety of the
 5   bankruptcy court’s exercise of its discretion to abstain.
 6                               CONCLUSION
 7        For all the reasons set forth above, we AFFIRM the orders of
 8   the bankruptcy court.
 9
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