Court Opinion

ID: 1086248
Source: CourtListenerOpinion
Date Created: 2013-10-21 20:09:02.485701+00
Date Added: 2024-06-11T09:15:22.352906
License: Public Domain

FILED
                           NOT FOR PUBLICATION                             OCT 21 2013

                                                                       MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                      U.S. COURT OF APPEALS

                           FOR THE NINTH CIRCUIT

In re: JIM SLEMONS HAWAII, INC.,                 No. 11-60071

              Debtor,                            BAP No. 10-1284

JIM SLEMONS HAWAII, INC.,                        MEMORANDUM*

              Appellant,

  v.

UST - UNITED STATES TRUSTEE,
HONOLULU and CONTINENTAL
INVESTMENT COMPANY, LTD.,

              Appellees.

                         Appeal from the Ninth Circuit
                          Bankruptcy Appellate Panel
              Pappas, Dunn, and Jury, Bankruptcy Judges, Presiding

                           Submitted October 10, 2013**
                                Honolulu, Hawaii

Before: KOZINSKI, Chief Judge, and FISHER and WATFORD, Circuit Judges.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
        **
             The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).
        1. The bankruptcy court properly granted Continental’s motion to terminate

the lease. To avoid termination, debtor had to assume the lease, which it could do

only by filing a formal motion requesting court approval, stating particular

grounds, and providing Continental with adequate notice and opportunity for a

hearing. See Sea Harvest Corp. v. Riviera Land Co., 868 F.2d 1077, 1079 (9th Cir.

1989); Fed. R. Bankr. P. 9014. Debtor did not file such a motion. It did file a

motion to pay only a certain portion of rent due, but as a matter of law that motion

did not suffice to effectuate an assumption of the lease. See Sea Harvest, 868 F.2d

at 1079. The bankruptcy court did not abuse its discretion by denying debtor’s set-

aside motion. Debtor filed the motion thirty-three days after entry of judgment,

well after the fourteen-day deadline set by Federal Rule of Bankruptcy Procedure

9023.

        2. The bankruptcy court properly granted Continental’s administrative rent

motion. Even though debtor failed to assume the lease, it was required to pay rent

until the lease was formally terminated. See 11 U.S.C. § 365(d)(3); In re At Home

Corp., 392 F.3d 1064, 1068 (9th Cir. 2004). The bankruptcy court also properly

denied debtor’s offset and sublessee rent motions. Debtor failed to rebut evidence

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showing that its account had been fully credited and that Continental permissibly

collected subrents pursuant to a prior agreement between debtor and Continental.

      3. The bankruptcy court did not abuse its discretion by dismissing debtor’s

Chapter 11 case for cause under 11 U.S.C. § 1112(b). Debtor’s failure to assume

its lease with Continental resulted in a “diminution of the estate,” and without that

asset there was an “absence of a reasonable likelihood of rehabilitation.”

§ 1112(b)(4)(A).

      4. The bankruptcy court retained ancillary jurisdiction after dismissing the

bankruptcy case, which authorized the court to decide the attorney’s fees motion

and to enforce its earlier order granting administrative rent. See In re Taylor, 884

F.2d 478, 481 (9th Cir. 1989); In re Univ. Farming Indus., 873 F.2d 1334, 1335

(9th Cir. 1989).

      5. We lack jurisdiction to review the bankruptcy court’s order denying the

attorney’s fees motion because debtor’s notice of appeal was untimely. The June

29, 2010, order denying fees was a final order. See In re Yermakov, 718 F.2d

1465, 1468–69 (9th Cir. 1983). Debtor filed its notice of appeal well after the

fourteen-day jurisdictional deadline imposed by Rule 8002 had passed. See Fed.

R. Bankr. P. 8002; In re Wiersma, 483 F.3d 933, 938 (9th Cir. 2007). Even if

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debtor’s appeal was timely—which it was not—the bankruptcy court did not abuse

its discretion by denying debtor’s motion for attorney’s fees.

      6. The bankruptcy court did not abuse its discretion by rejecting debtor’s

challenge to Judge Faris’s impartiality. A “reasonable person with knowledge of

all the facts” would not conclude Judge Faris’s impartiality “might reasonably be

questioned” because there is no credible evidence of extrajudicial bias. In re Focus

Media, Inc., 378 F.3d 916, 929 (9th Cir. 2004). Debtor also failed to show that the

bankruptcy court’s rulings were the product of “deep-seated favoritism or

antagonism that [made] fair judgment impossible.” Liteky v. United States, 510

U.S. 540, 555 (1994).

      AFFIRMED in part, DISMISSED in part.

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