Court Opinion

ID: 4072610
Source: CourtListenerOpinion
Date Created: 2016-09-30 03:06:34.884513+00
Date Added: 2024-06-11T14:32:29.858157
License: Public Domain

ACCEPTED
                                                                                           04-14-00569-CV
                                                                               FOURTH COURT OF APPEALS
                                                                                    SAN ANTONIO, TEXAS
                                                                                      9/2/2015 11:38:21 PM
                                                                                            KEITH HOTTLE
                                                                                                    CLERK

                               04 -14 -00569- CV

                                                                          FILED IN
                                                                   4th COURT OF APPEALS
                         Jn 'ar:be QCourt 11 U.S. C. § 1509 A foreign Corporation needs to register to
                have Direct Access

CONCLUSION ........................................................................... 23

PRAYER ............................................................................................... 24

VERIFICATION ............................................................................ 25

CERTIFICATE OF COMPLIANCE ................................................... 25

CERTIFICATE OF SERVICE .......................................................... 25

APPENDIX ............... ........................ .......................................... 27

EXHIBITS
    I.OPINION
    2. ORDER AND MOTION OF 2013-CI-17516
    3. CROFT'S BANKRU
    PT PETITION 11-52905-CAG
    4. TRANSCRIPT MOTION TO SELL BANKRUPT CASE 14-50980-CAG
    5. EMAILRWWACHSMUTHNOTNOTICED
    6. EMAIL OF TRUSTEE THOMAS NO DISTRIBUTION
    7. ORDER DENYING MOTION TO DISQUALIFY PUERTO VERDE
       LTD. TO MAINTAIN LAWSUIOT IN TEXAS

                                                    iv

                                                    v
                                                INDEX OF AUTHORITIES

                                                           CASES

Abramowitz v. Palmer,
999 F.2d 1274, 1277 (8th Cir. 1993) ...... ... ....... ........... ... ....... ............... 5,6

Arbaugh v. Y & H Corp.,
546 U.S. 500 ...................... ........... ... ....... ........... ... ....... ............... 10

Baumgartner v. Ford Motor Credit Co., Ltd
(W.D.Mo. 7-9-2007) ....................................................................... 5

Fariasantos v. Rosenberg & Associates,
(E.D.Va. 2-27-2015) ............ ... .................. ... .......... ..... ... .......... ..... 18

Freedom Path v. Lerner,
(N.D.Tex. 2-24-2015) ............ ... ....... ........... ... .......... ..... ... .......... ..... 18

Henderson v. Shinseki,
562 U. S.428 .. ............................ ......... ..... ......... ..... ......... .............. .............. ........... 10

In the Matter of CV,
12-10542 (5th Cir. 1-7-2013) ............ ..................... ..................... ... .... 23

In re Condor Ins. Ltd.,
 601 F.3d 319, 324 (5th Cir. 2010) ....................................................... 23

In Re C-Power Prods., .Inc,
 230 B.R. 800,803 ......................................................................... 16

In re Croft
737 F 3d. 372, 376-77 (5th Cir. 2013)( per curiam) .................................. 14

In Re Dewsnup,
908 F.2d 588 (10th Cir. 1998) ................ ... ...................... ... ... ... ....... 20

IN Re Marshall,
600 F3d. 1037,1047 (9th Cir 2010) ...................................................... 12

                                                                Vl
In re Wood,
825 F.2d 90, 97 (5th Cir. 1987) ............ ... .................. ...................... 6,12

Joseph v, Hess Oil V.I. Corp.,
 651 F.3d 348, 351 (3d Cir. 2011) .................................................... 22

Latshaw v. Johnston,
167 F.3d 208 (5th Cir. 1999) ........................................................... 18

Northern Pipeline Constr. Co. v. Marathon Pipe Line Co.,
458 U.S. 50 ......................................................................... 8,10,11

Pacor, Inc. v. Higgins,
743 F.2d 984, 994 (3d Cir. 1984) ............. ........ ..................... ............. 6

Race Tires Am., Inc. v. Hoosier Racing Tire Corp ..
614 F.3d 57, 84 (3d Cir. 2010) ...................................................... 23

Scurlock Oil Co. v. Smithwick,
724 S.W.2d 1 (Tex. 1986) ............ ... ....... ........... ... ....... ........ ... ....... 17

Specialty Mills v. Citizens State Bank,
51F.3d770, 773 (8th Cir. 1995).......... ........... ... ....... ........ ... ......... 5,6,16

Stern v Marshall,
131 S.Ct 2594 (2011) ...................... ... ... ... ................................. 6,12

Stern v. Marshall,
01- 02-00114- CV (Tex,App.-Houston[l st Dist.] 7-14-2015) ..................... 12

Tex. Ass'n ofBus. v. Tex. Air Control Ed.,
 852 S.W.2d 440, 444-45 (Tex. 1993) ...... .... .. ................ .................... 22

U.S. Home Corporation v. Settlers Crossing
(D.Md. 8-14-2012) ...... ... .......... ........................ ........... ... .......... ...... 22

United States v. Brown,
509F.Supp.2d 1239, 1246 (M.D. Fla. 2007) ............................................. 19

United States v. Cox,

                                                 Vll
575F.3d352, 356 (4th Cir. 2009) ....... ........ ... ...................... ........ ... ....... 19

United States v. Reckmever:i
836 F .2d200, 208 (4th Cir. 1987) ... ... ....... ........ ... ................................ 19

USA v. Real Property, Located at 246 Main Street,
Dansville, Livingston Co., NY
(M.D.Fla. 7-13-2015) .................................................................... 19

                                              STATUTES

Article III of the Constitution of the United States ..................... .4,10.11,12,17

Bankruptcy Act of 1978 ....... ........ ..................... ..................... ......... 11

Fourteenth Amendment to the Constitution of the United States ..................... 17

11 U.S.C. § 363 .... ... ... ... ................................ .... ... .. ................... 19

l lU.S.C. § 544 ......... .... ... ... .. ............................... ... ............... 17, 20

11 U. S.C. § 1509 .................................................................... 17, 21

21 U.S.C. § 853 ........................... .... ... ... .................................. 9, 17

28 U.S.C. § 157 ... ... .......... ........ ..................... ... ........ 5,6,7,8,9,10,11, 14
                                                RULES

Federal Rule of Evidence 701. ........................................................... 18

Tx. R. APP. P. 8.2 .... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ... ..................... 15

                                                    vm
To The Honorable Fourth Court of Appeals:

      Burton Kahn (Kahn") ("Appellant") files this Motion For Rehearing and

Reinstatement in accordance with Tex.R.App.P. 49. land in support would show the

Court as follows:

                                      I·
                                       '
                                INTRODUCTION

      Appellant, Kahn seeks the panel to review of the opinion in this case issued

on August 19, 2015. The panel that rendered judgment in this case consisted of

Marialyn Barnard, Justice, Patricia 0. Alvarez, Justice and Jason Pulliam, Justice.

The opinion was authored by the Honorable Marialyn Barnard , Justice. A copy

of the opinion is attached as Exhibit 1.

                        RESPONSE TO BACKGROUND

       1. Kahn was the president, secretary, and sole director ofHelvetia from

October 2009 until he was terminated in August 2013.

      Kahn was never terminated because he never worked for Robert Ripley

nor did he have any contract with Robert Ripley. Kahn was the one third owner

of the Corporation named Joabert Development Company. (5RR 343-345)

      2. Upon discovering what Kahn was doing, Helvetiafi"led suit to set aside

the deeds. The trial court ordered the deeds set aside and thereafter, on

November 4, 2013,

      Puerto Verde Ltd. in the name of Helvetia filed suit.

                                           1
      3. The trial court granted the ex parte order based on documents filed by

Kahn, who claimed to be acting as president and authorized representative of

Helvetia.

      Kahn was the president and or visit authorized representative of Helvetia as

per the Secretary of State. (Except for period September 27, 2013 to October 4,

2013) (5RR131-136, 213) The ex parte order .(5RR 160-161) is a ministerial act

and does not make any findings as to any underlying claims of the parties.

      4. Kahn failed to disclose, however, that in the prior litigation filed by

Helvetia in October 2013, another trial court had declared as fraudulent the deeds

Kahn transferred to Paradiv, determining Kahn had no authority to act on behalf

ofHelvetia.

      There is no evidence that Kahn' s attorney Jay Petterson what conversations

had with Judge Gabriel and the finding was purely a ministerial act and it would

not of have made any difference.

      The court does not declare as fraudulent the deeds. Order of 2013-CI- l 7 516

Exhibit 2 ((Appellate case 04-14-00357CV) (5RR 128-139) states: that the deeds

are not created by implied or express consent or agreement of the obligor debtor or

owner of the real property or by implied or express consent or agreement of an

agent to insure rather represented of that person it does state that the Court does not

grant parity any interest in the property. The Court states that it makes no finding

                                          2
as to any underlying claims of the parties involved and expressly limits its finding

of fact and law of a ministerial act.

      Kahn formed Paradiv to prevent Robert Ripley a non-owner of Joabert to

prevent a takeover of Robert Ripley. The funds that Paradiv would receive would

go to Helvetia.

      5. After an evidentiary hearing in December 2013, the trial court overturned

its prior order, finding Kahn made false claims in order to secure the prior order.

      The hearing of December 9 through 11 was a temporary injunction hearing

not evidentiary hearing. The Supplement Temporary Injunction Order (5RR322-

330) on page 333 only that it is probable that Kahn the made false claims not

finding.

       6. After another evidentiary hearing, the trial court imposed sanctions

against Kahn. The trial court found, among other things, that Kahn did not own

Helvetia or its stock.

      There was no evidentiary hearing it was a sanction hearing. The Court stated

that she would not hear any evidence in regarding ownership The Final Judgment

And Sanction Order ("Sanction Order") (5RR255-284) never states specifically

that Kahn did not own the shares of Helvetia only applies dicta.

       7. Rather, the trial court determined the sole owner ofHelvetia is Puerto

Verde, Ltd. (''Puerto Verde''), which is owned by Robert Ripley.

                                          3
      The sanction order never specifically states that the sole owner of Helvetia is

Puerto Verde. The finding implies that the self serving handwritten note on an e-

mail address to Kahn was the document proving ownership. The Sanction Order

neglects to say that the document does not mention Helvetia only Holdco and that

the document was not presented at the ex parte motion of case 2003-CI-17516

(5RR 347-371) as proof of ownership and the document was not known to Robert

Ripley and the Bank Trust Officer as late as 2008.(SRR 18)

      8. Kahn raises numerous issues challenging the trial court's judgment.

In response, Helvetia contends, among other things, that this court must

dismiss Kahn's appeal because we lack jurisdiction.

      The issue that a foreign Corporation not registered to the Secretary of

State cannot maintain a lawsuit in Texas is paramount prior to the bankruptcy

standings and should be addressed by either denying the issue or finding for

Kahn not the foreigner Puerto Verde Ltd. (Bahamian).

                     ARGUMENTS AND AUTHORITIES

                                     ISSUE 1

The Appellate Court errored when the Court declared that the trustee has exclusive
standing to assert legal claims belonging to the 2013-CI-18355 case ("Defamation
Trial Case") because it was a non-core proceeding, not in the Bankruptcy Court' s
jurisdiction to make a judgment and not was not in accordance with the
Constitution of the United States.

                                         4
      On April 4, 2014, while case 2013-CI-18355 suit was pending, but prior

to trial, Kahn filed a voluntary petition for bankruptcy, which immediately

stayed the Defamation Trial Court proceedings. The Bankruptcy Court

conducted a hearing on the lifting the automatic stay for the Defamation Trial

Case on April 28, 2014 and granted the stay. The lifting of the stay

relinquished the Bankruptcy's jurisdiction for the Defamation Trial Case.

Thereafter, the case proceeded to jury trial. The cause of action was not listed

on the bankruptcy schedules because it was purely defensive and that the

Sanction Order purported that the shares were not Kahn's. The petition wass

never reopened to include the Defamation Trial Case verdict. The Defamation

Trial Case is non-core because it was only some what related to PVL's-Helvetia

claim, and the resolution of the Trial case would have no bearing on the

bankruptcy. In Baumgartner v. Ford Motor Credit Co., Lld (W.D.Mo. 7-9-2007)

stated "the district courts shall have original but not exclusive jurisdiction of all

civil proceedings arising under title 11, or arising in or related to cases under title

11." 28 U.S.C. § 1334(b). Thus, "[c]ivil proceedings in a bankruptcy case are

divided into two categories, core proceedings and non-core, related proceedings."

Specialty Mills v. Citizens State Bank, 51 F.3d 770, 773 (8th Cir. 1995);

Abramowitz v. Palmer, 999 F.2d 1274, 1277 (8th Cir. 1993). A non-exhaustive list

of "core proceedings" is enumerated at 28 U.S.C. § 157(b)(2). In general, "core

                                            5
proceedings" are "those which arise only in bankruptcy or involve a right created

by federal bankruptcy law." Specialty Mills, 51 F.3d at 773 (citing In re Wood, 825

F.2d 90, 97 (5th Cir. 1987); see also 28 U.S.C. § 157(b)(2). By contrast, "[n]on-

core, related proceedings are those which do not invoke a substantive right created

by federal bankruptcy law and could exist outside of a bankruptcy, although they

may be related to a bankruptcy." Specialty Mills, 51 F.3d at 773-74. In determining

whether a case falls into the latter category, the Eighth Circuit has adopted the

"conceivable effect" test developed by the Third Circuit in Pacor, Inc. v. Higgins,

743 F.2d 984, 994 (3d Cir. 1984): The test for determining whether a civil

proceeding is related to bankruptcy is whether the outcome of that proceeding

could conceivably have any effect on the estate being administered in the

bankruptcy.... An action is related to bankruptcy if the outcome could alter the

debtor's rights, liabilities, options, or freedom of action ... and which in any way

impacts upon the handling and administration of the bankrupt estate. Specialty

Mills, 51 F.3d at 74 (quotingPacor, 743 F.2d at 994); see also Abramowitz, 999

F.2d at 1278 (interpretation of "related to" jurisdiction should promote judicial

economy by facilitating resolution of all matters related to a bankruptcy case).

                                          I.

       The Supreme Court Case of Stern v Marshall, 131 S.Ct 2594 (2011) 1s

on point with the present Appeal.

                                          6
      Vickie filed suit against Pierce prior to her filing bankruptcy ... .

        Pierce filed a proof of claim in that proceeding, asserting that he should be

able to recover damages from Vickie's bankruptcy estate because Vickie had

defamed him .

        The Bankruptcy Court granted Vickie summary judgment on the

defamation claim and eventually awarded her hundreds of millions of dollars in

damages on her counterclaim. Pierce objected that the Bankruptcy Court lacked

jurisdiction to enter a final judgment on that counterclaim because it was not a

"core proceeding" as defined by 28 U.S.C. § 157(b)(2)(C). As set forth in§ 157(a).

Congress has divided bankruptcy proceedings into three categories: those that

"aris[e] under title 11 ";those that "aris[e] in" a Title 11 case; and those that are

"related to a case under title 11." District courts may refer all such proceedings to

the bankruptcy judges of their district, and bankruptcy courts may enter final

judgments in "all core proceedings "arising under" title 11, or "arising in" a case

under title 11." §§ 157(a), (b)(l). In non-core proceedings, by contrast, a

bankruptcy judge may only "submit proposed findings of fact and conclusions of

law to the district court." § 157(c)(1 ). Section l 57(b)(2) lists 16 categories of core

proceedings, including "counterclaims by the estate against persons filing claims

against the estate." § l 57(b)(2)(C).

                                            7
        The Bankruptcy Court lacked jurisdiction to enter a final judgment on that

counterclaim because it was not a "core proceeding" as defined by 28 U.S.C. §

157(b)(2)(C). As set forth in§ 157(a), Congress has divided bankruptcy

proceedings into three categories: those that "aris[e] under title 11 ";those that

"aris[e] in" a Title 11 case; and those that are "related to a case under title 11."

District courts may refer all such proceedings to the bankruptcy judges of their

district, and bankruptcy courts may enter final judgments in "all core proceedings

arising under title 11, or arising in a case under title 11." §§ 157(a), (b)(l). In non-

core proceedings, by contrast, a bankruptcy judge may only "submit proposed

findings of fact and conclusions of law to the district court." § 157(c )(1 ). Section

l 57(b)(2) lists 16 categories of core proceedings, including "counterclaims by the

estate against persons filing claims against the estate. " § 15 7 (b )( 2)(C).

         The Bankruptcy Court concluded that Vickie's counterclaim was a core

proceeding. The District Court reversed, reading this Court's precedent in Northern

Pipeline Constr. Co. v. Marathon Pipe Line Co., 458 U.S. 50, to "suggest[] that it

would be unconstitutional to hold that any and all counterclaims are core." The

court held that Vickie's counterclaim was not core because it was only somewhat

related to Pierce's claim, and it accordingly treated the Bankruptcy Court's

judgment as proposed, not final. Although the Texas state court had by that time

conducted a jury trial on the merits of the parties' dispute and entered a judgment in

                                              8
Pierce's favor, the District Court went on to decide the matter itself, in Vickie's

favor. The Court of Appeals ultimately reversed. It held that the Bankruptcy Court

lacked authority to enter final judgment on Vickie's counterclaim because the claim

was not "so closely related to [Pierce's] proof of claim that the resolution of the

counterclaim is necessary to resolve the allowance or disallowance of the claim

itself." Because that holding made the Texas probate court's judgment the earliest

final judgment on matters relevant to the case, the Court of Appeals held thatthe

District Court should have given the state judgment preclusive effect.

Held: Although the Bankruptcy Court had the statutory authority to enter judgment

on Vickie's counterclaim, it lacked the constitutional authority to do so. Pp. 6-38.

1. Section 157(b) authorized the Bankruptcy Court to enter final judgment on

Vickie's counterclaim. Pp. 8-16.

 (a) The Bankruptcy Court had the statutory authority to enter final judgment on

Vickie's counterclaim as a core proceeding under§ 157(b)(2)(C). Pierce argues

that § l 57(b) authorizes bankruptcy courts to enter final judgments only in those

proceedings that are both core and either arise in a Title 11 case or arise under Title

11 itself. But that reading necessarily assumes that there is a category of core

                                           9
proceedings that do not arise in a bankruptcy case or under bankruptcy law, and the

structure of§ 157 makes clear that no such category exists. Pp. 8-11.

 (b) In the alternative, Pierce argues that the Bankruptcy Court lacked jurisdiction

to resolve Vickie's counterclaim because his defamation claim is a "personal injury

tort" that the Bankruptcy Court lacked jurisdiction to hear under § 157 (b )(5). The

Court agrees with Vickie that§ l 57(b)(5) is not jurisdictional, and Pierce

consented to the Bankruptcy Court's resolution of the defamation claim. The Court

is not inclined to interpret statutes as creating a jurisdictional bar when they are not

framed as such. See generally Henderson v. Shinseki, 562 U. S.     -~

Arbaugh v. Y & H Corp., 546 U.S. 500. Section 157(b)(5) does not have the

hallmarks of a jurisdictional decree, and the statutory context belies Pierce's claim

that it is jurisdictional. Pierce consented to the Bankruptcy Court's resolution of the

defamation claim by repeatedly advising that court that he was happy to litigate his

claim there. Pp. 12-16.

 2. Although § 157 allowed the Bankruptcy Court to enter final judgment on

Vickie's counterclaim, Article III of the Constitution did not. Pp. 16-38.

 (a)    Article III is "an inseparable element of the constitutional system of checks

and balances" that "both defines the power and protects the independence of the

                                           10
Judicial Branch." Northern Pipeline, 458 U.S., at 58 (plurality opinion). Article III

protects liberty not only through its role in implementing the separation of powers,

but also by specifying the defining characteristics of Article III judges to protect

the integrity of judicial decision making ..

        This is not the first time the Court has faced an Article III challenge to a

bankruptcy court's resolution of a debtor's suit. In Northern Pipeline, the Court

considered whether bankruptcy judges serving under the Bankruptcy Act of 1978

- who also lacked the tenure and salary guarantees of Article III -       could

"constitutionally be vested with jurisdiction to decide [a] state-law contract claim"

against an entity that was not otherwise part of the bankruptcy proceedings. Id. , at

53, 87, n. 40 (plurality opinion). The plurality in Northern Pipeline recognized that

there was a category of cases involving "public rights" that Congress could

constitutionally assign to "legislative" courts for resolution. A full majority of the

Court, while not agreeing on the scope of that exception, concluded that the

doctrine did not encompass adjudication of the state law claim at issue in that case,

and rejected the debtor's argument that the Bankruptcy Court's exercise of

jurisdiction was constitutional because the bankruptcy judge was acting merely as

an adjunct of the district court or court of appeals. Id., at 69-72; see id., at 90-91

(Rehnquist, J., concurring in judgment). After the decision in Northern Pipeline,

Congress revised the statutes governing bankruptcy jurisdiction and bankruptcy

                                            11
judges. With respect to the "core" proceedings listed in§ 157(b)(2), however, the

bankruptcy courts under the Bankruptcy Amendments and Federal Judgeship Act

of 1984 exercise the same powers they wielded under the 1978 Act. The authority

exercised by the newly constituted courts over a counterclaim such as Vickie's

exceeds the bounds of Article III. Pp. 16-22. Stern P. 1-4.

       The Appellate Court in IN Re Marshall, 600 F3d. 1037,1047 (9th Cir 2010)

concluded that Vickie Lynn Marshall's counterclaim was a non-core proceeding

because it was some what related and the Court found for Peirce. The Supreme

Court in Stern affirmed the opinion of the 9th Cir. A recent Texas Case Stern v.

Marshall, 01- 02-00114- CV (Tex,App.-Houston[l st Dist.] 7-14-2015) also

affirmed that Vickie' s counterclaim was anon-core proceeding. The Houston

Court visited the core and non-core proceedings and found the same results.

                                         II.

      In this appeal the Defamation Trial claim: is not   arising~   nor arising under

nor related to as described by In Re Wood, 825 F.2d 90,97 (5th Cir. 1987),

"[28] As defined above, the phrases "arising under" and "arising in" are helpful

indicators of the meaning of core proceedings. If the proceeding involves a right

created by the federal bankruptcy law, it is a core proceeding~ for example, an

action by the trustee to avoid a preference. If the proceeding is one that would arise

only in bankruptcy, it is also a core proceeding~ for example, the filing of a proof

                                          12
of claim or an objection to the discharge of a particular debt. If the proceeding does

not invoke a substantive right created by the federal bankruptcy law and is one that

could exist outside of bankruptcy it is not a core proceeding~ it may be related to

the bankruptcy because of its potential effect, but under section 157(c)(l) it is an

"otherwise related" or non-core proceeding. [29] Finally, the interpretation of core

proceeding based on its equation with "arising under" and "arising in" proceedings

comports with the interpretation suggested by Marathon. Justice Brennan's

description of "core" matters parallels that of matters "arising under" title 11 -

matters invoking a substantive right created by federal bankruptcy law. Moreover,

his comment that the matter could have proceeded absent the bankruptcy suggests

a contrast with "arising in" proceedings -        matters that could arise only in

bankruptcy. [30] We hold, therefore, that a proceeding is core under section 157 if

it invokes a substantive right provided by title 11 or if it is a proceeding that, by its

nature, could arise only in the context of a bankruptcy case. The proceeding before

us does not meet this test and, accordingly, is a non-core proceeding. The plaintiffs

suit is not based on any right created by the federal bankruptcy law. It is based on

state created rights.[fn34] Moreover, this suit is not a proceeding that could arise

only in the context of a bankruptcy. It is simply a state contract action that, had

there been no bankruptcy, could have proceeded in state court."

                                             13
        The Defamation trial case is simply a state contract action had there been

no bankruptcy has proceeded in state court and therefore is a non-core proceeding

and when the stay was lifted the Bankruptcy Court's jurisdiction to sell the non-

core case's appeal rights was relinquished.

      The bankruptcy Court issued "Order Authorizing Sale of All Non-Exempt

Assets, Claims and Causes of Actions" which is a Final Order on a non-core

proceeding without submitting proposed findings of fact and conclusions of law to

the district court." 28 § 157 (c )(1). A bankruptcy judge may hear a proceeding that

is not a core proceeding but that is otherwise related to a case under title 11. In

such proceeding, the bankruptcy judge shall submit proposed findings of fact and

conclusions of law to the district court, and any final order or judgment shall be

entered by the district judge after considering the bankruptcy judge's proposed

findings and conclusions and after reviewing de novo those matters to which any

party has timely and specifically objected. The Bankruptcy Court did not submit

proposed findings of fact and conclusions of law to the district court, which is

contrary to Article III of the Constitution of the United States , Stern v. Marshall,

supra, and such sale should be null and voided. Thus the Trustee does not have

any authority to appear in the Appeal.

                                       ISSUE 2

                                           14
The Appellate Court errored when the court it is relied on In re Croft 737 F 3d.
372, 376-77 (5th Cir. 2013)( per curiam) because all the circumstances of this case
were not the same (core, non-core) and the appeal at no benefit a to the estate.

      In re Croft 73 7 F 3d. 372, 37 6-77 (5th Cir. 2013 )( per curiam) Bradley

Croft was involved in two lawsuits that ultimately resulted in sanctions

against him and an award of attorney's fees in favor of his opponent. Id. at

374. Croft appealed those decisions to the Fourth Court of Appeals.

Thereafter, Croft filed a voluntary bankruptcy petition. As required, the

Appellate Court abated Croft's appeals because of the automatic bankruptcy

stay. Id.; see Tx. R. APP. P. 8.2 (stating bankruptcy suspends appeal). In

response, Croft filed a motion in the bankruptcy court seeking to lift the

automatic stay and allow the appeals to continue. Id. Croft's motion was

opposed under the theory that Croft's right to appeal was part of the

bankruptcy estate and only the trustee could prosecute the appeals. Id

       Croft appeal was filed on August 5, 2011, before Croft filed

bankruptcy on August 24, 2011 listing the creditors of the Sanction Orders.

Exhibit 3 (Original Schedules of Croft from Bankruptcy case l l-52905cag)

By listing the creditors of the sanction order Croft made the suits a core

proceedings. Kahn agrees with the District Court and the Fifth Circuit that a

successful Appeal would have reduced Crofts debt. This would modify a

Crofts debt and would be a core proceeding under the Related definition of

                                        -6 -
                                         15
core proceedings. The test for determining whether a civil proceeding is related

to bankruptcy is whether the outcome of that proceeding could conceivably have

any effect on the estate being administered in the bankruptcy. . . .An action is

related to bankruptcy if the outcome could alter the debtor's rights, liabilities,

options, or freedom of action ... and which in any way impacts upon the handling

and administration of the bankrupt estate. Specialty Mills, 51 F.3d at 74

     Kahn's debt from the Defamation trial case was adjudged after the

bankruptcy petition was filed. As briefed in Issue 1 the case is a non-core

proceeding and not in the jurisdiction of the bankruptcy court to sell its appeal

rights. A successful appeal of the Defamation trial case will not effect the debtor's

rights, liabilities, options, or freedom of action ... and which in any way impacts

upon the handling and administration of the bankrupt estate.

        The marked difference between Kahn and Croft is that Kahn is non-core

and Croft is Core. Kahn agrees with the Court that the case of In Re C-Power

Prods., .Inc, 230 B.R. 800,803 the malpractice claim was directly related to the

bankruptcy and is a core proceeding.

                                       ISSUE 3

The bankruptcy order entitled "Order Authorizing Sale of All Non-Exempt
Assets, Claims and Causes of Actions" should be declared null and void thus the
Trustee does not have standing in this Appeal.

                                          16
      The "Order Authorizing Sale of All Non-Exempt Assets, Claims and

Causes of Actions' ("Sales Order") should be declared null and void for the

following reasons:

                                          I.

                             Order of Sale On Appeal

       The motion for sale to sell is currently on appeal in the United States

District Court for the Western District of Texas case number SA-14-CA- 1109.

There are several issues of Law to be reviewed de nova: (A)Article III of the

Constitution of the United States;(B) Fourteenth Amendment to the Constitution of

the United States;.(C)l l U.S.C. § 1509 A foreign Corporation needs to register to

have Direct Access;(D) Sale procedures and bona fide purchaser 21 U.S.C. § 853

(n)(6)(B); ;(E).11 U.S.C. § 544 abandonment, Based on the In Scurlock Oil Co.

v. Smithwick, 724 S.W.2d 1 (Tex. 1986) "ta judgment is final for the purposes of

issue and claim preclusion "despite the taking of an appeal unless what is called an

appeal actually consists of a trial de novo." The Sales Order is not a final as per

Scurlock Oil Co and collateral estoppel of the Sales Order is not applicable at this

time. thus the Trustee does not have standing in this Appeal

                                         II..

        Fourteenth Amendment to the Constitution of the United States

                                          17
        The Bankruptcy Court did not allow Kahn to testify as to the value of the

Joabert property Exhibit 4 (Transcript of Motion to Sell Hearing on October 15,

2014 in Bankruptcy Case 14-50980-cag) P.92 (A violation of Kahn's Fourteenth

Amendment rights) and Court declared value to be zero. Kahn is an 1/3 owner and

a Professional Engineer, licensed in the State of Texas, who designed the project

and was the President of the contractor. Kahn has knowledge of the property and is

an expert witness. Fariasantos v. Rosenberg & Associates, (E.D.Va. 2-27-2015)

based on Federal Rule of Evidence 701, stated, "most courts have permitted the

owner or officer of a business to testify to the value ... of the business, without the

necessity of qualifying the witness ... by virtue of his or her position in the

business." In Kahn's case 2013-CI-17012 ("Joabert Case") First Amended

Original Petition Request For Appointment Of Commissioners, Alternative

Request For Appointment Of Receiver," a sworn petition has included on page 13

an detail analysis of each section of the property and an estimate of the cost to

complete. The Bankruptcy Court would not allow Kahn to testify. Kahn' s

testimony would have been enough detail to show the worth of the Joabert

property and as such that Kahn's value would exceed his debts and the sale would

not have been approved. Appellee did not file an answer to the amended petition

which is uncontroverted. In Freedom Path v. Lerner, (N.D.Tex. 2-24-2015) "a

court . . . . must accept as true the uncontroverted allegations in the complaint and

                                           18
resolve in favor of the plaintiff any factual conflicts posed by the affidavits.

Latshaw v. Johnston, 167 F.3d 208 (5th Cir. 1999). If Kahn had testified and

showed the value of Joabert exceeded the would have exceeded the debt, the Sales

Order would not have been approved. Thus the Trustee does not have standing in

this Appeal.

                                            III

     Sale Procedures And Bona Fide Purchaser 21 U.S.C. § 853 (n)(6)(B);

        11 U.S.C. § 363 requires notice prior to sale. Robert Wachsmuth a

creditor did not get notice of the sale or hearing date. Exhibit 5(Email) This

violation makes the sale null and void.

       11 U.S.C. § 363 (m) (n) requires the sale to be a good faith. The sale was

to one of the creditors Helvetia who claimed 97% of the debt. Therefore with

the price of $10,000 Helvetia would get distributed back $9700, or only cost

$300. In USA v. Real Property, Located at 246 Main Street, Dansville, Livingston

Co., NY(M.D.Fla. 7-13-2015) states:

               "Although we have not previously addressed this question,
               we agree with the majority view that unsecured or general
               creditors cannot be considered bona fide purchasers for
               value within the meaning of§ 853(n)(6)(B). ")~United
               States v. Reckmever, 836F.2d200, 208 (4th Cir. 1987)
               (stating that the term includes "all persons who give value
               ... in an arms-length transaction with the expectation case
               "was paid for the rendition that they would receive
               equivalent value in return."). While "a person who
               receives property subject to forfeiture as a 'gift' cannot be

                                            19
             a bona fide purchaser for value," United States v. Brown,
             509F.Supp.2d 1239, 1246 (M.D. Fla. 2007), the term
             "bona fide purchaser for value must be construed liberally
             to include all persons who give value ... in an arms-
             length transaction with the expectation that they would
             receive equivalent value in return." United States v. Cox,
             575F.3d352, 356 (4th Cir. 2009)

      The sale was not to a bona fide purchaser and was not an arms length

transaction and not in good faith.

                              NO CONSIDERATION

        The Motion to Sell was granted but the Trustee did not distribute the

funds. Exhibit 6.(E mail) The sale is not complete until the funds are distributed.

This violation makes the sale null and void until funds are distributed. Thus at

present time, the Trustee does not have standing in this Appeal until he distributes

the funds.

                        llU.S.C. § 554 ABANDONMENT

      The hearing on the Motion to Sell was on October 15,2014. Transcripyt of

that hearing is Exhibit 4. The Court on pages 43, 45 and 93 stated that the value

of 2013-CI-18355 and its Appeal Case 05-14-00568-CV are worth zero. The

Trustee stated on page l 7and 21 that the litigation of these claims is totally

unreasonable.

      11 U.S.C. § 554 states: the trustee may abandon any property of the

estate that is burdensome to the estate that is in consequential value and

                                           20
benefit to the estate. By the Trustee and the Court finding no value the of the

causes they are abandon and reverts to the debtor and stands as if no

bankruptcy petition was filed. In Re Dewsnup, 908 F.2d 588 (1 oth Cir. 1998)

Therefore Kahn owns the cause of action and the Trustees has no standing in

the appeal.

                                      ISSUE 4

        llU.S.C. § 1509 A foreign Corporation needs to register to have

                                    Direct Access

      Registration for a foreign Corporation is a very important issue. A Foreign

Corporation can camouflage their operations and can avoid taxes and enable illegal

activities such as money laundering and terrorist activities.

      Helvetia Asset Recovery, Inc. ("Helvetia"), creditor and party-in-interest, is

a misnomer. Helvetia is a Texas Corporation. Burton Kahn ("Kahn") is president

of that corporation per Secretary of State. (Except for period September 27, 2013

to October 4, 2013) (5RR131-136, 213). Record in Case 2013-CI-18394 and

Appeal 4-14-00357-CV (5RR365). This Appeal of Case 2013-CI-18355 was to

determine who owns the shares of Helvetia. The real party in interest is Puerto

Verde, Ltd a Bahamian Corporation ("PVL") Robert Ripley testified that he is

President of PVL and claims that PVL owns the shares of Helvetia. The

ownership of Helvetia' s stock was decided without litigation or jurisdiction in

                                          21
the Final Judgment and Sanction Order dated April 1, 2014. 11 U.S. C. § 1509

requires that a foreign corporation have a Right Direct access .. A Motion to

Disqualify Puerto Verde Ltd. To Have Direct Access to this Court. (a) A foreign

representative may commence a case under section 1504 by filing directly with

the court a petition for recognition of a foreign proceeding under section 1515.

However no such request has been made. PVL does not have standing in this

court and standing is a component of subject matter jurisdiction. Tex. Ass'n

ofBus. v. Tex. Air Control Ed., 852 S.W.2d 440, 444-45 (Tex. 1993). Because

subject matter jurisdiction is essential to the authority of a court to decide a

case, it will cannot be waived and may be raised for the first time on appeal.

Thus all judgments in thus case and in other related cases are void and there is

no debt to Helvetia /PVL. The bankruptcy court's order in Denying the Motion to

Disqualify Puerto Verde Ltd. To Maintain A Lawsuit was based sole on good

cause and this Court should not allowed the Order as collateral estoppel (ECF No.

45) (Bankruptcy Court Case 14-50980-cag) Exhibit 7 states for the reason of

denial, good cause without having any evidence or reasons to dispute these

motions. This is not allowed per In U.S. Home Corporation v. Settlers Crossing

(D.Md. 8-14-2012) .. "Good cause' is understood to mean '[a] legally sufficient

reason,' and it reflects 'the burden placed on a litigant to show why a request

should be granted or an action excused." Joseph v, Hess Oil V.I. Corp., 651 F.3d

                                         22
348, 351 (3d Cir. 2011) (quoting Blacks Law Dictionary 251 (9th ed. 2009)). The

"good cause" inquiry "focuses on the moving party's burden to show due

diligence." Race Tires Am., Inc. v. Hoosier Racing Tire Corp .. 614 F.3d 57, 84

(3d Cir. 2010).

      In In the Matter ofCV, 12-10542 (5th Cir. 1-7-2013) states:

             "Chapter 15 provides for a broad range of relief. This
             includes the ability to sue and be sued in United States
             courts, to apply directly to a United States court for
             relief, to commence a non-Chapter 15 case, and to
             intervene in any United States case to which the debtor is
             a party. In re Condor Ins. Ltd., 601 F.3d 319, 324 (5th
             Cir. 2010)"

      The process in the federal system chapter 15 requires a Court order and

hearing for a foreign Corporation needs to register to have Direct Access and that

the corporation shall met specific requirements. Texas only requests filing a

registration form and a fee. However PVL has done neither and that PVL should

not be able to sue or be sued. Thus the Sales Order is null and void and the

Trustee does not have standing in this Appeal.

                                  CONCLUSION

             The Appellant has shown that this motion that the "Order

Authorizing Sale of All Non-Exempt Assets, Claims and Causes of Actions'

should be declared null and void for the following reasons: the order was in

violation of Article III of the Constitution of the United States; the 14th

                                          23
amendment to the Constitution of the United States; the order his untimely because

of appeal which will be reviewed as de novo; sales procedures such as notice and

consideration and a bona fide purchaser and the abandonment of the cause of

action making the cause of action revert back to Kahn.

      The trustee does not have standing in this appeal.

                                    PRAYER

      Appellant, Burton Kahn is an American Citizen, born in Brooklyn, New

York in 1933 from parents that were both born in Brooklyn, New York in 1904

and served his country in the United States Army for two deployments, moved to

Texas in 1977 and desires justice and his rights as an U.S. Citizen, which has

been deprived in favor of Appellee, who is a Canadian citizen living in

Columbia South America, banks in the Bahamas with secret accounts and does

not pay United States Taxes. For the reasons above Appellant prays that this

Appellate Court find that this Motion for Rehearing is Granted and that this

Honorable Court find that the Appellant is entitled to a new Trial.

                               Respectfully Submitted

                                Burton Kahn Pro-se
                                1706 Alpine Cir.,
                                San Antonio, TX 8248
                                glentrailyahoo.com

                                         24
                                 Tel (210) 408-9199

                                 VERIFICATION

State of Texas            §
County of Bexar           §      Tex. Civ. Prac. & Rem. Code § 132.001

       My name is Burton Kahn. I am over the age of 18 and am fully competent
to make this unsworn declaration. My date of birth is in August 1933 and my
address is 1706 Alpine Circle, San Antonio, Texas 78248. I declare under penalty
of perjury that the foregoing is true and correct and the Exhibits presented are the
true and correct copies of the record. Executed in Bexar County, State of Texas
on the day of September 2, 2015.

                                        Burton Kahn

         CERTIFICATE OF COMPLIANCE WITH RULE 9.4(e), (i)

This motion complies with the type-volume limitation of Texas Rule of Appellate
Procedure 9.4(1) because, according to the Microsoft Word 2010 word count
function, it contains 5,848 words on pages 1-26, excluding the parts of the brief
exempted by Texas Rule of Appellate Procedure 9.4(e)(l)(l).

This notion complies with the typeface requirements of Texas Rule of Appellate
Procedure 9 .4(e) because it has been prepared in a proportionally spaced typeface
using Microsoft Word 2010 software in Times New Roman 14 point font in text.

                                        Burton Kahn

                         CERTIFICATE OF SERVICE

     I certify that a copy of this Motion was served on Appellee Helvetia Asset
Recovery Inc. through counsel of record on September 2, 2015 by

                                        4'.ZD
                                    Burton Kahn

Via Email
Elizabeth Conry Davidson, Attorney at Law
926 Chulie Drive
San Antonio, Texas 78216
(210) 380-4899 telephone
(210) 225-2300 facsimile
conrydavidson@gmail.com

                                     26
                                APPENDIX

EXHIBITS

     1.0PINION

     2. ORDER AND MOTION OF 2013-Cl-17516

     3. CROFT'S BANKRU

     PT PETITION 11-52905-CAG

     4. TRANSCRIPT MOTION TO SELL BANKRUPT CASE 14-50980-CAG

     5. EMAIL RW WACHSMUTH NOT NOTICED

     6. EMAIL OF TRUSTEE THOMAS NO DISTRIBUTION

     7. ORDER DENYING MOTION TO DISQUALIFY PUERTO VERDE

       LTD. TO MAINTAIN LAWSUIOT IN TEXAS
EXHIBIT 1
                               jfourtb QCourt of ~ppra:l.%
                                      $an       ~ntonio,   W:exa%
                                                OPINION

                                         No. 04-14-00569-CV

                                              Burton KAHN,
                                                Appellant

                                                    V.

                             HELVETIA ASSET RECOVERY, INC.,
                                        Appellee

                     From the 37th Judicial District Court, Bexar County, Texas
                                  Trial Court No. 2013-CI-18355
                           Honorable Michael E. Mery, Judge Presiding

Opinion by:       Marialyn Barnard, Justice

Sitting:         Marialyn Barnard, Justice
                 Patricia 0. Alvarez, Justice
                 Jason Pulliam, Justice

Delivered and Filed: August 19, 2015

DISMISSED FOR WANT OF JURISDICTION

           A jury found appellant Burton Kahn ("Kahn") breached his fiduciary duty to appellee

Helvetia Asset Recovery, Inc. ("Helvetia"), used another company to perpetrate a fraud for his

benefit, retained money belonging to Helvetia, slandered Helvetia's title to certain real property,

and filed fraudulent court records against real property owned by Helvetia. The jury awarded

sizeable actual damages as well as punitive damages and attorney's fees. The trial court rendered

.a judgment based on the jury's verdict and granted Helvetia a permanent injunction to preclude

Kahn from interfering in Helvetia's business. On appeal, Kahn raises numerous issues challenging
                                                                                                        04-14-00569-CV

  the judgment. However, because Kahn lacks standing to prosecute this appeal, we have no

  jurisdiction and dismiss the appeal.

                                                    BACKGROUND

          Given our disposition of the appeal, a detailed rendition of the facts 1s unnecessary.

  Accordingly, we provide only a brief factual and procedural statement for context.

          Helvetia is a company that owns and sells real estate lots to builders in San Antonio. Kahn

  was the president, secretary, and sole director of Helvetia from October 2009 until he was

- terininafed in August 201 :r. Kfter he wa-s terminated, Kahn b-egan to take actions detrimental to

  Helvetia, including transferring by deed numerous properties owned by Helvetia to a company

  created by Kahn after his termination - Paradiv Corporation. Upon discovering what Kahn was

  doing, Helvetia filed suit to set aside the deeds. The trial court ordered the deeds set aside and

  thereafter, on November 4, 2013, Helvetia filed a suit against Kahn alleging numerous causes of

  action based on Kahn's activities after his termination. 1

  1The day after Helvetia filed suit, Kahn also filed suit, seeking to set aside several deeds from Helvetia to certain
 buyers ("the Lien Case"). Kahn claimed the deeds from Helvetia to the buyers were fraudulent. Initially, the trial
 court granted the relief sought by Kahn, rendering an ex parte temporary restraining order. Kahn filed that order in
 the deed records, thereby clouding Helvetia' s title. The trial court granted the ex parte order based on documents filed
 by Kahn, who claimed to be acting as president and authorized representative of Helvetia. Kahn failed to disclose,
 however, that in the prior- litigation-filed by Helvetia-in October 20Br>motheLtrial cnurtllad declared as fraudulent
 the deeds Kahn transferred to Paradiv, determining Kahn had no authority to act on behalf of Helvetia. After Helvetia
 discovered what Kahn had done, Helvetia filed a motion to set aside the trial court's order, advising the trial court of
 the prior ruling and seeking injunctive relief to preclude Kahn from interfering with Helvetia's business or holding
 himself out as an authorized representative. After an evidentiary hearing in December 2013, the trial court overturned
 its prior order, finding Kahn made false claims in order to secure the prior order. The trial court enjoined Kahn from
 acting on behalf of Helvetia in the future.

 In addition to seeking to set aside the trial court's order in the Lien Case, Helvetia sought sanctions against Kahn.
 After another evidentiary hearing, the trial court imposed sanctions against Kahn. The trial court found, among other
 things, that Kahn did not own Helvetia or its stock. Rather, the trial court determined the sole owner of Helvetia is
 Puerto Verde, Ltd. ("Puerto Verde"), which is owned by Robert Ripley. Kahn appealed the sanctions order to this
 court. On July 22, 2015, this court dismissed Kahn's appeal for want of prosecution. See Jn Re A Purported Lien or.
 Claim Against Helvetia Asset Recovery, Inc., No. 04-14-00357-CV, 2015 WL 4479600, at *1-*2 (Tex. App.-San
 Antonio July 22, 2015, no pet. h.) (mem. op.).

                                                           -2-
                                                                                        04-14-00569-CV

        On April 4, 2014, while Helvetia's suit was pending, but prior to trial, Kahn filed a

voluntary petition for bankruptcy, which immediately stayed the trial court proceedings. However,

the bankruptcy stay was lifted by order of the bankruptcy court on April 28, 2014. Thereafter, the

case proceeded to trial.

        Ultimately, the jury found Kahn breached his fiduciary duty to Helvetia, misappropriated

funds from Helvetia, used Paradiv to perpetrate a fraud for his benefit, held money belonging to

Helvetia, slandered Helvetia's title to certain real property, and filed a fraudulent court record or

document against real property owned by Helvetia. The jury awarded damages for each claim.

The jury also determined Kahn's breach of fiduciary duty and perpetration of fraud was committed

"either maliciously, fraudulently, or through gross neglect," resulting in an award of punitive

damages in favor of Helvetia in the amount of $900,000.00. Finally, the jury awarded trial and

appellate attorney's fees. The trial court rendered judgment based on the jury's verdict and

rendered a permanent injunction, precluding Kahn from interfering in Helvetia's business. Kahn

perfected an appeal from the judgment.

                                              ANALYSIS

       Kahn raises numerous issues challenging the trial court's judgment. In response, Helvetia

contends, among other things, that this court must. dismiss Kahn's appeal because we lack

jurisdiction. More specifically, Helvetia contends that as a result of his decision to file a voluntary

bankruptcy petition, Kahn has no standing to pursue this appeal because his appellate rights in this

appeal vested with the bankruptcy trustee, who sold those rights to Helvetia in a sale approved by

the bankruptcy court. Thus, before we can review any issues raised by Kahn, we must first

determine whether he has standing to pursue this appeal.

                                                  -3-
                                                                                       04-14-00569-CV

                        Standard ofReview & Relevant Law - Standing

        Standing is a component of subject matter jurisdiction that we review de novo. Sneed v.

Webre, No. 12-0045, 2015 WL 3451653, at *7 (Tex. May 29, 2015) (citing Tex. Dep 't ofTransp.

v. City ofSunset Valley, 146 S.W.3d 637, 646 (Tex. 2004); Tex. Ass'n ofBus. v. Tex. Air Control

Bd, 852 S.W.2d 440, 444-45 (Tex. 1993)). Standing is a constitutional prerequisite to maintaining

suit. Sneed, 2015 WL 3451653, at *7 (quoting Williams v. Lara, 52 S.W.3d 171, 178 (Tex. 2001)).

In the absence of standing, a court lacks subject matter jurisdiction to hear the case. Austin Nursing

Ctr, Inc. v. Lovato, 171 S.W.3d 845, 849 (Tex. 2005); Wolff v. Deputy Constables Ass 'n, 441

S.W.3d 362, 365 (Tex. App.-San Antonio 2013, no pet.).

       As recently reiterated by the supreme court in Sneed, "[t]he issue of standing focuses on

whether a party has a sufficient relationship with the lawsuit so as to have a 'justiciable interest'

in its outcome." 2015 WL 3451653, at *7 (quoting Lovato, 171 S.W.3d at 848). In Texas, standing

does not exists unless (a) there is a real controversy between the parties, which (b) will be actually

determined by the judicial declaration sought. Id. (quoting Tex. Ass 'n ofBus., 852 S.W.2d at 446)

(quoting Bd of Water Eng'rs v. City of San Antonio, 155 Tex. 111, 283 S.W.2d 722, 724 (Tex.

1955)). A determination of standing focuses on whether a party has a "justiciable interest" in the

outcome of the lawsuit, such as when it is personally aggrieved or has an enforceable right or

interest. Lovato, f71 S.W.3d af849 (citing Nootsie, Ltd v. Williamson Cnty. Appraisal Dist., 925

S.W.2d 659, 661 (Tex. 1996)); Wolff, 441 S.W.3d at 365.

                                     Application - Standing

       In this case, Helvetia contends Kahn lacks standing to prosecute this appeal as a result of

his voluntary bankruptcy filing. According to Helvetia, Kahn's right to pursue this appeal vested

in the bankruptcy trustee, who sold those rights to Helvetia -          an action approved by the

                                                 -4-
                                                                                         04-14-00569-{;V

 bankruptcy court. Accordingly, Helvetia contends Kahn no longer has any right or interest in this

 appeal, and therefore, no standing to pursue it.

         Filing a voluntary petition for bankruptcy creates a bankruptcy estate, which is comprised

 of "all legal or equitable interests of the debtor in property as of the commencement of the case."

 11 U.S.C. § 541 (a); see Douglas v. Delp, 987 S.W.2d 879, 882 (Tex. 1999); Rodriguez v. City of

 San Antonio, 113 S.W.3d 378, 380 (Tex. App.-San Antonio 2003, pet. denied). This includes

 causes of action or legal claims that belonged to the debtor before the bankruptcy petition was

 filed. Douglas, 987 S.W.2d at 882. The bankruptcy trustee, as the representative of the bankruptcy

 estate, has exclusive standing to assert legal claims that become part of the estate. Douglas, 987

 S.W.2d at 882; Rodriguez, 113 S.W.3d at 381. In other words, by voluntarily filing a bankruptcy

petition, the bankruptcy debtor relinquishes to the trustee any standing to prosecute or dispose of

 the claims included in the estate. Douglas, 987 S.W.2d at 882; Rodriguez, 113 S.W.3d at 381.

        It is not simply causes of action or claims that become part of the bankruptcy estate. The

 Fifth Circuit, applying Texas law, has specifically held that defensive appellate rights are property

 under Texas law and become part of the bankruptcy estate. In re Croft, 737 F.3d 372, 376--77 (5th

 Cir. 2013) (per curiam). As the court explained, "[w]hile it is true that a judgment against the

 debtor is an obligation and has no value to the estate-and would therefore not be included in a

list of property-the right to appeal that judgment certainly has a quantifiable ~alue to the debtor,

 and therefore constitutes property under Texas law." Id. (emphasis in original). Thus, property

 rights in a legal cause of action include not only the cause of action itself, but any appellate rights

 related thereto. Id. at 375.

        We find the Fifth Circuit's decision in Croft instructive. In Croft, Bradley Croft was

 involved in two lawsuits that ultimately resulted in sanctions against him and an award of

·attorney's fees in favor of his opponent. Id. at 374. Croft appealed those decisions to this court.
                                                    -5-
                                                                                         04-14-00569-CV

Id. Thereafter, Croft filed a voluntary bankruptcy petition. Id As required, we abated Croft's

appeals because of the automatic bankruptcy stay. Id.; see TEX. R. APP. P. 8.2 (stating bankruptcy

suspends appeal). In response, Croft filed a motion in the bankruptcy court seeking to lift the

automatic stay and allow the appeals to continue. Id Croft's motion was opposed under the theory

that Croft's right to appeal was part of the bankruptcy estate and only the trustee could prosecute

the appeals. Id

          The Fifth Circuit, applying Texas property law, held Croft's defensive appellate rights,

allowing him to appeal the sanctions order and award of attorney's fees, became part of the

bankruptcy estate when he filed the voluntary bankruptcy petition. Id. at 378. Accordingly, Croft

no longer had standing to pursue the appeals because his defensive rights in the appeals were

property of the bankruptcy estate and thus, the bankruptcy trustee had the right to sell the appellate

rights pursuant to a bankruptcy court order of sale. Id

          Here, as described above, Kahn was involved in a lawsuit that ultimately resulted in the

award of monetary damages against him, including punitive damages and attorney's fees. Kahn

voluntarily filed a petition for bankruptcy, creating a bankruptcy estate. Thus, Kahn's legal claims,

as well as his defensive appellate rights in this appeal, i.e., his right to appeal the judgment in this

case, was a valuable property right that became part of the bankruptcy estate. See id.              The

bankruptcy court recognized that this appeal was part of the bankruptcy estate as demonstrated in

its order entitled "Order Authorizing Sale of Aii Non-Exempt Assets, Claims and Causes of

Actions." In that order, the bankruptcy court specifically listed this appeal -        or the rights to

pursue it -   among the assets the trustee was authorized to sell. The relevant portion of the order

states:

          ORDERED that movant, Johnny W. Thomas, Trustee, be and is hereby authorized
          and directed to sell all property owned or claimed to be owned by the Debtor to
          include all the Debtor's non-exempt assets, claims and causes of action now

                                                  -6-
                                                                                      04-14-00569-CV

       existing or hereafter arising, all rights, titles and interests in any business or
       business enterprise that currently exist or has ever existed to Helvetia Asset
       Recovery, Inc. or its assigns, for $!0,000.00. This property includes, but is not
       limited to, the following:

                                             *    *     *
       All claims or causes of action held by or for the debtor, including but not limited to
       the following:

       Burton Kahn v. Helvetia Asset Recovery, Inc., No. 04-14-00569-CV; Fourth Court
       of Appeals, San Antonio, Texas.

       The trustee, in order to maximize the estate's value, sold the defensive appellate rights to

Helvetia, a sale that was approved by the bankruptcy court. Accordingly, we hold Kahn has no

"justiciable interest" in this appeal as he has no enforceable rights therein. See Sneed, 2015 WL

3451653, at *7; Lovato, 171 S.W.3d at 849; Wolff, 441 S.W.3d at 365. It therefore follows, and

we hold, Kahn has no standing to pursue this appeal as that right has been sold as part of the estate

by the trustee, who had exclusive standing to prosecute or dispose of the property of the bankruptcy

estate. See Croft, 737 F.3d at 376-77; Douglas, 987 S.W.2d at 882; Rodriguez, 113 S.W.3d at

381.

       In his reply brief, Kahn argues his defensive appellate rights in this appeal are not part of

the bankruptcy estate because the trial court's judgment was rendered after the commencement of

the bankruptcy proceeding. Thus, according to Kahn, the defensive appellate rights created by the

judgment were not part of the bankruptcy estate.            We disagree.    Although this case is

distinguishable from Croft because in Croft, the defensive appellate rights were created prior to

the filing of bankruptcy, the bankruptcy code specifically states that any interest in property that

the estate acquired after commencement of the case becomes property of the bankruptcy estate.

11 U.S.C. § 541(a)(7) (2015); see In re C-Power Prods., Inc., 230 B.R. 800, 803 (Bankr. N.D.

                                                 -7 -
                                                                                      04-14-00569-CV

Tex. 1998) (holding that not only pre-bankruptcy petition malpractice claim became property of

bankruptcy estate, but post-bankruptcy petition malpractice claim likewise became property of

bankruptcy estate.). Accordingly, we hold the fact that the trial court's judgment was not rendered

until after the bankruptcy petition was filed is irrelevant. Kahn's defensive appellate rights in the

appeal became a part of the bankruptcy estate whether they existed before or after the bankruptcy

petition was filed by Kahn. See 11 U.S.C. § 541(a)(7); C-Power Prods., 230 B.R. at 803.

                                           CONCLUSION

        Based on the foregoing, we hold Kahn had no justiciable interest in the right to pursue this

appeal. The defensive rights to this appeal became part of Kahn's bankruptcy estate, and the

trustee was authorized to sell the rights pursuant to the bankruptcy court's order. Accordingly, we

hold Kahn has no standing. Given Kahn's lack of standing, a component of subject matter

jurisdiction, we hold we have no jurisdiction over this appeal. Accordingly, we dismiss the appeal

for want of jurisdiction.

                                                  Marialyn Barnard, Justice

                                                 -8-
                            jfourtb QCourt of ~ppeals
                                  g,an ©:ntonio, \!rexag
                                        August 19, 2015

                                      No. 04-14-00569-CV

                                        Burton KAHN,
                                          Appellant

                                               v.

                          HELVETIA ASSET RECOVERY, INC.,
                                     Appellee

                   From the 37th Judicial District Court, Bexar County, Texas
                                Trial Court No. 2013-CI-18355
                         Honorable Michael E. Mery, Judge Presiding

                                            ORDER

    In accordance with this court's opinion of this date, this appeal is DISMISSED FOR
WANT OF JURISDICTION.

       We order that appellee Helvetia Asset Recovery, Inc. recover its costs of this appeal from
appellant Burton Kahn.

       It is so ORDERED on August 19, 2015.

                                                                    d affixed the seal of the said
EXHIBIT 2
•                                                                                    ~      EXHIBIT

                                                                                     ~      !
                                                                                     ~-=+--
                                      MISC. DOCKET NO. 20l3-CJ-l75 l 6

      JN RE: A PURPORTED LIEN                           §            JN THE DISTRICT COURT
      OR CLAIM AGAINST HELVETIA                         §
      ASSET RECOVERY, INC.                              §           43lffH JUDICIAL DISTRICT
                                                       §
            Property Owner                             §             BEXAR COUNTY, TEXAS
                                                       §

                     JUDICIAL FINDING OF FACT AND CONCLUSION OF LAW
                            REGARDING A DOCUMENTOR INSTRUMENT
                            PURPORTING TO CREATE.A LIEN OR CLAIM

             On the -       day of    OCT .2 aZDD           '   2013, in the above entitled and numbered

     ca.u3c, thi3 Court reviewed a. motion,- verified by a.ffida.vit, of Robert Ripley a.nd the

     documentation attached thereto. Additionally, the Court reviewed the "Warranty Deed" and

     "Correction Warranty Deed" attached hereto. No testimony was taken from any party, nor was

    · there any notioa of the Court'c revie\v, the Court ha.ving made fhe -detetmina.tion that a. deoiaton

     could be made solely on review of the documentation under the authority vested in the Court

     under Subchapter J, Chapter 51 of the Texas Government Code.

             The   Court finds: a~ follow_s: the Warr.mty D~ed, attached hereto -su~ Exhibit I; the Revised

     Warranty Deed, attached hereto as Exhibit 2; and the Correction Warranty Deed, attached hereto

     as Exhibit 3 (collectively, the "Warranty Deeds"), are NOT created by implied or express

     express c6nsent or agreement of an agent, fiduciary, or other. representative of that person. The

     Watranty Deeds, attached hereto as Exhibits 1-3, do not grant Parad[v Corporation any interest in

    the property described therein.
            The Court makes no finding as to any underlying claims of the parties involved, and

    expressly limits its finding of fact and conclusion of law to the review of a ministerial act. The

    JUDICIAL FINDING OF FACT AND CONCLUSION OF LAW RE.GARDING
    A DOCUMENT OR INSTRUMENT PURPORTING TO CREATE A LIEN OR CLAIM                                     Page I
county clerk shall file this finding of fact and conclusion of law In the same class of records as

the subject documentation or instrument was originally filed, and the court directs the county
clerk to index it using the same names that were used in indexing the subject documentation or

instrument.

                                                 0Ci.tt8
       Signed on this the __ day of _____________

                                                IJl:STRICT JUIJGc

                                                Bexar County, Texas

JUDICIAL FINDING Of FACT AND CONCLUSION OF LAW REGARDING                                     Page2
A DOCUMENT OR INSTRUMENT PURPORTING TO CREATE A LlllNOR CLAIM
...--------------···.

  5CAl"tlEO                           WARRANTY DEED

     Granror:            HELVETIA ASSET RECOVERY, INC.
                         BBXAR COUNTY TEXAS

     GRANTEE:            PARADTV CORPORATrON
                         BEXAR COUNTY, TEXAS

     Consideration: TEN AND NO/JOO DOLLARS and other good and valullb!c consideration

     Property (including any improvements)
     BLOCK 3 WT! , BLOCK3 LOT2, BLOCK 3 LOT 3 , BLOCK 3 LOT 4, BLOCK 3 LOT 5 .
     BLOCK 3LOT6 ,BLOCK3 LOT7 ,BLOCK3 LOT8,BLOCK3LOT9 ,BLOCK.3 LOT 10,
     BIPCK 3 LOT 1I,BLOCK3 LOT 12. 5LOCK 3LOT13, 5LOCK 3 LOT 16, BLOCIU LOT J7,
     BLOCK3LOT 18,BLOCK3 LOTl9

    , BLOCK 4.LOT I, BLOCK 4 LOT 6 .> BLOCK4 LOT 7, BLOCK4 LOT & , BLOCK 4 LOT 9,
    BLOCK 4 LOT I0, BLOCK 4 LOT II , BLOCK 4 LOT 12, BLOCK 4 LOT 13 , BLOCK 4 LOT 14,
    BLOCK4LOT l5,BLOCK4LOT16, BLOCK4LOT17,BLOCK4LOT18,BLOCK4LOT19,
    BLOCK4 LOT20.BLOCK4 LOT21 .BLOCK4LOT22 ,BLOCK4 LOT23 ,BLOCK4 LOT24,
    BLOCK 4 LOT 25 , BLOCK 4 LOT26. BLOCK 4 LOT 27 •BLOCK 4 LOT 28

    , BJACJ( 5 LOT I, BLOCK 5 LOT 2, BLOCK 5 LOT 3. BLOCK 5 LOT 4, BLOCK LOT 5.   s
    BLOCKS LOT 6, BLOCK' LOT 7, BLOCK' LOT 3, BLOCK 5 LOT 9, .BLOCK 5 LOT 10,
    BLOCKS LOT 11,BLOCKS LOT 12 ,BLOCK5LOT13 ,BLOCKS WT 14,BLOCKS LOT 15,
    BLOCKS LOT Hi, BLOCKS LOT 17 ,BLOCKS LOT 18 BLOCKS LOT 19 ,BLOCK5LOT20,
    8LOCK S LOT 21 , BLOCK 5 LOT n , BLOCKS LOT23 , BLOCKS LOT 24 ,»LOCKS LOT 2~,
    BLOCKS LOT 26, BLOCKS LOT 27, BLOCK 5 LOT 28, BLOCKS LOT 29 , BLOCK 5 LOT 30 ,
    BLOCK 5 LOT 31 , BLOCK 5 LOT 32 •

     BLOCK 6 LOT I • BLOCK 6 Lill 2 , BLOCK 6 LOT 3 .BLOCK6 LOT 4 •BLOCK 6 LOT 5 ,
    8LOCK6LOT6 ,BLOCK6LOT7, BLOCK 6 LOT 8, BLOCK6 LOT 9, BLOCK6LOT10.
    BLOCK6 LOT II, BLOCK6LOT 12,BLOCK6LOT 13 .BLOCK6LOTl4,BLOCK6LOT15
    ,BLOCK6LOT 16, BLOCK6LOT17, BLOCK6LOT 18, BL0cK6 LOT.19, BLOCK6 LQT20.
    BLOCK 6 LOT 2 I • BLOCK 6 LOT 22, BLOCK 6 LOT 23 , BLOCK 6 LOT 24 , BLOCK 6 LOf 25 ,
    BLOCK 6 LOT 26, BLOCK 6 Lor 27 ,BLOCK 6 LOT.28 , BLOCK 6 LOT 29, BLOCK 6 LOT 30 •
    BLOCK 6 LOT 31 , BLOCK 6 LOT 32,

     BLOCK 7 LOT 1 , BLOCK7 LOT 2, BLOCK 7 LOT 3, BLOCK7 LOT4, BLOCK 7 LOTS,
    BLOCK 7 LOT 6, BLOCK 7 LOT 7 , BLOCK 7 LOT 8 , BLOCK 7 LOT 9 , BLOCK 7 LOT IO,
    BLOCK 7 LOT 11, BLOCK ?LOT 12,BLOCK 7LOT13,BLOCK 7LQT14,BLOCK 7 LOT15
    ,BLOCK 7LOT 16,BLOCK7LOT 17 ,BLOCK 7LOT 18 ,BLOCK 7LOT 19,BLOCK 7 LOT2.0,
    BLOCK 7 LOT 21 •BLOCK 7 LOT 22 , BLOCK7 LOT 23 , BLOCK 7 LOT 24 • BLOCK7 LOT25 .
    BLOCK 7LOT26,BLOCK 7LOT27 ,BLOCK7LOT28, BLOCK? LOT42 ,BLOCK 7 LOT43,

                                                                                        3pgs

                                                                                         EXH!BlT1   ~
      BLOCK 7LOT44, BLOCK 7 LOT 45 ,BLOCK 7L0T46., BLOCK 7LOT47,BLOCK 7LOT48,
      BLOCK 1 WT 49, BLOCK 1 WT 50, BLOCK TLOT 51 , BLOCK 7 LbT 52 ,BLOCK 7 LOT 53 ,
      BLOCK7 LOT 54 , BLOCK 7 LOT SS, BLOCK TI.OT 56 , BL()CK 7 LOTS? , BLOCK 7 LOT 58,
      BLOC.K7I.oT
               ..· 59,BLOCK
                         ... 7.WT60,BLOCK7LOT61,BLOCK7LOT62
                                -.        -  -        -      '       _, BLOCK7LOT63
                                                                        -   '         "
      BLOCK 7 LOT 64 , BLOCK. 7 LOT &S, BLOCK 7 LOT 66 , BLOCK 8 LOT .I ,

      BLOCK 8 .LOT 2, BLOCK 8 LOT 3, BLOCK 8 LOT4, BLOCK 8 LOT .s, BLOCK 8 LOT 6,
     BLOC!( R LOT Ii. RJ.QCl(.t IDT IQ ,BJ..OC.ICllLOT20 ,BLOC:K:iLOT 21 ,BL()Cl:'. a. LOT 2:2,
     BLOCK 8 LOT 23 , BLOCK 8 LOT24 , BLOCK 8 LOT 25 , BLOCK 8 LOT 26 • BLOCK 8 LOT 27 ,
     BLOCK 8 LOT 28, BLOCK 8, LOT 29, BLOCK 8, LOT 30 , BLOCK 8, LOT 31 • BLOCK 8, LOT
     32, BLOCK 8, LOT 33 • BLOCKS, LOT 34,

        BLOCK 9 LOT I , BLOCK 9 LOT 2 , BLOCK 9 LOT 3 , BLOCK 9 LOT 4 , BLOCK 9 LOT 5 ,
      BLOCK9 LOT 6, BLOCK 9 LOT 7, BLOCK 9 LOT B, BLOCK 9 LOT 9; BLOCK 9 Lot 10,
      BLOCK.!/ LUI' l I, HLUCK!I LU'!' ll ,HLUUI. !I LOT 13, l!LOCK9 LOT 14, HLOCK 9 LOT 15
       .BLOCK9 LOT 16 ,BLOCK.9LOT17,BLOCK9LOT18,,BLOCK9LOT 19 ,BLOCK 9LOT
      20, BLOCK 9LOT 21 , BLOCK 9 LOT 22, BLOCK 9 Lot 23 , BLOCK 9 LOT 24 , BLOCK.9
      LOT :ZS ,BLOCK I> LOT :l6, BLOCK!> LOT 27, BLOCK 9 LOT 28, BLOCK 9 LOT W, BLOCK
      9LOT 30 ,BLOCK9 LOTJI ,BLOCK 9 LOT 32,BLOCK9 LOT33 ,BLOCK9 LOT34,
     . KEY LARGO SUBDIVISION CB 05065 IN BEXAR COUNTY, TEXAS AS PLAT RECORDED JN
      VOLOMe 9573 PAGE 13 Property Records, BeJW"CQUlllY. Texas,
                                                                          ... :    .
     RllsERVATION From anQ Exceptions to Conveyance and Wan:anty:
          Easements, rights-of-way, and ~riptivc rights, whether of record or not; all presenlly
     ra;;opJcd   Iu:strum~nt.:f.   utlK:.r ibmJ   li~JJft   w:xJ convgywn.;;cs, ·lhaL llflbct lbQ prupc;;ny;         ~c:s     fur '11e current
     year, the payment of which Grantee assumes.
           Grantnr~     fnr th~ cnn.qidemtion..        ~eipt nf which i,:::       ar.lmnwlP..cfet-.rl._ A-nd   ~nhjP.cl fn   the n!V!t'VA1_i~n~
     from and cx4'C)ltions to conveyance and wammty, grants, sells and conveys to GTantee the propeny,
     together with all and singular the rights and appunenances thereto in any wise. belonging to have lllJd
     hold it to Grantee, Grantee's heirs, executor, administrators, successors or assigns forever. Gtantor
     binds Grarttor anc1 Grantor's heirs, executors, adlnmistmtors ancl successors to w!lmllll ancl 1orever
     defend all and siugular the properly to Gtantee and Grantee's heirs, executon; administllltors,
     successors and assigns against every person whomsoeverlawfully claiming or to claim the same or any
     part thotoof,, oxocipt ao to tho reDervntioJtG &om and oxooptio~:to QOnvoycmoo cand Vt'QITIUtty.

                                                                 nouns and pronouns include the plllllll.

     Thi• instrument was acknowledged before me on Septembe~20!3 by Bm1on KJihn.
     President, Helvetia Asset ]lecovery, fac. ·
!.
 SEP 3D2013

·--·-
oom:.s OF .CQIFillENJ'Il\LITY RIGllfS:               IF YOU ~ II         Nll1'URAL l'ERSOO,
Ulf :rnr; fyLU.M.lf«.:i _J..rU!\JIU'V\'1..lU'f .t\QIJ l'H.l::S J.N:;fntU'ZNl"   ~UlQ:i
                                                                                               YOO MAY R 9:f/:J l'AGh IJ l'l'Openy RecOl'Y Burton .~
President, Helvetia Asset Recovery, Inc.

                               -----·---
OCT 4 20l3

-~~
a
Lil
                         ··--· .... - ---· .. ..                mnn~........,.N
                                                                   ·~·....,
                                                                                               ., ·.· .... ...._      --
z                                           .                 WARRANTY DEED                         .            .
~ GI--: ___ ,
u                    ·
                                    1

                                            mum .....JllCO.\IHY.-BJC
                                    . 'BBXAR.COUNTYtmrAS                                     0 -.
                                                                                               .,.. -'•. l'l'·'·
                                                                                                           . .
                                                                                                                  ·".            :).'.'. -,
                                                                                                                                ~'        ~

en                                        . . .     . .                                           •,             ·•        -·    •       Jo'

      GMND&:                                PARADIVca.tPORATION                        tiljOllDllUllNlilllfl
                                            BmcARcotlNTY. 'JECAS                       '!!-~T~2~
      c    JJ ,.-             'IllNANDNIYIOOnoltARS_.ollowllD04-' • "'                                 .,_   r
      l'   . t:r(i       t    ,.        .    •
       ~                     . , • ..,.          I        ~
                                                          1

                                                     OU                            •
      Bl0CZ.3IDI'1,BWC[3J,IJ'l2,BUXX3 UlT3,fli.oc(3 LOI' 4, Bl.OCS:3tor5.                                                                      .,..
      Bl)XX31D'r6,mnrs:3UJr7 .J!WCX 3LOJ'l,'ll'.Ta .BIDClt5J.QT9•mocr5r.or10.
      BLOCX s LOT 11,BLOClt swr 12,BLOCK:sLOT13. m.ocxswr 14,Bl'...oa:s rm 1s.
      moorswr it. arnrs:star rt ,m.oats:rnr llBLOCr: SIDI' 19 ,Bl.OCXSim.20.
      B1QCXswr21 ,BLOtar10,
BLOCltSI LOJ.'22 ,DJ.0Cr9 LOT23, BUXX 9LO'l'24,Bl..(J(X9
Wf25 ,llUXX9 IDr26 ,BLC>Clt9I.Or'ZI ,BLOCK9LO'J'21, BtOCK9LOr29. BLOCK
9 LOT JO ,m.oa::t LC1r 31,BLOC:lt 9I.Of 32,BLOCZ9Wf33. mocr !IJ.01' 34,
KBYLAROOSIJBDMSl)NCB OSll6SJNBl!XAllOOUNTY,'l'BXAS AS PLATRl!C(J!I&> IN
VOLUME9S73l'A.0Bl3Ptupid.Jlt1ca dl,BmKQaSJ, t.aa

      O.W.ktlia:          ·• m1a,11111111pt0lw.ic:1u11••• x' .., ,,_.....,....,. . ._ ,... _
fbomlc I IJ&wlll-WJLICI ... .......,. . . . . . . . . WWWUIJUDOlll*etb8J111411d1, •
11Jii61r'Wi6allllll..-t.Ji&flllmllPl*r . n .._. • ..,,.w,.;.,1011aftm1
lauld it ton. 0 ,,, 0    t •• ~        - . . . . . . . . 2 ••• ••                 • .............                ~
b&ldl GAlllm' lll&f· Ciaalaf• .... ,_ ................ - •• • ... »-'Mlllll - . . . .
ddillld-11111111 . . . . . . . papal;--· 0 . . -- a...•1 ..... I I la;_ w• ·.;.h*'i;
• • 'tmi-.....-..,,_.w
pmt......;Stlpl'a~~.lli!Lfl. . . . ~md'IQ q1'"
                                                      1     uerJawlilllJ ·'
                                                                   .........riJ
                                                                                  ·•«•dlllll.1flew~1111
                                                                                           SD~   il    .   J:.

      Wllmaileealll:d;   .,,~ ••• _                _...µ.         -~~,bli_·.-                         ..
 This           Deed Is fil

                   ACl.by and throuah hisal!OnxWofrccord. Sam M. Cfrey) Yates. lll. lllllCCto enttY ofthe
0                 following Findings of Fuct and Concbt.slom of Law in support of an Agrtttl Final .1udgtrttN of

                  hbltc Re[Jl'/mand.
                                                      L lll'il>INGS OF FACT

                  I.     HOWARD M. KAHN is ID attoxncy licemed to pnctice law in !he Stete of Texas and is a
                         """"""'" nf•"" S'rATF. HAR Of' TRxuc

                  2.     Respondent'a STATE BAR OI' 'fexAS Bar Cani Number is 11072500.

                  3.     lbspondent maintained his principal place of praclice in Hanis County, Tcxu, on the date
                         this CUC 1Mlll first filc:d.
                  4.     Sarah Keplinger, a licenaed n:al esbUe agent, rented aboUlle owned by her daughter and son-
                         in·law. Sherry and Hc:rlicrt Lllncuter.

                  S.     Keplinger and the Lancm1en executed a writf!:n i11$1IUmcnt. The Lan.:astcn tbQught the
                         insuwni:nt reflected Kepli.ogcr's intent to purchase. the property in the fllnR. along with a
                                                                                                                  l'llo I

                                                                                                                 i ! EXHIBIT
                                                                                                                 .~§ --L----to
.
    .-
                                      -      .

                m:itationofthc amount of rent Keplinger wu to pay CllCh month to satisfy lhc purchase
                price or one hlllllt!al rony lhOmlnd.lllld llOflOO '.IP CODE 78238 I

 il.1'uiling Addr~~ Qf Dcbl1Jr_(if dlfli::rctn troin: Stred. 2ddrcss):                                                               M'i:iifffig Address nfJQini Debtur-(ifi:liffercnt tr01n s.tre~t :td l.-1..C 2n~t LLP)
             Partr.c:r:>hir
            ()1her ;1f debtor is. not one of Lh~:ahovc cmiti<:s,
                                                                                  ID
                                                                                   0
                                                                                                f(a1!rnad
                                                                                                Sto~kbrtJkcr
                                                                                                Commodil)· llntker
                                                                                                                                                        )§            Chapter 12
                                                                                                                                                                      Chupt~•        J:t
                                                                                                                                                                                                  D         Clmplt'r 15 Petition l'Or
                                                                                                                                                                                                            Rr                                                                                       Nan1re of.Of!bt~
                                                                                                                                                                                               (Chci;fi one 00.x.}
                                                                                                       Tax~f.:Yhnpl Entirr
                                                                                                    (Check box, if:npplicable)                          I[,?]      Debts a~ primarify: con.sur.rit"r               0     l)i;bts ~re orirnari!v
                                                                                                                                                                   debti;, defined. in I:! { ).~:C                        bu..;;incss debts. •
                                                                                        D      Debtor is a ta."\"--c;o::n:;pt illrl"k.':l!l~. Ruic: J!X}()(b,i. S-i:e OtTicia! Fi:inn JA..

            Filing Fe,.; w~ivJ;::r ri;;quc:>R.d {app!il:tih!c ~o .;liapt0r 7 ind1v1dtiafs oa!y;. !vfost
                                                                                                                                 1
                                                                                                                                     0

                                                                                                                                     Dd~
                                                                                                                                         Dcbt11r h: no\ a M~w.I! busin~s d;:-bror as dt:Iint". t::Or<$!dcr.J.rio11. S:e-.:: Otttcial fo:m 3B.                      ----· -- --- . -- -- --- - - - -- . -- - -- - -- -- -
                                                                                                                               r Chr:rtk all. 11,ppfkabl.e fm~es:
                                                                                                                                i0 A r.;<;'.°~

I?.!                0                  0                                          [j                   0                     0                      D                                                                              '..,,,.,,,,,
~o     tc           S.'!O.frJI :,,                                                $1.000.0f)l                                ~50.IX!O,fJOl          '.b100.oor:=.001
                                                                                                                             itl j; Ji]t}
                                                                milli,)n          mii/i1;n             mil!ivn               ;nj]li(lf;             mi!ikm:
E~fimlltC~i ~.foOiiili(!s
r-,
'-'
~I (<;
                    0
                    $S':U.l0l . musi &e comf)fet1'ri and i?l;:din ~1.'i."1)'-r:ase.i                                                                    CRQFTi BRADLEY, L.
                                                   All Pl'ior Ban'knintcy Cast:s filed. "'.ithia r.a8t. 8 Years {'It' more lha."l twO. u.uaa:b. add-i1ional sh Rl> !ridi~·iduu!
 {Ttl be .::.oinpkLed ifuant· !o Section 13 C\ _15(di of111~
 Scce.riri..:~ J-:xchan_gt~ At:r ~1f i 93-~ aud is rc.qu...---:>thig_ re:lief ·under chaprcr 1 L)                                     I, rhe ailom._:y for           th~   pctitiont::r   na1m.~d   i11 the foregoing 11ctition. dedare rh:-ir f
                                                                                                                                      hll\'e informed rhe petirioncr thal-[ht) or~hcj nmy p1oceed 1111Jc1·ch~1pr..:r7, ·i I, 12,
                                                                                                                                      or 13 oftiUc J J. Unitt.'it Stares Codi;, and hav?: c·:q11ained lbt- ri:tlief~ ...-ailabk undt.>r
                                                                                                                                      euh snch .dmpt".r. I further ccrtjfj Thai l haw:.f dc!i'i'Cl't..._1 !O !he dehtor th1: 11ctici!
                                                                                                                                     :qu~dhy ll lLSC !7~~;.J/ (~                                        1./
 0       Exhibit A rs-artad1cd an;rri,;t for /St; ..-Jays immedia.td!'
                          precedi11g the date or"thi:; p.:liLit•n ;)r fin a kmg..::r p;:r! ofsnch 180 da}'.<. lh.Un i11 any olht'!r Oi!>1ric1.

                   0                                                                                                                                                                                                                               I
                   [J     De-Ot-t.1r i'i::; dcbtcr !n a {i)n:ign p:n:'\:e.'~ding and h.as irs prilldpa? place ofb11siJ?.;s.<; oc pnncij)fiJ i">ssr.:is in iho::- Cnit..:xi S~ates in rhi;; l.}i~,trict. or ha~
                          l~O prin.;:fp:iJ pllhX. i)f busillc.s~; irr as-;ci~ in lb~ United St.ales but i:> a detl'fl:;.:> will 1)-.:. ~-1 ';';.;~ _in rt:i;iird w tilt'· relief .<;(ltlgflt In this !Jfatrict
                                                                                                                                                                                                                                                   Ii
                                                                 Ceotificatw11 l:ly      ;:i   Deb!uo \\'ill)    ~tside:i: &:1        a f emrnf of Rt!t.iilcntial Pro-µt!'ty
                                                                                                     ~C-hr,:ck   ell   11T1pl!:-:;1~1l..:   b 1;xcs.)

                0

                                                                                                                                                                                                                                               I
                D             J;cbtm· d.:1ims lliai u.r.di::r a_pµ!iC:: uonba11kruprcy k1w, iherc_ii.n: 1;ircmnstanct>s uncli:r which ih.;: ddi\or '8f1Hld be r-c:rmin.:-J-ro.c1!rc !lJt:
                              eil'.ir~ mrn~~"lai.1 •Jcf~nH Uw.~   µ:a;·c: 1·i:.->~ z, the.-judgn1~1Jt f,1r j:)\ISk,-;.S;:'.):-J .• aft<;;~ Ille- .iu: fHing
                              ,,~-the p~~ liion.
                11-52905-cag Doc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 3 of 15
H! ((\fft(;illl Fumu l (4/l()',:
Volunt.a11' t"etition
rThis :"J/JF'I..' nnt.;;f bt· coml){efed •?1rd ,filed ffi ever;..' ·~a.w:.)

l det.-bLre und('.f pcualty l)f pt.7j11ry that tlK iu!"Otnmtinn prnvi.:kd in thi!": peii\i,10 i~ true                             f dedare under P'..:naii}' of perjuty that tl;t: itifonaaHon p.rnvidcd m this Dt:lilion is
and eiJrrect                                                                                                                      true r I J 11f tillc i I. !)nftcd States Codt:, undCP.'itaud fl:lt' tclit:-f~walli!hle undcr ea.;:b ~mch
                                                                                                                                 (Chtck :>nly on.e !'lox.]
chap1cr. an.> :>.ttOl'iluy :.:pre:.~nT!l inc ?.nd fa\ bunkruptJ,;y p;;::titim; ;.."';1-Cpir.J iln; pt:tiJiuuJ
                                                                                                                                 D        ! rcquest_relicfin acc1xdan~ \'lilh i.:ha_r-tcr 1" 11frirlr- 11 I in11Nt .~t('!tL~.- Code.
                                                                                                                                          Cer'l'il'icd 'upie:; ufthe document:; requln.'!J h,v l J U.S.C. § 15 l 5 ::.re ar.achcd.
J1:~vc 0bl:ained and rc.riJ 1hct?Otice !t!qtLired hy '! 1 U.~.C- § 342.(J:i).

                                                                                                                                 0      Pi.1r:>.llil.nl to 11_ U._S,C. § J5 l ! , -\crequcst reli_ef in.ac:C(\rdancc with th.,;-
                                                                                                                                        ch';lPiel' of title t ! ::pccitied ~n dtis l'>Cti'titXl .t\ (:Crti1ic1I copy of th<:
                                                                                                                                         <:":rdcr gt"t!!ll[ng rcco)'?.JJilk)n ofrhe lbr~ign m:tiu pro::e¢dini; ir.. arwchcd.

                                                                                                                                 x         NIA
                                                                                                                                        (Sigr.uturc offcrdg.11 Repre.sc-ntatlvc')

                                                                        -------·····-------
                                                      ---~----

          "ttlf~§~~6¥11ber (if                        not rcprc:senl-:.'-11 by ::attor11cy-·J                                              -------···--------·--·· .. ---------·--·--·
                                                                                                                                        Dare
          Date
                                                         Signniture of Attornl':y:.t·                                                                  Signann"f    of~o:n-Att.orney      B1n1kruplty Pr:titfon Prtpa,.er

x                                                                                                                                l dec/11rc_ n11dcr penally of perjury thnt: 1. L} I -am u bitnkrup1cy petition pre.parer ?.S
                                                                                                                                 defim::Ll in 1-l lJ.S.C. § 110~ (2) I prcpar.xithis dtic11mcri1 for COHlptnsntiim ~tl)d have:
                                                                                                                                 f.'JfC"t'i.:idtd the deht iuid infur:natiori
           Printt:J Name l)f .<\.ttOr/11!).'               n~r 'J)c:btor(S)
                                                                             ---------·-. ··-------                              required under J l ll.$.!.'. ~§I t!)(h), lJO(h), and 342\_h); r.nive Deen pro1m1fgated pursmml to Jl U.S.C. S rl(ith) se1ti11g a
                                                                                                                                 mu.x.imum fee fof services d1arg(~aJ)k b;,.. bankrupti.:y pcriti(Jll .Preparers, l h~vc giv . . . n
                                                                                                                                 the Jebtor norkc of the nia.xim~ amown bio:foril preparirig any di."1Cl.1rrient for filiT1g
                                                                                                                                 for a debtor (1r at:ci::pting any lt:e TI-om tht: r.leblor:· as ocqu.ircd iti that ~ei..:tirn-..
                                                                                                                                 (lftic,f11 Form_[<) j,.;-atm-::_bcd
                          ·-·--·-···- ··-·----------
          Adi:lress

                                                                                                                                        S0dal-Stcuri1y 1iumber i!f the hankniptc.y pi:tifion. _preparer i.~ net afi
                                                                                                                                        iudividual. ;,t:1k: the Sod~l-S.ecurity nt!mbcr nf !ltl' officer. principnt_
"In a '.A:l.SC i11 whk~b § 707(h-.l(4 t(D) ::tpp-liei>. thii; ~ignntur-t .· no- kDC1.'!!kdg_e.aikr ar. .inq!iiry· that the i0forn~atirm                                hy l J U.S.C. § r HJ.}
ii~   th.;; :><:hi.·... tlilc~    i~ ini_·on(;l.:l.

                                     Sig:oatu1~       ofUi:bl~hi~-per.">on,
                                                                                                                                 or purtnt~r v.i1r;s.c Sor..:ial.~Security numfx:r i-J pn~.,.iUed !<~>\iC.

           --~--                 ........
           -r;a e or Atltlloriud Inciividua~
                                            -----~-         - ~----·---------·
                                                                                                                               I;., ; .
                                                                                                                                 N nf all otfo:r fndivid11-ah w-,.._,..1 rrepa;ed >1r
                                                                                                                                 assi;;tt:d in prepsri,1g-this ;Jor.:t11n!!flf o.u;k.~<; the l;::tnkropi..::y 1v..:ti!i.!fTlwn
                                                                                                                                                                                                           pi::r:ffj!l.

                                                                                                                                                        pri!pater ·8 .f{2ff;<.~e Hi compiy H"fT~I r11e pra1·i.~~r;n.~ r;f r.irfr. I I
                                                                                                                                                       ,;fJJankrupi('_l' P-:-(xedr;rtl mttr re:;Ulf i11/in~·.1· or im1)r-i.mm 1ffnt
                                                                                                                                 and rhe l·'edera/1?.ul~.s
                                                                                                                                 urboih. ,:-: U S.C;; ilO; !-8 f.:.S.C. _.:: J-56.
11-52905-cag Doc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 4 of 15

                        UNITED STATES BANKRUPTCY COlTRT

            fn re_<:;R,OFT, BRAD!.,EY, L___ _                                            Case No.
                               Debt1ee or bankruptcy
  administrator tlmt outlined the opportunities for available credit counseling mid assisted me in
  _perfo1ming a refated budget ana1ysis7 but I do not have a _ccttificat.e frorn the agency t(V <.'.{J.re is_tlled
11-52905-cag Doc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 5 of 15

     B !D(OOicfol t:{'!m1 t, E)~h. D)(Jl/091-Cont.

           0 3. I certi l) that I requested credit counseling services from an approved agency hut
  was unable tQ obtain the services during the seven days from the time I made my request, and the
  foJJo,,.ing exigent circumstances merit a temporary waiver ofllie crcdir cotmseling requirement
  so I can file my hankruptey· c:.:t'"'?. no-..\;. [~un1n1ari:tl! e.:-vith respect to financial responsibilities.);
                   n Disability. (Defined in 11 U.S.C. § l09(h)(4) as physically impaired to the
           extent ofbe.ing unable. after reasonable effort. to participate in a credit counseling
           briefing in person, by telephone, or through the Internet.);
                   ;'.1 Active military duty in a military combat zone.

         CJ 5. The United Stales trustee or bankruptcy administrator has detennined that the credit
  counseling requirement of 11 U.S.C. § 109(11) docs not apply in this district.

       I certify um:!er pcm!liy of perjury that the infnrm01tiM1 provided above is true and
  cmTect

                                           Date: 08/2312011
            11-52905-cag Doc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 6 of 15

                               ln re _G~F:_()f=T, Bf3ADlEY, L                                                                                      c·ast.No.
                                                      Dcbl<>r                                                                                                                                    {If known)

                                             SCHEDULED - CREDITORS HOLDING SECURED CLAIMS
                 ~;t1ttc ihi::- uouw;c, u~ai!..iuis addn:~!i,,. irn.;'ludir~g 1.ip-••:otie, MI~ use !ht: coritinuation she.et pro.'ltidcd.
                        If any entity nthcr than a spou:>i:'. in a joint ca<;e niay he jointly liabk on a dai1n. place an "x··~ in lhe colun111 labeled "CodC"bl'or," indudc rbc
     i.::::nri.i:y 1;n the apprupriati.:: schcduk. of credilnrs, nnd cornplet.c Schcdu!c J-r-... Cndi::htors. If ujoint petition is fifed, stat~ 1-vh~ther tht." husband. \VitC,
     holb ol' !h.:n1. or the n1arit.a! cGn1nn1ni1y ni:.iy be liable on each elairn lry pla,,,;ing an '·fl,'' ''\1i./,'' ;'1." <)r '·C"' In. the column .labeled "f lusband, V./ifc,
     J<1irrt or Cnnn11unitv."
                        rr the c!ai~1 is .:.·.ontinge.nt. f)iace an ··x"" irl the t:nlurnn !ahded ··(:onrinzl".nt.''' rr lhe dairn j~ unliqui.1~1ed, pl~..:e ~m ~nc 11f
     the~- 'three co1trmns.J
                        Total the ·co1wuns bbefed-'"A1noonl of Claim \Vithour l)eductiog 'V~lw~ of Collateral" and ''U1tsccliJ'~1J .P(1rtioo. if Any'" in the-box~s
     lnbc.k:d ·"'[\•ta!(_<::)" o-n tl'te. kist ~ht::.:t of the eompktcd scheduh:;. R-epoM thd totaJ f'rom the -ct\hitn;;:; h1b.;lcd -AmoUin of t;tai1n \V~thct:t- DeJuciing Val:.ic
     of Cc;U.at:;'.:ral" nbo on tbc. SufnnHl1}.--flf Schedules ~ind. if th_c debtor is an individusl wiLb prfr;:iariI:y con<>unler debts, report tl1c iota! from the. c11lunu1
     labeled "l>nscc:.ired-Portion. if At1:/" on the-Statistic.al Sumn1ary t.i!"L:erLain Li.ahilitics anc.I Re.lrtted Dal Schcdnk J).

11:-~~~~r~._~5,;~~~~~~-.vAND l f.·~· ~"-;o :_.zf_· DA~~Zt~;~~D~A·:~I: ~ ~-· 9 AYto~i~·iii~~LAIM ~~~~?~~~-. i
j INCLlllJING ZIP CODE                                      ~
                                                                l1:         . 1'
                                                                               NATl'RE OF LIEN.   '-'
                                                                                                                                       1,.

                                                                                                                                             :::        i::         DEDUCTING VALUE                                            ANY
                                                                                                                                                                                                                                                   -1,:

                                 ~II ~ ~ ~ I
,   .\N ACCOl'NT NLMBE!!                                , :           ~ ~ ~ ,.       AND        . ~                                    1 ;:;;           ;            OF COLL\TERAL                                                                    '
t     (.}E,'~'  [JtStl"!.tCfftJJ'!S 4.!JOtt'-)                        z ! z ;:. :;
                                                                            1   OF.SCRIPTJO'N   1
                               I ~ ~ 8 A~~i;~:;:1:~w / C I ~ "' i
                                                                                                                                                                                                                                                      11..

                                                        1
I                                                           uf
1-.c-cotl\-. ,..o. -9509-- ----r I - +::~~::~0~ ;N j I                             1 - .. ------·----+-----------1   1

I
!
     CHASE BANK
     p 0. BOX 94014
                               II I                             I
                                                                        i
                                                                        I
                                                                        H
                                                                                   I
                                                                                   LIFE ESTATE OR I
                                                                               1' HOMESTEAD       I
                                                                                                                  !
                                                                                                                                 x                            ,I                    405.000.00 I
                                                                                                                                                                                                              I
                                                                                                                                                                                                                               25,000.00 I
I1   PALANTINE, IL 60094                                I       1.             ~----                                         I J                    I         \                                        I                                              I
                                                                            -l,·-vo-~~-TU•O"B:                                                                                                   -··· -+-
                                                                                               375 0 0
1
                                                   ·-·--i                     l ·.; ER 20°10°· '                                     -1,-     --I---\-
                                                                                                                                                I l                                                                                                  I
                                                                                                                                                                                                              I
. ACCOli:-..:T?\10.                  ··---··- ..                                                                                                                                                              1
                                                        I                                                                                           i
     SECURITY SERVICE FCU
.1 16211 LA CANTERA PKY i                                               H      lI MDX
                                                                                  2007 ACUP.A
                                                                                                                             j X                    /
                                                                                                                                                              i.
                                                                                                                                                              i                       19,000.00                                              -0-
                                                                                                                                                                                                                                                      I
                                                                                                                                                                                                                                                      I
II SAN ANTONIO. TX 78256 !                                                     I                                             I                                I                                               ,

                                                                                                                                                                                                              1                                       j

                                                                               1
L.......                                         ·---+.:1                      ~ v.\f.un s J~.9Q.Q..ool                                                       j,-- ..... ·-···---·---+----- _                                        _       ___    j!
j ACC0{fN"¥. !\'f).
l, ·- .. ..      ---                                 -1         ,                  HONDA ODESSY                              i
                                                                                                                             i                                1
                                                                                                                                                              I
     FIRSTMARK                                          1       !
!    P.O. BOX 701650                                    \       \       H      .                                             \ X                                                        6,800.00                                             -0-

     SAN ANTONIO. TX 78270                              1 ..  J_               i   ii.-~ir£$ _j_Q_OO.O•.QQJ,_ _,__'---+-~                                                                                                                     . ../
           eonrinuation sh¢:::\.<;                                                 ~uhh~mt i>                                                                 j$                                              !$                                      1
                                                                                   (Tola.! of!hi:; page;                                                                                                      j                                       j
           stti1t:hcd
                                                                                   70l3.l    ~
                                                                                   (ti~C-1.)Jl})' O!! ;i:.!;.,t pa;.!.t::)
                                                                                                                                                              i_;s_·____            4 ii.oaa:oo·-r ~ ---2-s-.o-_0-9-:0-01
                                                                                                                                                                   (~e.v011 l:'J':iG rn;. Su11?mar_.·   ,,f       (If <:ipf1fi.:11hl:::. n.:p:in
                                                                                                                                                                   S.:::heduk;..)                                 u!S.{< ;Jn S1a!i~:u:::1.i
                                                                                                                                                                                                                  ~u!el forth dn th_t: 5heets prcvipriati: 0cheduk: orcri:<.filors, and cornplcte SChetlulc H-Codebtors. lfajoi.t1I pt::litiori is tiled. m:.:.te \.Vhelher the husband. \>t·itC~
both ofthcui, tir lhe i1Jarital conHnnnity ff«1Y b~ liable on each clairn by placing an ''H,'' "\V ," "J," tlr "C" i[l tb<.'.. colu1'an lnhek~cJ "Husband. \Vifc,
Soint_. or Co1nn1unity." 1( thf: dalln is contingent~ pJsce an "X'· in the cnlnrnn l~hdt!d "Cernti11_~;ent_" lffh~ cfaitn. is ;.1nJi,1uidatt'd, pla<,;e n.n "'X" In th.:
C{)n.mn Jab..:;l..;d 11 lJnliqlddt1ted" l l'tb..:o clain1 is dispute~i~ pine~ ;111 ''X" .in the colu1nn labded "Dispuhxl.'' (You m:iy !Jt'."t::d lQ p!aet: an "X" in 1norc
than one of lh~:;~ three colu111n.'i.)

    REporL the tot::>! ~)fctaim~ li.c!ed on ~lit-h. sh~ct in the bo:t. lubcl . .xI "Subtoto.I s" nn c" un each sheet RcrL.nt 1hi.:- fo!af of ail
amount..:; nor cnth.led to priority li&icd on lhb Schedule E in rhc box labeled "Totals" on the Ja.."1: s.he~1. ofthr; cotnpI~tcd .sclt:'.duic. lnJi-..-ftlt1a.i dc-btur~
i.\'hh primarily cOnsuiner debts,report thjs total aiso on 1he Stal.i:st.ica1 Summary nfCenain Liabilities and .Related Dal.it

0      Domestic Suppnrc OblJgatJuns

      (:lairn.) for Jom..::stk support ;J1a1 an: (I Wed t~) or r.:-cnverahle by il :-i.puusc. foimcr Sj)nuse, or child of the debtor. nl' t'le. psrenl: lt~gal guardb-'..il~                                                              t)f

rcsponsihfe l'eia.:·ive of such a child, cir a g_;Jvern.rnental un.it ro \Vhon1 Sl!Ch a tlo~ne~tk .s.upporc ciaiin has teen <::.'lSi:;ncd tt) tl\i': C\"t:eJ?t f>r«1\"'• !t~d fri
 i I ti.S.C. § 507(a)fl).

o· ti:x1cnsiOas           lif credit      in Dll invofunt.ary ease

  Claims aris:ing ie the orin~s~ or financial ::i.iT'1ir:...: at1.:r tI1,,;: c~immence:rnenl of the 1;~:isc but hef1';rc tht t.'arlicr of the
ai1pointmi;;nt of a trustee or th~ o:rder for relief I 1 U}l.C'. § 50?(aJ{3 ).

   \V;.iges, salarie.. ,,.. a-nd cnnVA'li·.:;sioris.. !1H.·ludir1g vacar.lon, .scveiatin;1 of t1.1sin;:;ss, \vhicf::lcycr 01.::~u:rred firi>L lt} th;.: cxt(:.1ir prnvidtd 11\ J l C. S.C. § 507\a.)(4.J.
0      Cfl;n!r-ibutions t~ employee h~~n~i'h p·!;;n,;

    fVl<)!JL'.V   1.;W~d (\~   ·.-.!npk,\.t:C ilcn:;;fi1   p.hiJ~!>   f\,!J   .~<,;t 1,·i.:..;...::-;   t°(:'.jl'.Jcft:Li   n'ilf!i~l j 30 d~)'S i1nn1ediari:Jy lJNCt'dlng th<: f1J.:!1Q. t)f· t!JC Oftglii~d p-;..'tltiOtL ()f \!\l:
C~:i~i.Ui~n of tw~iH~~s. \rhh:h-:ver (~CJ;i.:ff"ed nrsL lo 1.hc extent provided in l .! U.S. C.                                                        s507(i!.)(5 ).
        11-52905-cag Doc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 8 of 15

    In re CROFT,B.~R~A~D'-L=E~Y'-'''-"l~"------­                                                                  C'asO?- No. _____________
                                      Ochtor                                                                                                (ij"knor.,1'ij

0    Certajn farmers -=tnd fishtr1nen

  {]ain1~     of Certain fam1crs and fishcsrrttt:~n. up-kl $5, 775* ~r"fittmcr or fish.:nnan, a.gainsl th~.dcbto.r~ as provit.fod in } I U.S.C. § 501(~)(6).

0    Deposit$ by in:dt\·iduals

  Claims of !ndivitiuaf~ up to $2~600~ fOr depo::.:ils iiJr th..: jJllrchase. .l~sse,.t.ir                    rental   (1f   property vr .scrvicts tbr pcr::;onat fa;nily, o:· bous~h0ki w-=i.:-.
thal 'Nen: 1101 d('Jivi'.'n::d or provfUW. 1 J U.S.C. S 507UL)(7}.

0    Taxes and        c:ert~in 0th.er. Debts ()n1~d tn Go\.·ernmenfri.l                 Unitl:

  Taxes, cus1on1s-dutlcs, and penaaies O\.\'ing to fc-dcraL .<:;t""Jte, and local gov..:-rn1rrc11ta! unils as sCt f   :fwreqfii•r li'ilh re:-::pect r.o 1...'ases·cnmr1u'1u.·ed on e;·r af!f.rr tht: dr.tte aj·
a<(ius(trl.f'ni

                                                                                       c{,11tin11ati.on shctts ;tltci.chef thc:. p...:-tition. 'l1;_c ci:in1pJi:l~ ;:u.x;t.n:ut nuinho..:1· of ~illy accounr rlli.3 11el)lur tws vrith the crcdfrnt is
w;eii.1i to the tr:.1~1:ee aud the creditor and 1nay be proviC~rl if the dehto; choo.ses to do so. !f 11 n2i11or child is.a l..'.:redi'ior, ~!~le th\:. child's initia3s and \be na1nc and
nddri::ss oftht: child':\ parer11: Or-guardifm, such as "...\.B .. ~ 1ninor.chUd. b.Y io}1n Dot~ gua.rdian.'1 l)o not d:is<:1osc-thc <:hild',s name:. Sec, l l U.S.C. ~ l 12 und F\:d.
R. Bankr. P. J OO?(n1). Do m.1"! lne-ludt>. tlc.im~~ lisre.d. ln Sd1edu!~s D ~•nd E. If ail cn.."(l_ilors will nol fit on this p. m1securOO cJauns to re.oorr on this Sch~ dnIc,.
        0 Ch                                                                                                          "
                                                                             t!]
          CRPDfTOR'S NAME,                                                   ~
                                                                             ~     o: r
                                                                                         >               DA TE CLAIM WAS                                           0                        AMOlJNTO!'
                                                                                                                                                        r
           MAILING ADDRESS
         INCLLiD!NG 7.!P CODE,                                    "'rc       ;r'"~o ~
                                                                             c
                                                                             ;z
                                                                                 .:....:·;.::i
                                                                                   z     ~
                                                                                                          lNCUR1UoD AND
                                                                                                       CONSIDERATION FOR
                                                                                                                                                        z
                                                                                                                                                        CD
                                                                                                                                                        \:)
                                                                                                                                                                   f:
                                                                                                                                                                   «:
                                                                                                                                                                   Cl
                                                                                                                                                                                 8.
                                                                                                                                                                                 f::
                                                                                                                                                                                              CLAIM

        AND ACCOUNT NUMBER                                        "'
                                                                  '1.)       <-.;::;
                                                                             co 0        ""'=.
                                                                                                              CLAIM.                                    z          s
              ~S°t'•'   trr:strr1t.:fion.> at~·1v,o.:             Q
                                                                  0          ~....,      9.           JF CLA[M IS SlJBJECTTO
                                                                                                                                                        "'u z~
                                                                                                                                                        ?l:
                                                                                                                                                                                 <>::
                                                                                                                                                                                 :!!
I                                                                 r_;
                                                                                                 I
                                                                             ~           ~

                                                                             :t:                         SETOFF, 80 STATE.                              ~
                                                                                                                                                                                 Cl

    ACCOUNT T>:(.J.            4006
                                                                                                                                                                   :.:.i
                                                                                                                                                                                                   ----·I
                                                                                                      CREDIT CARD DEBT
                                                                                                                                                              I                         I
I AMERICAN   EXPRESS                                                                H                                                                  x                                I
                                                                                                                                                                                               50.000.00
  p_Q. BOX 650440                                                                                                                                                                                          ,
    DALLAS, TX
                                                                                                                                                                            !'          I
    ACCOUNT KO.

    CHASE BANK
                              54 19

                                                                         I         H
                                                                                                      CREDIT CARD DEBT

                                                                                                                                                       x                   I
                                                                                                                                                                            l

                                                                                                                                                                                                    j
                                                                                                                                                                                               40,000.00   I
    P .0. BOX 94014
    P.~LANTiNE. JL 60094
                                                                         I                                                                                                                                 l

    ,..\C('OUNf NO.             6402                                                                  CREDIT CARD DEBT

                                                                                                                                                              I
!
    BANK OF AMERICA
    P,0 BOX 851001
    DALLAS, TX 75285
 ;\CCOUNT NO.                   5086
                                                              I
                                                                         I

                                                                         I
                                                                                   H

                                                                                                 II
                                                                                                 !
                                                                                                                                                   i
                                                                                                                                                   I
                                                                                                                                                   1
                                                                                                                                                       x
                                                                                                                                                              ,._l_ _
                                                                                                                                                              I
                                                                                                                                                              I
                                                                                                                                                                                               25.000,00'

                                                                                                                                                                                                           Ii
                                                                                                                                                                                                           ,
    dA CARD SERv ICEti
    ~

    r.o. oox 10222
                  ...
    S.4N Af'JTONIO, TX 73247
                                                ~

                                                             II          l
                                                                         I
                                                                                                 I CRED!T Cf.-..RO DEBT
                                                                                                                                                   ! I
                                                                                                                                                   I
                                                                                                                                                       x
                                                                                                                                                              I
                                                                                                                                                                           l'                  25,000.DO t
                                                                                                                                                                                                           I

                                                                                                                                                                    SubtctiJ>                 140.000.00   I
                                                                                                                                                                           T('tl.!>
                                                                                                              t'Uilt' unly (•n !......;;r p3ge of th~ ~·omplei~ ):c.111..-duk: F.)
                                                                                   O<:i:;rr.n ~is<: cii S.1mlmary or;.:dM~dulc~.. ~J1d. i! i;ppficehJe, nn th::: Siati~;liot!
                                                                                       ·                         :}LlJr>!WlrJ< vrcen.;it11l:fabilt.K:?.1mo J~d-~.~ect D~M.>
                                                                                                                                                                                                           I
 BoH(>tlrci!,k,~9.!?-z,\;ff9o,goc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 10 of
                                                                                                  15

 In     r~    _J::_ROFT, BRADLEY, L
                                                                                                                 Case N o . - - - - - - - - - - -
                                           Debtor                                                                                       (if known)

               SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRJORITY CLAlJ\lS
                                                                                          (Conlinuation Sheet)

              CREDITOR'S NMvlF.,                                                         DATE CLAIM WAS             r-     Cl               AMDUNTOF
                                                                                                                     z              c
               JvlAfLING A DD RESS
         !NCUJDING ZIP CODE,
                                                                                          fNCURRED AND
                                                                                        CONSIDERAlfON FOR         l 0"' UNT NO.
                                                                                       LEGAL FEES
      MYST! MURPHY
      5625 BROADWAY, #2
      SAN ANTONIO, TX
                                                                               H
                                                                                   I                                            x       I       10,000.00

      ACCOlrl'tf NO.                                                                   CLAIMS
                                                                                   !
      BARBARA LOWRY
      1600 NE LOOP 410, #202
      SAN ANTONIO, TX 78209
                                                                      !        H
                                                                                   !                                            x             i00,000.00

      ACCOU~f       NO.                                                                LEGAL FEES
      CHARLES GORHAM
      1250 NE LOOP 410,#830
                                                                      !        H                                                               10.000.00    II
      SAN ANTONIO, TX 78209
  -Ac-_C_'C_>1-!N_T_N-'0--------1,f---~._..----1f-LE_G_A_L_F_E_E_S________ ··--,
1-_

      JONA THAN YEDOR                                                 l        H                                                x               5.000_00
      100 NE LOOP 4-iG, #1075
      SANANTONIO, TX 78209                                            l
      ACCf.Jl.r}.'T NO.                                                            I LEGAi l=EES
      CHARLES RILEY                                                                                                 x
                                                                                                                                I
                                                                                                                                               15,000.00
      320 LEX!NGTON AVE
      SAN ANTONIO, TX 78215

      ~hect   no.         of        ..   :;on~inillitin11   shccrs Cittachtd
  lo S.:.hedt;k t)fCrcd~t~;.; Holding i.\nsccur.co
  N,~>10prk\rity C!:1.i.t1.r:-;
n 6 r,omc.lkJ?.~~91tm~JJ:,.m~oc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 11 of
                                                       15

Jn re CROFT, BRADLEY, L.
                                                                                                                                     Case N o . - - - - -
                                   Debtor --------~                                                                                                                        (if known)

          SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORJTY CLAIMS
                                                                                            (Continuaiion Shcc-t}

                                                                ~
      CREDITOR ·s NAME.
       MAILING ADDRESS
                                                      ""
                                                      f'?
                                                                ~-
                                                                 .v
                                                                     S'i   E
                                                                           ~
                                                                                           DATC CLAIM
                                                                                          INCURRED AND
                                                                                                                      wAS
                                                                                                                                            :fj
                                                                                                                                                        ~
                                                                                                                                                        ;-
                                                                                                                                                                                       AMOUNT OF
                                                                                                                                                                                         CLAIM
     INCLUD ING ZIP CODE,                             ro
                                                      w            2;: ~::;:
                                                               :z0 C.:                 CONS_ !DE_RAT!_ON FOR                                2;
                                                                                                                                            '"          <
                                                                                                                                                        8
    AND ACCOUNT NUMBER                                O         <0         ::;:              CLAIM.                                         t;          ;::o
           1&emstruct1om>t1bu"tl                      0        ~.....,               IF CLAb\1 IS SLlBJE.(;f'f()                            ,,.~        Q'
I
                                                                           r"'.
                                                      '-'                  u                                                                R

                                                       1~ -
                                                               ~
                                                               ;:                       SETOFF. SO STA TR.                                  -~          g
~=~~ ,;o;                         - -·            I                                 CRCm CARO                    ~;,. ,_x·--l--~--l--+---2--0::-0.-00
                                                                                                                                __

 P O. BOX 182564
 COLOMB US, OH 43218

 ACCOL"NTNO           7218                                                          CREDIT CARD DEBT
 HSABANK                                                             c                                                                      x                                            25.000   00
 605 N. 8TH ST., SUITE 320
 SHEBOYGAN, WI 53081

 -.\Ct::OUNT NO.      0893                                                         REVOLVING
 SEARS
 P.O. BOX 183081
                                                                     c                                                                      x                                             3,000.00     !
                                                                                                                                                                                                       '
                                                                                                                                                                                                       I

                                                                                                                                                                                                       I
 DAViD MCLANE                                                        H                                                                      x                                             8,000.00
 1924 N. M.l\IN ST.
 SAN ANTONIO, TX 78212

 ACCOUNT NO.                                                                       SPOUSAL SUPPORT

 CHERIE JEFFCOAT                                                     H                                                                                            x                       6,000.00
 5625 BROADWAY, #2
I SAN ANTONIO, Tl< 70209
 S11c~~t ni:t ·------ {!( ____ c-;:mti.nuntion sheets.: ;.n:.ached
                                                                                                                                                         Snomml>           l_S------1
                                                                                                                                                                           ~  62,000.00 I

                                                                                                 IU~    or1iy on last page .)fth      I      i>
                                                                     i ~port ahli 1::;ble- 1Jn _1he Si:.1i:i~o_<:-:d   t
                                                                                                    $iJmmary nfC~rtain Lia.hi!itie~ and Relat~d 1.>lita.i                  l-.1----~-'
I'6fi/}fficJk~~R~.s:ff!b,Q_oc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 12 of
                                                                                                             15
lnre ______
                                                                                                                                             Case-No.---·------------~-
                                    Debtor                                                                                                               (ifkMwn)

         SCHEDULE F - CREDITORS HOLDING UNSECURED NONPRIORITY CLAIM:S
                                                                                              (Contiot1~ui.un          Sheet)

r      CRCOITOR"·S NAM£,
     Ml\ILING ADDRESS
    INCLUDING ZIP COIJE,
   AND ACCOUNT NUMBER
           

                                                                      (Rf:rin•! ,d..;e 1 1111 ~H~i·n~;:.-- .;:-,fSelv~drJ,,..~ 11nd. :r :1.p~li!..'~01.,, 011 th:,, l::t:ltisti.:;il
                                                                                                                                                                                        Ii   $
                                                                                                                                                                                                   58, ,00 0.00
                                                                                                                                                                                                     7
                                                                                                                                                                                                                  I
                                                                                                                                                                                                                  l
                                                                                                         S1!r!E.'"11'vJ ofCe11ai1~ L\ahi!ilie1' ,'rnd Related D;:..t.:..) ,_1                ------J
11-52905-cag Doc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 13 of
                                        15

                 IN THE UNITED STATES BANKRUPTCY COUKf
                    FOR THE WESTERN DISTRfCT OF TEXAS
                           SAN ANTONIO DIVISION

 JN RE: CROF"I', BRADLEY L
                                                 CASE NO.
             Debtor

                      VERIFICATION OF CREDITOR MATRIX

        The above named Debtor hereby verify that the attached list of creditors
 is true and correct to the best of his knowledge and that it cooresponds to the
 creditors listed in my schedules.

 Dated: August 23, 2011
11-52905-cag Doc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 14 of
                                        15

 Chase Bank
 P.O. Box 04014
 Palantine, IL 60094

 Security Service FCU
 1621 i La C;mtern Pky
 Sau Antonio, TX 78256

 First Mark
 P.O. Box 701650
 San Antonio, TX 78270

 Mysti Murphy
 5625 Broadway #2
 Sai1 Antqnio, TX 78209

 Barbara Lo\v1)'
 1600 NE Loop 410
 San Antonio, TX 78209

 Ci!iBank
 P.O. Box 182564
 Colombus, OH 43218

 Sears
 P.O. Box 183081
 Colornbus, OH 43218

 Cherie Jeffcoat
 c/o Mysti Murphy
 5625 Broadway,#2
 San Antonio. TX 78209

 American Express
 P.O. Box 65044ll
 Dallas, TX 75285

 Chase Ba.'1k
 P.O. Box 94014
 Palantine, lL 60094

 Bank of _i.\;n_erlca
 P.O. Box 851001
  Dallas, TX 75285
11-52905-cag Doc#2 Filed 08/23/11 Entered 08/24/1115:26:16 Main Document Pg 15 of
                                        15

  US Bank
  P.O. Rox 790179
  SL Luuis, MO 63179

  Charles B. Gorham
  1250 NE Loop 410, Suite 830
  San Antoniu, TX 78209

 Jonathan Yedor
 100 N.E. Loop 410. Suite 1075
 San Antonio, TX 78216

 John Cave
 :ioo Convent #1080
 San Antonio, TX 78205
EXHIBIT 4
                                                                 1

 1               IN THE UNITED STATES BANKRUPTCY COURT

 2                 FOR THE WESTERN DISTRICT OF TEXAS

 3                        SAN ANTONIO DIVISION

 4
     IN RE:                          * Case No. 14-50980-cag
 5                                   *
     BURTON M.    KAHN,              *
 6                                   *
          Debtor.                    * October 15, 2014
 7

 8

 9   ----------------------------------------------------

10            BEFORE THE HONORABLE CRAIG A.      GARGOTTA

11                         BANKRUPTCY JUDGE

12   ----------------------------------------------------

13

14   #59 - Trustee's Motion to Sell All Non-Exempt Assets,
     Claims and Causes of Action.
15
                              **********
16

17

18

19

20

21

22

23
                                                   ORIGINAL
24   Proceedings recorded by electronic sound recording,
     transcript produced by transcription service.
25

      FEDERAL COURT REPORTERS OF SAN ANTONIO         (210)   340-6464
                                                                    2

        1                  A P P E A R A N C E S

        2

        3   HAYNES and BOONE, LLP
            By:  Ms. Lisa S. Barkley
        4   112 East Pecan Street, Suite 1200
            San Antonio, Texas  78205
        5   Appearing for Helvetia Asset Recovery,    Inc.;

        6

        7   PRO SE DEBTOR
            By:  Mr. Burton Kahn
        8   1706 Alpine Circle
            San Antonio, Texas   78248
        9   Appearing pro se as the Debtor;

       10

       11   HAYNES and BOONE
            By:  Mr. Werner A. Powers
       12   2323 Victory Avenue, Suite 700
            Dallas, Texas  75219
 __
". /
       13   Appearing for Helvetia Asset Recovery,    Inc.;

       14

       15   CHAPTER 7 TRUSTEE
            By:  Mr. Johnny Thomas
       16   St. Paul square
            1153 E. Commerce
       17   San Antonio, Texas  78205
            Appearing as the Chapter 7 Trustee.
       18

       19

       20

       21

       22

       23

       24

       25

             FEDERAL COURT REPORTERS OF SAN ANTONIO     (210)   340-6464
                                                                   3

 1                          INDEX

 2

 3   WITNESSES          Direct      Cross   Redirect     Recross

 4   Gary Mowrey            83

 5

 6   EXHIBITS:                                 Offered      Received

 7   (No exhibits offered in this hearing.)

 8

 9   RULING OF THE COURT:                                              91

10
                            ************
11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

      FEDERAL COURT REPORTERS OF SAN ANTONIO       (210)    340-6464
                                                                                     4

''-__..-'    1                THE COURT:       We have one 9:00 o'clock matter

             2   on our docket this morning.          This is on Page 1.        Case

             3   Number 14-50980,      Burton M.    Kahn.     This is on ECF

             4   Number 59,     the Trustee's Motion to Sell All Nonexempt

             5   Assets,    Claims and Causes of Action.

             6         May I please have announcements.

             7                MR.   POWERS:     Your Honor,    Werner Powers and

             8   Ms.   Lisa Barkley for Helvetia,       which is -- who is the

             9   purchaser.

            10                MR.   KAHN:     Burton Kahn,    who's the Debtor,

            11   your Honor.

            12                THE COURT:       Thank you.

            13          We are missing the Trustee.

            14          Did you see Mr.       Thomas this morning?

            15                MR.   POWERS:     We did not, your Honor.

            16                THE COURT:      All right.      We obviously can't

            17   proceed on this without the Trustee being here,               so.

            18                MR.   POWERS:     Should we go call him real

            19   quickly, your Honor?

            20                THE COURT:       We'll take care of that.        We'll

            21   find out.     And I ' l l ask my law clerk in --

            22                 (Sotto voce exchange.)

            23                THE COURT:       I'm sorry for the delay,      but

            24   we have to have him here.

            25          I   assume -- I've read the moving papers.           You

                  FEDERAL COURT REPORTERS OF SAN ANTONIO             (210)   340-6464
                                                                                          5

         1   contest the motion to sell;               is that correct,          Mr.    Kahn?

         2                   MR.   KAHN:     Correct,       your Honor.

         3                   THE COURT:       All right.           And I certainly want
         4   to hear

         5           And you all support the motion to sell.

         6           So,   very good.        I do have a 9:30 matter.              Once we

         7   get Mr.       Thomas here,      we'll proceed,          ladies and

         8   gentlemen.        But,   obviously,       I    can't go forward until

         9   Mr.   Thomas gets here.           So,    we'll find out where he is.

        10           Are there any witnesses,               or anything like that,

        11   or is it just argument?

        12                   MR.   KAHN:     Yes,    Your Honor,       there's one

        13   witness.

        14                   THE COURT:       Who would that be,          Mr.    Kahn?

        15                   MR.   KAHN:     That would be Mr.          Mowrey.        He's

        16   an appraiser,         and he made the -- the appraisal of the

        17   Joabert property.

        18                   THE COURT:       Okay.        Were you all aware that

        19   Mr. Mowrey was going to be called as a witness?

        20                   MR.   POWERS:     We -- We sort of suspected he

        21   might,    your Honor,         but we don't think that he has

        22   test-    --
        23                   MR.   KAHN:     Your Honor,       I    sent them a copy of

        24   the -- the subpoena that I               served Mr.       Mowrey.

        25                   THE COURT:       Okay.        We'll take that up.
'---/

              FEDERAL COURT REPORTERS OF SAN ANTONIO                      (210)    340-6464
                                                                                        6

           1   Because I      need to have Mr.          Thomas here.       He needs to

           2   be a participant in this discussion.                  So,   we're going

           3   to       I apologize,         but we -- we've got to have him

           4   here,    so ...       Maybe he was delayed in traffic,              maybe

           5   he got his times ...            But he's very punctual.             This is

           6   highly unusual for him.

           7           So,   if you don't mind,          please,   what I'm going to

           8   do is step away,         and then we'll start as soon as he

           9   gets here.        All right?

          10                  MR.    POWERS:     Very good,    Judge.

          11                  THE COURT:        So,   if you'll -- you'll just

          12   stand down for a minute.

'-____/
          13           Do you have exhibits to present?

          14                  MR.    KAHN:     Yes,   your Honor.

          15                  THE COURT:        Okay.     And do you have exhibits

          16   to present?

          17                  MR.    POWERS:     We have impeachment exhibits,

          18   your Honor.

          19                  THE COURT:        All right.

          20                  MR.    POWERS:     And if he         And if he's

          21   allowed to put this witness on,               I'm sure we will call,

          22   as an adverse witness,            the Debtor.

          23                  THE COURT:        All right.     Well,    we•ll deal

          24   with that when Mr.            Thomas gets here.

          25           Mr.   Kahn,    do you have the -- do you have copies

                FEDERAL COURT REPORTERS OF SAN ANTONIO                     (210)    340-6464
                                                                               7

 1   of your exhibits for the Court and also for opposing

 2   counsel?

 3                  MR.   KAHN:     Yes.

 4                   THE COURT:      All right.       Very --

 5           Ah.     There's Mr.     Thomas.

 6                  MR.   THOMAS:     I'm sorry,      Judge.     It was a bad

 7   morning.

 8                   THE COURT:      Mr.    Thomas,   do you need just a

 9   minute,       and then we can start?           Would that help you?

10                  MR.   THOMAS:     That'll be fine,         Judge.

11                   THE COURT:      All right.       So I ' l l --

12   Mr.   Thomas is here.          And I ' l l -- I ' l l come out in,

13   like,    five minutes.         I do have a 9:30 matter.            I'll

14   probably ask the parties how long that's going to

15   take,    because this,       I think,       is going to take longer,

16   if I'm just going to make an educated guess.

17           Mr. Ayers,     good morning.

18                  MR. AYERS:       Your Honor,      we think about 20

19   minutes.        I mean,   it's very straightforward.

20                   (Another matter taken up briefly.)

21                   THE COURT:      So,    you think about 20 minutes.

22           I assume that your matter may take a little bit

23   longer;       is that correct,        Mr.   Thomas?

24                  MR.   THOMAS:     I think so,      Judge.

25                   THE COURT:      All right.       Let me step away.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                    (210)   340-6464
                                                                               8

 1   If you all want to talk for a minute,                  get situated,

 2   and then we'll start the matter.                  I might -- To be

 3   fair to you all -- or,            I'm sorry,      I might break to

 4   take up the other matter.                All right?

 5                  MR.    POWERS:     Yes,    sir.

 6                  THE COURT:        So,    just to let you know.

 7           All right,      ladies and gentlemen.           We'll take a

 8   five-minute recess.             Okay?     Thank you.

 9                  COURTROOM DEPUTY:           All rise.

10                  (Recess.)

11                  THE COURT:        Mr.    Thomas,   could you -- could

12   you come to the podium,            please?

13                  MR.    THOMAS:     Good morning,       Judge.

14                  THE COURT:        Good morning.        This is on your

15   motion to sell.          We have two interested parties.                 We

16   have the Debtor,         Mr.    Kahn,    and also we have -- Is it

17   Helvetia,      is how you pronounce it?

18                  MR.   THOMAS:      Yes,    your Honor.

19                  THE COURT:        And they're the purchaser of

20   the -- of the cause of action,               and,    I ' l l just say,

21   generically,         the nonexempt assets,          claims --

22                  MR.    THOMAS:     That's correct,       Judge.

23                  THE COURT:        -- and causes of action.

24           I   think this is going to take a little bit of

25   time.       Were you aware of that?

      FEDERAL COURT REPORTERS OF SAN ANTONIO                    (210)   340-6464
                                                                                              9

,'--._./,
             1               MR.    THOMAS:        Yes,    sir.     I    had seen the

             2   exhibits,   and the objections,              of course.

             3               THE COURT:        I would             We could go for about

             4   two minutes,      then I'd have              I'd call the 9:30

             5   matter.     I don't think the 9:30 matter,                     as Mr. Ayers

             6   has described on the record,               is going to take more

             7   than 20 minutes.       So, what I'd like to do -- Do you

             8   have

             9          Does anyone have other engagements later on this

            10   morning?    Because I would take you all next.

            11               MR.    POWERS:        No,    your Honor.

            12               THE COURT:        Mr.

            13               MR.    KAHN:     Your Honor,          I do have a witness

            14   that is an expert witness,               and -- and I          have to pay

            15   him,   you know,    his fee,       which is kind of blood money

            16   at this particular time,            so ...       And this delay is

            17   costing me money.

            18               THE COURT:        I understand that,                sir.

            19               MR.    KAHN:     If I       -- If -- If             If I    could,

            20   in our few minutes,        just put him on.                  The only thing

            21   he's going to do is submit this -- this appraisal,                           and

            22   that he made the appraisal,               and just a question,             "Did

            23   you make it," et cetera,            and that's it.

            24               THE COURT:        I    -- Mr.    Kahn,       I    certainly

,___,,      25   appreciate,    from your perspective,                  it may take a

                  FEDERAL COURT REPORTERS OF SAN ANTONIO                         (210)    340-6464
                                                                                       10

           1   couple of minutes,             but based upon my years of both

           2   being a lawyer and a judge,              I   suspect it will take

           3   longer.        So,    while I am sympathetic to the cost

           4   involved,       the fact we're in court,            there's an inherent

           5   cost to it.           I'm going to ask -- ask you to stand

           6   down.

           7           Mr.    Thomas,    I ' l l come back to your matter in just

           8   a minute.        I'm going to deal with the Valence

           9                   MR.    THOMAS:     That would be fine.

          10                   THE COURT:           matter.

          11           So,    if you all want to step out for a minute, you

          12   may do so.           You can leave your stuff here.

,_____,   13           But,    Mr.    Kahn,   you're just going to have to wait,

          14   so       Certainly,       I am sensitive to that,         but I don't

          15   think this matter is going to take,                  necessarily,     all

          16   that long.

          17                   MR.    POWERS:     Thank you,     your Honor.       We'll

          18   be outside.

          19                   MR. KAHN:        (Inaudible;      too far from

          20   microphone.)

          21                   THE COURT:       Well,   I've excused the -- Go to

          22   the podium,          please.     What's your question,        Mr.   Kahn?

          23                   MR.    KAHN:     I did not submit -- bring with me

          24   five copies of the appraisal,                I   had three,   so that I'm

          25   going to -- in this time period I'm going to run over
'--._/

                FEDERAL COURT REPORTERS OF SAN ANTONIO                   (210)     340-6464
                                                                                             11

                 1   to the Clerk's office and get a couple of -- of

                 2   exhibits that I want to put in,             then I will have five.

                 3           But the appraisal is -- was -- was submitted in

                 4   the -- in the filing of my motion -- my objection.

                 5           Also,    I    have a chart that was also filed in the

                 6   objection,       and which I have a large scale of it,             so

                 7   that you could easily see it.             And I don't have five

                 8   copies of that.

                 9                   THE COURT:     I ' l l take that up when we come

                10   back.     The local rules are pretty clear on the

                11   requirements in terms of number of exhibits,                 why we

                12   need the number of exhibits for purposes of conducting

\   ....___./   13   the hearing.          While I'm sympathetic to your situation,

                14   as a pro se debtor, you're not excused in those

                15   requirements.

                16                   MR.    KAHN:   I'm not asking --      It -- The

                17   one thing that I'm going to do,             if I    ever get this

                18   this -- this whole situation squared away,                 is I am

                19   going to go to law school,             and not be a -- and -- and

                20   not go to -- I          should have gone to law school,          instead

                21   of engineering school.            But,   anyway,    I will do that

                22   when I    -- when this is over.

                23           Thank you,       your Honor.

                24                   THE COURT:     All right.     So,    I ' l l come back

                25   to the matter,          and we'll -- we'll deal with all of

                      FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)   340-6464
                                                                                 12

      1   that.

      2                 (Sotto voce exchange.)

      3                 (Other matter taken up.)

      4                 THE COURT:       I'm going to take,       like,    a

      5   three-minute recess,          and then we're going to start,

      6   Mr.   Kahn.

      7                 MR.   KAHN:     Thank you,    your Honor.

      8                 THE COURT:       Thank you,    sir.

      9           All right.     So,    just a very short recess,          and

     10   then we'll begin with the Kahn matter.

     11                 COURTROOM DEPUTY:        All rise.

     12                 (Recess.)

     13                 THE COURT:       All right,   Mr.     Thomas.     This is

     14   your motion.        We're going to start with you first,

     15   then I ' l l hear from the other interested parties.

     16                 MR.   THOMAS:     Mr.   Johnny Thomas,     Trustee and

     17   Movant.

     18           This is an application to sell the nonexempt

     19   property of the estate.           It mainly involves some

     20   shares in Helvetia,          a thousand shares;       a hundred

     21   shares in another corporation called Joabert;                   and,

     22   then,    numerous lawsuits that he -- that Mr.                Kahn,

     23   the Debtor,     claims are valued at $1,470,940.

     24                 THE COURT:       A million or a hundred million?

     25                 MR.   THOMAS:     One million.
'~

           FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)    340-6464
                                                                          13

 1                THE COURT:      Okay.

 2                MR.   THOMAS:    And the -- the shares,          he's

 3   valued at 3,734,309.

 4                THE COURT:      So,    may we break it down,

 5   just -- I know I asked you to go through a recitation,

 6   but help me out.       So,   we -- You want to sell a hundred

 7   shares of stock in Helvetia?

 8                MR.   THOMAS:    Yes -- Oh, Helvetia,       1,000

 9   shares.

10                THE COURT:      One thousand.        Then a hundred

11   shares in what?

12                MR.   THOMAS:    Joabert,       J-0-A-B-E-R-T.

13                THE COURT:      Do you know what Joabert is?

14                MR.   THOMAS:    Where it is?

15                THE COURT:      No,    what it is,    what kind of

16   entity it is.

17                MR.   THOMAS:    Oh,    these are development

18   companies.     They - -

19                THE COURT:      Development companies?

20                MR.   THOMAS:    Yes,    sir.

21                THE COURT:      All right.        Then you said some

22   causes of action,      the rest are causes of action?

23                MR.   THOMAS:    Yes,    sir.     Item 21 on Schedule B

24   outlines those lawsuits involving

25                THE COURT:      How many are there,       please?

      FEDERAL COURT REPORTERS OF SAN ANTONIO               (210)    340-6464
                                                                                    14

'-.__./    1                MR.    THOMAS:     Seven.

           2                THE COURT:       All right.     Can we -- Just for

           3   purposes of the record,          and I appreciate you -- you

           4   trying to get to the point,           but let's break these

           5   down.     Go -- Go through them one-by-one so I             have a

           6   record of what -- what these causes of action are.

           7                MR. THOMAS:       Yes,   sir.   There's one lawsuit

           8   against Haynes and Boone,

           9                THE COURT:       Okay.

          10                MR.    THOMAS:     -- 1,400,000.

          11           There's a lawsuit against the City of San Antonio

          12   for 70,000.

          13           There's a lawsuit against -- Burton Kahn versus

          14   Helvetia.     He doesn't value that lawsuit.

          15                THE COURT:       Okay.

          16                MR.    THOMAS:    There's another lawsuit.         If I

          17   can give you the case number,            Judge:   The last four

          18   digits 0014,       Burton Kahn versus Helvetia;       the last

          19   four 0258,    Burton Kahn versus Helvetia;          0319,    Burton

          20   Kahn versus Helvetia;

          21           These are all state court cases.           I'm sorry.

          22   These are all,       yeah,    state court cases that are now on

          23   appeal.

          24              0357,    Burton Kahn versus Helvetia.

          25           The cases now still in district court,          2013

                FEDERAL COURT REPORTERS OF SAN ANTONIO              (210)    340-6464
                                                                                 15

~-      1   cases:     Last four 8355,      Helvetia Recovery versus Kahn;

        2   and then,    2013,   8394,    Helvetia Recovery.

        3        Those are the lawsuits,            as I understand them,

        4   Judge.

        5                THE COURT:       Very -- If I may interrupt you

        6   again,   because I'm trying to get some context.

        7        Have -- You mentioned appeals.                 Have there been a

        8   number of determinations on these causes of action?

        9                MR.   THOMAS:     Yes,    Judge.       I believe they

       10   were all against Mr.         Kahn,    but he appealed them.

       11                THE COURT:       Okay.     So,    we -- For purposes of

       12   the record,    on the causes of action,             even though it

       13   appears that Mr.      Kahn was the plaintiff in all of

       14   these,   there was a determination at the trial level in

       15   favor of the         collectively,          of the defendants,

       16        You'll get your turn,            Mr.   Kahn.

       17               and those matters are up on appeal;              is that

       18   correct?

       19                MR.   THOMAS:     That's my -- According to his

       20   schedules.

       21                THE COURT:       All right.

       22                MR.   THOMAS:     That's what he's indicated.

       23                THE COURT:       Okay.     So,    what other assets are

       24   you trying to sell?

       25                MR.   THOMAS:     Then there were some other
'._/

             FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)   340-6464
                                                                        16

 1   small businesses that            Some are operating and some

 2   are not.     In addition to Joabert and Helvetia,              there

 3   was something called Trail Construction Company;

 4   Puerto Verde,      Ltd.;    Key Largo Homeowners Association;

 5   Royal Crest Homeowners Association;             Contour

 6   Construction;      Ideal Travel Company;        Paradiv,

 7   P-A-R-A-D-I-V,      Corporation; and Terob,          T-E-R-0-B,

 8   Corporation.

 9        And some of these,         he says they're presently

10   operating,    some he says are not operating.              We're not

11   clear on all of them.          But we want to

12                THE COURT:      Does he ascribe a value to them?

13                MR.   THOMAS:     He did not,    to these

14   corporations,      Judge.

15                THE COURT:       Is there       Is it listed as

16   unknown,   or just no value listed?
17                MR.   THOMAS:     No bank account, unknown.           Some
18   are unknown and some say no bank account.

19                THE COURT:      All right.      Please continue.          Is

20   there -- Are there any other assets?

21                MR.   THOMAS:     These are the assets,        as I
22   understand them,      Judge.     And I   think these are the
23   assets that the buyer was mainly interested in
24   recovering,    your Honor.
25                THE COURT:      All right.      so ,   1 et me - - 1 et me

      FEDERAL COURT REPORTERS OF SAN ANTONIO                (210)   340-6464
                                                                            17

 1   just stop you right there.            And there's a reason why

 2   I'm going through this.

 3           So,   we have shares of stock in two entities.                we

 4   have,    I believe you indicated,        seven causes of action.

 5   Then we have these businesses that may or may not be

 6   operating.

 7           You've conducted -- Have you concluded the 341

 8   meeting?

 9                 MR.   THOMAS:    Yes,   Judge.    We --    I think

10   there were at least four resets.               The last one was

11   completed in July.

12           I did have an attorney assist me at the

13   beginning.       we made a determination that it'd be hard

14   to litigate all these lawsuits.            And we just -- I           just

15   didn't feel      -- or the attorney didn't feel it was

16   marketable.         It would take several thousands of
17   dollars to litigate the claims,           and so forth.         And

18   even the ownership interest,           it would take some --

19   some litigation to resolve the actual -- whether or

20   not he owns that interest.

21           The clearest might be that he owns one/third of

22   Joabert,      but then it doesn't appear that Joabert has
23   any equity.

24                 THE COURT:      Okay.

25                 MR.   THOMAS:    And so,   with that,      I

      FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)   340-6464
                                                                                18

 1   toward --     I guess in August,         after we concluded the

 2   341 meetings,       the       Helvetia offered $10,000 to buy

 3   all of these properties,

 4                 THE COURT:       When you say "properties,•

 5                 MR.   THOMAS:        which would amount --

 6                 THE COURT:       May I    -- May I     interrupt you

 7   again?      Everything?

 8                 MR.   THOMAS:     Everything.        Yes,   sir.

 9                 THE COURT:       Stock,    causes of action,

10   interest in whatever these -- these entities are.

11   Is that correct?

12                 MR.   THOMAS:     Yes,    sir.     That's correct.

13                 THE COURT:      All right.

14                 MR.   THOMAS:     And for about $10,000,             I    think

15   we would get somewhere between two and three percent

16   interest for the unsecured.

17                 THE COURT:       Okay.

18                 MR.   THOMAS:     And,    so,    i t ' s above one

19   percent.      If i t ' s above one percent and -- I've always

20   considered that incon-          -- more than inconsequential.

21   So,   I   think there's some value,            and something for

22   creditors,     as opposed to nothing.

23                 THE COURT:       In your capacity as the

24   Trustee -- And how long have you been a Panel Trustee?

25                 MR.   THOMAS:     Since    '96.     1996.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                   (210)        340-6464
                                                                         19

 1                THE COURT:       So,    you have -- And I genuinely

 2   mean this.     You have considerable experience in this

 3   regard.

 4                MR.    THOMAS:    Yes,    sir.

 5                THE COURT:       Obviously,       you conducted the

 6   341 meeting.        Did you -- Based upon -- As you

 7   understand the facts of this case,               and you've analyzed

 8   this case both for its own facts and based upon your

 9   experience as a trustee,            do you think -- I mean,       did

10   you think it was appropriate to market these assets,

11   or simply seek            I mean,    how did you go about the

12   $10,000 number with Helvetia?

13                MR.    THOMAS:    Judge,    I was in the process of
14   probably no-asseting the case,            or at least holding on

15   to see what would happen to the litigation as it was

16   proceeding.        And,   in the middle of that,       I was offered

17   the $10,000.        It was initially five,         but at least

18   ten       five would have -- $5,000 would have been less

19   than one percent,         which I didn't think would have --

20   have much value to the estate.                Ten thousand would get

21   at least -- get me to at least two or three thousand,

22   and that was the offer on the table.

23         And part of my concern was that something like

24   this sometimes needs to be brought to the attention of

25   the Court,    and that's what I wanted to do,            also.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                (210)   340-6464
                                                                                     20

            1               THE COURT:       No,    you did exactly right,

            2   because essentially--I mean,           let's be honest,      we're

            3   all adults here--they're buying peace.
            4               MR.    THOMAS:    That's correct.

            5               THE COURT:       If I       If I approve the sale to

            6   them,   it cuts off Mr.      Kahn's ability to pursue these
            7   cases as the Debtor.

            8               MR.    THOMAS:    That's correct.

            9               THE COURT:       I think you would agree with

           10   this statement.       First of all,      these are all

           11   prepetition causes of action,           so they enure to the

           12   Chapter 7 estate,      of which you're the Panel Trustee.

'-----"'
           13   Would you agree with that statement?

           14               MR.   THOMAS:     I agree.      And that's -- I think

           15   Mr.   Kahn agrees with that,        also.

           16               THE COURT:       All right.      From the

           17   perspective,      if you have a position,       does Mr.     Kahn,    as

           18   the Debtor,    have any standing to object to this based

           19   upon the fact that they're             You know,   a lot of times

           20   when we look at objections to claim,            the analogy where

           21   I'm going is,      is if a debtor wants to intervene in a

           22   trustee's claims objection,           one of the things I      have

           23   to evaluate is whether or not there's any -- there's

           24   going to be any return to the debtor.              If there isn't,

           25   the debtor doesn't have standing to object to the

                 FEDERAL COURT REPORTERS OF SAN ANTONIO              (210)    340-6464
                                                                                           21

           1   claim.

           2           Does Mr.   Kahn have any standing to object to the

           3   sale,    given that there's only going to be a,                    we'll

           4   say,    three percent distribution to unsecureds?

           5                MR.   THOMAS:    Judge,    if everything went

           6   right,    I don't think there'd be money back to Mr.                       Kahn.

           7   If most of -- You know,           if -- if even fifty percent,

           8   ten percent of the values come out right,                 I don't see

           9   any money going back to Mr.           Kahn.

          10                THE COURT:      All right.

          11                MR.   THOMAS:    And,    so,   I   certainly don't see

          12   $10,000 giving any benefit to Mr.               Kahn.

          13                THE COURT:      So,    let's
'---../

          14                MR.   THOMAS:    And,    so,   I   do question it.

          15                THE COURT:      So,   you agree with me that there

          16   may -- Is there or is there not a standing issue?

          17                MR.   THOMAS:    I    think there's a standing

          18   issue,    Judge.    If you look at his value,           he thinks

          19   that these have some equity down the road.                     I    just

          20   think i t ' s totally unreasonable.

          21                THE COURT:      All right.         So,   let's -- let's

          22   focus back on one other thing for a minute,                    and then

          23   I ' l l hear anything else you have to say,              is,       let's

          24   assume that you got no tender from Helvetia of any

,__./     25   monies,    you know,   the case proceeded along.                   How long

                FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)       340-6464
                                                                           22

 1   would you keep this case open,           given the

 2   administrative costs versus what might happen with

 3   regard to the lawsuits,        and the value of the business
 4   entities,    and the value of the shares?             What would you
 5   do?   would you -- Would you file a no-asset report?

 6                MR.   THOMAS:    Yes,    sir.   A lot of times,       when

 7   a lot of litigation is going on like this,               I would

 8   hold off on the no-asset report and at least let some

 9   of the cases resolve.         So,    hopefully,    within a year

10   I'd be able to let it -- go ahead and file the

11   no-asset case,      and the creditors would get nothing.

12                THE COURT:      All right.      So,   you would delay

13   closing the case to see what would unfold with regard

14   to these causes of action?

15                MR.   THOMAS:    That's correct,       Judge.

16                THE COURT:      All    right.   What else do you

17   wish to tell me?

18                MR.   THOMAS:    Judge,    that was the -- those

19   were all the issues I had in mind.             And,    also,   I would

20   add that the estate has no money to pursue a lot of

21   the litigation.

22                THE COURT:      Thank you.      That was the last
23   point.   Let's talk briefly about that.

24         Now,   what's your commission on a case like this?
25                MR.   THOMAS:    Twenty-five the first          5,000.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                (210)   340-6464
                                                                             23

 1   It's the standard statutory.            Twenty-five percent the

 2   first 5,000,      ten percent up to 45,000,           and three

 3   percent up to 100,000,        something like that.

 4               THE COURT:       So,    let's assume you didn't have

 5   an offer on the table for the $10,000--I'll come back

 6   to that--what would be your fee in this case?

 7               MR.   THOMAS:     Probably about 3,000.

 8               THE COURT:       $3,000 is all you get.             And

 9   there's no money on hand;           correct?

10               MR.   THOMAS:     There's no money on hand.               This

11   would be the -- Well,        but they did prepay the $10,000.

12   I did ask for them to do that.

13               THE COURT:       All right.        So,   you'll get --

14   you'll get a component of -- a portion of that,                   and

15   then the rest,      the balance of the proceeds will be

16   remitted to the benefit of the creditors; correct?
17               MR.   THOMAS:     That's correct.          That's

18   correct,   Judge.

19               THE COURT:       All right.        Do you -- Is there

20   anything else you wish to tell me?

21               MR.   THOMAS:     I    think that would be all I'd

22   have right now,     Judge.
23               THE COURT:       All right.        Mr.   Kahn,   I'm going
24   to hear from you last.            I want to hear from Helvetia,

25   because I think you're going to take the longest.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)   340-6464
                                                                                24

 1          All right.            Sir,   if you'll come to the podium.

 2   And,    again,    state your name for the record.

 3                MR.       POWERS:       Your Honor,      Werner Powers,      and

 4   Ms.    Barkely,    Haynes and Boone,            for Helvetia Asset

 5   Recovery,    Inc.

 6           By way of explanation of who we represent --

 7                THE COURT:             Yes,    please.

 8                MR.       POWERS:       Helvetia Asset Recovery,        Inc.,

 9   is by far and away the largest creditor of the estate.

10   Helvetia has two judgments against Mr.                    Kahn,   both

11   final,    one judgment by --

12           Let me get my notes here.

13                THE COURT:             Yeah.     Let's be -- Let's have an

14   accurate record,             because this will inform my ruling.

15                MR.       POWERS:       Judge,    one finding by        a

16   judgment for sanctions by Judge Tanner,                    a state court

17   judgment,    for approximately $253,000,                 where the court

18   found that Mr.          Kahn committed a fraud on the court,

19   and made false filings,               and claimed to be an owner of

20   Helvetia Asset Recovery,               Inc.,    when he was not,     in

21   order to cloud title to real estate that Helvetia

22   Asset Recovery,          Inc.,      owned here in Bexar County.
23                THE COURT:             Is that order final?

24                MR.       POWERS:       It is a final      judgment,

25   your Honor.        I    --    I      He has prosecuted an appeal

      FEDERAL COURT REPORTERS OF SAN ANTONIO                     (210)   340-6464
                                                                                           25

',______/    1   from it,    so that appeal,       I    think,       is pending.

             2                THE COURT:        okay.

             3                MR.    POWERS:     There's a question as to

             4   whether it will -- well,          as to whether he can appeal,

             5   given some orders of the appellate court,                     which I ' l l

             6   talk about in a minute.

             7           In addition to that,          there is a judgment for

             8   over $2 million,       a unanimous verdict returned against

             9   Mr.    Kahn in Judge Bery's       (sic)       court,    for breach of

            10   fiduciary duty --

            11                THE COURT:        Which Judge Biery --

            12                MR.    POWERS:     B-E-R- --

            13                MS.    BARKLEY:     Michael Mery.

            14                MR.    POWERS:     Michael Bery          (sic)      okay.

            15                THE COURT:        Okay.     I    thought you said Biery.

            16   That's why I       asked.

            17                MR.    POWERS:     oh,    no.     The state --

            18                THE COURT:        I'm thinking of -- So,             state

            19   court?

            20                MR.    POWERS:     Yes.

            21                THE COURT:        Michael Bery (sic).             Go ahead,

            22   sir.

            23                MR.    POWERS:     Yeah,    Bery (sic)           Michael -   -

            24                MS.    BARKLEY:     Mery,       M-E-

            25                MR.    POWERS:     B-E-R-
'-.__/

                  FEDERAL COURT REPORTERS OF SAN ANTONIO                       (210)   340-6464
                                                                                              26

          1                 MS.    BARKLEY:           M-E-R-Y.

          2                 MR.    POWERS:           Oh,    Mery.    I    said Bery.       Excuse

          3   me.   Mery.     And --

          4                 THE COURT:              Thank you.

          5                 MR.    POWERS:           Thank you.          And -- I tried the

          6   case for two weeks.               I    should know that.             But,   anyway.

          7          So,   it's about                approximately $2 million,

          8   findings of breach of fiduciary duty,                         embezzlement of

          9   funds belonging to Helvetia, punitive damages of about

         10   a million dollars,           as I       recall.       I think that judgment

         11   is,   in all things,         final.           Mr.

         12                 THE COURT:              No further appeals?

'---./
         13                 MR.    POWERS:           Well,    let me explain my

         14   position.      Mr.          Mr.       Kahn filed a notice of appeal.

         15   He then dismissed his appeal.                       Okay?     He now has filed

         16   a second appeal of that judgment -- not of the

         17   judgment,     but of an order that refused to grant him a

         18   new trial.

         19                 THE COURT:              Okay.

         20                 MR.    POWERS:           The appellate court recently

         21   issued an order,        I    think last week,               saying

         22   explaining why we should not dismiss this because you

         23   can't appeal that type of an order.                          The time to

         24   appeal the final        judgment's over.                   You only get one

         25   appeal.      He dismissed his appeal.                      I think it's final.

               FEDERAL COURT REPORTERS OF SAN ANTONIO                          (210)      340-6464
                                                                                    27

          1   But he -- he would probably disagree with me on that.

          2   But that's what the status is.              And I   think the court

          3   of appeals now has clearly indicated that it's having

          4   a hard time seeing why it has any jurisdiction over

          5   this.

          6           There -- I want to -- When the assets were being

          7   listed off,         just to be clear,   Mr.    Kahn put

          8   There's -- There's two companies,              two corporations

          9   that own real estate here in Bexar County.                One is

         10   Helvetia,       and they own a subdivision called Key Largo.

         11   The -- The other is Joabert,            which owns the Royal

         12   Crest Subdivision.

'.___/
         13                   THE COURT:      Royal Crest?

         14                   MR.   POWERS:    Royal Crest Subdivision.

         15                   THE COURT:      Go ahead.

         16                   MR.   POWERS:    As to Key Largo and -- and --

         17   and Helvetia,         Mr.   Kahn was fired as an officer,       and

         18   that was the subject of the judgment in Judge Mery•s

         19   court.        And      And what he did is,      he issued himself

         20   stock after he was fired.            He claims that he owned the

         21   company.        And then -- And that was the subject of the

         22   sanction order that was entered against him.
         23           So,    he -- he doesn't own any stock in Helvetia.

         24   That's not one of his assets.               The court's adjudicated
         25   that and that's over.

               FEDERAL COURT REPORTERS OF SAN ANTONIO                (210)   340-6464
                                                                  28

        As to the Joabert and the Royal Crest

Subdivision,       Mr.   Kahn claims to own a minority

one/third interest in the stock of that company.                 And

that's going to be important in a moment because the

appraisal that we're going to be --             if you want to

call it an appraisal,         doesn't even attempt to appraise

his minority interest in -- in Joabert.

             THE COURT:       And Joabert is a development

company that owns raw land that they're going to

develop for residential?

             MR.    POWERS:    Exactly.

             THE COURT:       All right.

             MR.    POWERS:    And -- And while your Honor

touched that point,         the -- the appraisal that is done

is rather unusual.          It purports to be an appraisal

that speaks to the future,         and it's -- it has a future

date.     And it assumes that,       somehow,    this land is all

finished-out and ready for sale and fully developed.

And it doesn't even purport to opine as to how much it

would cost to do that.

             THE COURT:       You'll get your shot,     Mr.    Kahn.

Just be patient.
             MR.    KAHN:     I can't object while he's saying

something?

             THE COURT:        I'm -- This is only just

 FEDERAL COURT REPORTERS OF SAN ANTONIO              (210)    340-6464
                                                                                         29

',._,        1   argument.     So,   you -- I ' l l          I ' l l hear what you have

             2   to say in just a minute.             This is not evidence at this

             3   point.     You're just telling me what your position is.

             4                MR.    POWERS:       Our position

             5                THE COURT:       And I understand you disagree

             6   with it.     Believe me,      I    recognize that.

             7        Go ahead,       sir.

             8                MR.    POWERS:       Anyway,    your Honor,   I don't

             9   think it's          I don't even think it sustains a Daubert

        10       challenge,    would -- would withstand a Daubert

        11       challenge,    because it's so speculative.

        12             But it's also irrelevant,              because he doesn't own

        13       any of the real estate.             He owns,    or purports to own,

        14       a minority interest in -- in stock in the -- in the

        15       company.     He has no rights to put the stock.                  He has

        16       no rights to,       you know,      require it be purchased.             It's

        17       just ...

        18            And       And his ownership of that stock is in

        19       real doubt.        He -- He was supposed to -- He -- He was

        20       supposed to earn that stock through sweat equity in

        21       doing engineering work on the project.                 He was fired

        22       because he was not -- allegedly incompetent.                     And,    so,

        23       there's real questions as to whether he ever performed
        24       the services to get that one/third minority interest.
        ;i   5         In addition to that -- And the appraisal -- or
-~,.

                  FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)    340-6464
                                                                                  30

         1    another reason the appraisal is just totally

         2    irrelevant,    there's approximately four --

          3   four-and-a-half million dollars of debt on the

          4   property.     The appraisal didn't even take into account

          5   the debt on the property.           And Mr.     As Mr.     Kahn

          6   knows,    his arrangement was never that he would get

          7   paid before the debt,         you know,   if that company were

          8   liquidated.        So,   that's our position on that.

          9         The lawsuits -- Your Honor is right.                Part of

         10   this is to buy peace.           I mean, we --

         11                THE COURT:        I mean,   let's be candid.

         12                MR.    POWERS:    We'll be candid.     That's what

,____,   13   it is.     I mean, we -- Every time we turn around,

         14   there's some new lawsuit that gets filed,             a

         15   speculative lawsuit.          You know,    they -- they -- they

         16   sue my law firm.          They file motions for sanctions.

         17   And whatever they want to do,            I gather -- he wants to

         18   do,   he just sits with his typewriter and does this.

         19         And it's expensive.          It's expensive to continue

         20   to keep coming down and having to argue these silly --

         21   these silly lawsuits.           And we want to just kind of buy

         22   peace and get rid of this.           And that's what the
         23   $10,000 is for,          because he doesn't have any assets.

         24         I   -- Again,       I can't emphasize enough,       the major

         25   creditor here is Helvetia.           I mean, we're the one --
 '-,

               FEDERAL COURT REPORTERS OF SAN ANTONIO             (210)     340-6464
                                                                                         31

          1   we're the ones who -- who stand to gain whatever
          2   assets there may be in this estate.
          3            I also want to point out one other thing,
          4   your Honor.         We filed a complaint with the Court to
          5   declare the judgments nondischargeable.                 And
          6                    THE COURT:    The judgments that you took
      7       against Mr.        Kahn?

      8                    MR.     POWERS:    Yes.
      9                    THE COURT:        Under what provisions of the
     10       Bankruptcy Code?

     11                    MS.    BARKLEY:     Your Honor,    Section 523 (a) (4)
     12       and   (a) (6).
     13                    THE COURT:        So,    breach of fiduciary duty --
     14                    MR.    POWERS:     Right.

     15                    THE COURT:              or defalcation,    and     (a) (6),
     16       malicious -- willful and malicious injury?

     17                    MR.    POWERS:     Yes.

     18                    THE COURT:        All right.     What's the status of

     19       that lawsuit?        Do you know, Ms.       Barkely?

     20                    MS. BARKLEY:        We are drafting a summary

     21       judgment based on collateral estoppel.                 And it should

     22       be filed very shortly.
     23                    MR.    POWERS:     Hopefully -- Hopefully,          today.

     24                    THE COURT:        So,   you    A complaint was

~~
     25       filed.     Mr.    Kahn answered?

               FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)    340-6464
                                                                                      32

~           1             MR.       POWERS:     Yes.

            2             MS.       BARKLEY:     Yes,   your Honor.

            3             THE COURT:           All right.       So,   a scheduling
            4   order has been issued?

            5             MS.       BARKLEY:     Yes.     I   believe so,

            6   your Honor.     I    think we have a deadline to amend

            7   pleadings within the next few days.

            8             THE COURT:           All right.       So,   this is the only

            9   complaint that you filed in the context of this

           10   bankruptcy case,       is a dischargeability action against

           11   him?

           12             MR.       POWERS:     That is correct.

           13             THE COURT:           And the relevance,        it's just
           14   informational for me,          or what?

           15             MR.       POWERS:     Well,   the relevance is that not

           16   only are we the -- by far and away the largest

           17   creditor, we have nondischargeable indebtedness here.

           18   So ...

           19             THE COURT:           So you assert.         I haven't made

           20   that determination.

           21             MR.       POWERS:     So we assert.         And we

           22   understand you have not made that determination.                     But

           23   we also think that the law in this district is pretty

           24   clear on collateral estoppel;             that is that,        when you

           25   have a final adjudication of this type of misconduct,
'----../

                 FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)    340-6464
                                                                         33

 1   that it is,    as a matter of law,           going to be

 2   nondischargeable,      which should

 3                THE COURT:       So,    if I make the determination

 4   down the road that it is a nondischargeable debt--and

 5   I haven't looked at the complaint or the answer to

 6   that;    I'm letting the process unfold--what does that

 7   do to any of this?

 8                MR.   POWERS:     Well,    in      in a sense,   I don't

 9   know that it does all -- Because,             either way, we've

10   got over $2 million worth of debt,             whether it's

11   dischargeable or nondischargeable,             and by far and away

12   the largest creditor of the estate.

13                THE COURT:       Okay.

14                MR.   POWERS:     So,    that's the -- That's,     I

15   guess,    the major point there.

16           A few points about procedural points.              The local

17   rules,    as your Honor knows,         require that there be a

18   witness list and an exhibit list exchanged five days

19   before,    and I   think it's five business days before a

20   hearing.     That did not happen here.           There was no

21   witness list,      there was no exhibit list.

22           We did get notice that he served a subpoena on
23   his expert witness.          And I think that notice was given

24   to us sometime late Thursday,            which is hard -- which I

25   think is -- Let me see.             Monday was a -- was a

      FEDERAL COURT REPORTERS OF SAN ANTONIO               (210)   340-6464
                                                                           34

 1   holiday.

 2                THE COURT:        Right.

 3                MR.    POWERS:     So,    I don't think that's five

 4   days.     And,    on top of that,       no witness list was ever

 5   served.     Okay?     Just the subpoena.        And,    of course, no

 6   exhibit list was served,          though he did attach that

 7   appraisal to his objections.

 8           I want to make my objection that he has not

 9   complied with the local rules,             because he has not.

10                THE COURT:        On the exhibit list and the

11   witness?

12                MR.    POWERS:     And the witness list.

13                THE COURT:        All right.     That's fine.

14                MR.    POWERS:     And I want to preserve that

15   objection,       your Honor.     I know your Honor will

16   probably want to hear from the expert.                 And,   quite

17   frankly,    I don't want to give him another appellate

18   point,    you know.     But I want to make this objection,

19   nonetheless, because I do want to - -            I don't want to

20   give up that issue.

21                THE COURT:        Okay.

22                MR.    POWERS:     Again,   thank you,     your Honor.

23                THE COURT:        All right.     Now,   Mr.   Kahn.

24                MR.    KAHN:     Thank you,    your Honor.

25           I would like to start off saying that a lot of

      FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)   340-6464
                                                                                     35

        1   this information that Mr.                Powers just said is
'--'
        2   incorrect.          Number one,

        3                     THE COURT:       Is it -- Let's -- If I may,          sir.

        4                     MR.   KAHN:    And I will go through it in

        5                     THE COURT:      Wait.     Just wait.     No,    no.    The

        6   way this works is,              when I ask a question,      you stop

        7   talking and you answer my question.

        8                     MR.   KAHN:     Sorry, your Honor.

        9                     THE COURT:       So.      And you'll learn this

       10   if you go to law school.                 By the way,    I teach at

       11   law school,         too.

       12           For your information,             I want to know, you -- you

       13   should -- I         hope you noted that I              I sort of

       14   examined Mr.            -- the Trustee in this case,        Mr.    Thomas,

       15   about a number of things.                 Do you disagree or contest

       16   anything that he told me?

       17                     MR.   KAHN:     Practically everything,

       18   your Honor.

       19                     THE COURT:       Practically everything.          Okay.

       20   So,   we'll need to deal with that,              as well.

       21           So,   I    just want to get that -- I know you

       22   disagree with Mr.            Powers.      You -- Basically,
       23   everything that Mr.             Thomas said you disagree with,           as

       24   well;    is that correct?

       25                     MR.   KAHN:    well,    there's a lot of things

             FEDERAL COURT REPORTERS OF SAN ANTONIO                    (210)    340-6464
                                                                             36

 1   that Mr.    -- what Mr.      Thomas said that I          can clarify,

 2                THE COURT:       Okay.

 3                MR.   KAHN:           I would like to clarify.

 4        To start off with,            is that the many different

 5   companies and -- are not -- there is no more

 6   companies.     They've all been shut down,               so ...   And

 7   there's no assets in any of them,               so ...

 8                THE COURT:       There's nothing to sell?

 9                MR.   KAHN:     There's nothing there.

10                THE COURT:       All right.

11                MR.   KAHN:     Okay.        The -- I have a chart

12   which I    submitted         which I submitted to the -- in
13   in my pleading.

14                THE COURT:       Okay.

15                MR.   KAHN:     And if I may --
16                THE COURT:       Do you all have a copy of this
17   chart?

18                MR.   KAHN:     They have a -- They have a copy.
19                MR.   POWERS:        Your Honor,    no exhibits were
20   exchanged.

21                THE COURT:       Well,       this is -- I view this as
22   demonstrative evidence.             So,   do you have a copy of
23   this chart?
24                MR.   KAHN:     In       In the supplemental --
25                MS.   BARKLEY:        No objection,     your Honor.        Let

      FEDERAL COURT REPORTERS OF SAN ANTONIO                   (210)   340-6464
                                                                                              37

          1   me --

          2                   THE COURT:        Okay.     So,   we want to make

          3   sure -- I       appreciate you putting this together.                      This

          4   is a chart of issues as of October 9th,                     2014.

          5           Do you have a copy of this,               Mr.    Thomas?

          6                   MR.    KAHN:     Yes.     He -- He --

          7                   MR.    THOMAS:     I got the same email that he --

          8                   MR.    KAHN:     It's in the --         in the -- in the

          9   motion,    itself.

         10                   MR.    THOMAS:     Supplemental motion.

         11                   THE COURT:        All right.       So,    you all have
         12   this.     So,    I'm not treating this as an exhibit.                      I'm

'--../
         13   treating this as a demonstrative.
                                                             '
         14           You're going to tell me about the assets in your

         15   case?

         16                   MR.    KAHN:     I'm going to tell you about --

         17                   THE COURT:        Are we picking him up,            by the

         18   way?

         19                   ERO:     Yes,    sir.

         20                   THE COURT:        All right.       Go ahead,       sir.

         21                   MR.    KAHN:     One of the -- They keep on

         22   talking about all these different cases,                     and I'm
         23   I'm going to -- to go over them slightly,                     and -- and

         24   also on the appeals process.                 Because,      you know,       if

         25   you recall,       your Honor,       I also filed an adver-            --

               FEDERAL COURT REPORTERS OF SAN ANTONIO                      (210)    340-6464
                                                                          38

 1   there was an adversary proceeding,          of which,    to start

 2   off with this guy here,       who -- who only knows --

 3   doesn't know to tell the truth,          claimed that I      stole

 4   over a million dollars out of Helvetia's funds.

 5                THE COURT:     Okay.

 6                MR.   KAHN:   And,    to answer that,    in the

 7   answer of the adversary proceeding,          I    submitted every

 8   check,    every      for every bank account.         And they --

 9   So -- And an analysis of it, which I                I will show

10   which I       which is also there,       and it's also -- so

11   that       to show that this -- this is -- you know,             this

12   is being prosecuted.

13          One of the things that's in their -- in their --

14   in their motion is they claim I          stole $60,000.        And

15   one       This is one section.        They have different ones.

16                THE COURT:     Which motion are you referring

17   to, Mr.    Kahn?

18                MR.   KAHN:   In the adversary -- adversary

19   proceeding.

20                THE COURT:     If I may,    the adversary

21   proceeding's not before the Court.           What's before the

22   Court is this issue.        The issue is whether or not the
23   Trustee can sell these assets.           You've objected.

24                MR.   KAHN:   Well,    I have also       I have also

25   a -- a hearing for sanctions against him for a million

      FEDERAL COURT REPORTERS OF SAN ANTONIO              (210)   340-6464
                                                                                  39

 1   dollars that's scheduled to be heard Tuesday,                         sir,   on

 2   the 29th of this month.

 3                 THE COURT:       Okay.         And I don't think --

 4   Mr.   Thomas,    is that part of what you're selling?

 5                 MR.    THOMAS:        I don't --

 6                 THE COURT:        I       don't -- I    didn't think so.

 7                 MR.    THOMAS:        I    don't -- I don't think so,

 8   Judge.       I was going by the schedules,                the schedules

 9   that were filed in the case.                  And I think this

10   sanction came up after it,                 as part of the adversary.

11                 THE COURT:        Is that correct,           Mr.   Kahn?

12                 MR.    KAHN:     This -- This -- This came up

13   The adversary proceeding --

14                 MR.    THOMAS:        Right.

15                 MR.    KAHN:     -- you're involved in.              And

16   you've gotten -- You were noticed --

17                 MR.    THOMAS:        That's postpetition.           Those

18                  MR.   KAHN:     You were noticed about the

19   adversary proceeding,           and you were also noticed

20   also noticed --

21          I'm sorry, your Honor.                And I'm also sorry about,

22   sometimes I'm closing my eyes.                  I    --   I've had some

23   surgery.       So ...

24                  THE COURT:       Well,       that's all right.

25          So,    but this   -- this is          -- this is a lawsuit you

      FEDERAL COURT REPORTERS OF SAN ANTONIO                       (210)    340-6464
                                                                                      40

·-~
         1   filed after you filed bankruptcy;               right?

         2               MR.   KAHN:    No.      No,   no.    No,   wait a minute.

         3   They filed an adversary proceeding.

         4               THE COURT:      11
                                              They,"   who is?

         5               MR.   KAHN:    Helvetia.

         6               THE COURT:      Right.        And that's the

         7   dischargeablity action against you?

         8               MR.   KAHN:    Right.         Then I came back,        in my

         9   answer -- in my answer,           I answered them.         And then I

        10   made       I also filed a motion for sanctions,                 let 21

        11   days go by so that they could change it,                 or anything.

        12   And I   filed a motion for sanctions.

        13               THE COURT:      In the adversary proceeding?

        14               MR.   KAHN:    In the adversary.

        15               THE COURT:      Okay.

        16               MR.    KAHN:   But this is -- this -- this is a

        17   giant asset.      Because in the adversary,              I have,

        18   essentially,      a thousand pages,         over a thousand pages,

        19   you know,    the checks, you know,           the checks of each one

        20   of the people that I       sent to,        you know.      So,   the

        21   complete explanation of all the funds that I've sent,

        22   so that.I didn't steal any of the money.

        23           The -- The -- With this -- As I was saying in

        24   that $60,000 example of one of the -- This is one of

        25   the examples.       I needed -- I wrote a check out for --
'-__/

              FEDERAL COURT REPORTERS OF SAN ANTONIO                   (210)    340-6464
                                                                            41

 1   for Mr.   Ripley to get their -- their -- their

 2                THE COURT:       Okay.     We're not trying the

 3   case.     You've actually answered my question,             which is,

 4   this is -- this is a pleading that you filed against

 5   Helvetia or Haynes and Boone asking for sanctions of a

 6   million dollars.

 7                MR.   KAHN:     Right.

 8                THE COURT:       Mr.    Thomas,   does the Chapter 7

 9   estate have an interest in that -- in that motion for

10   sanctions?

11                MR.   THOMAS:     We do not,      Judge,   have an

12   interest in the sanction motion filed in the

13   adversary.

14                THE COURT:       So,    it's not an asset he's

15   trying to sell,      nor he's claimed any interest in.

16   So,   it's -- it's not part of the motion today.                  If

17   If you prevail on that,         that's -- that's -- whatever

18   accrues as a result of that,            that's your money,        it's

19   not the estate's money.

20                MR.   KAHN:     Okay.

21                THE COURT:       So,    we don't need to get into

22   that.     I understand you filed the motion,             but that's
23   not part of what's before the Court today.

24                MR.   KAHN:     Well,    one of the things,

25   your Honor,    that they -- they mentioned is -- was --

      FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)   340-6464
                                                                             42

 1   Let's go into the -- the sanction -- the sanction

 2   case.

 3                   THE COURT:        The one that they -- that

 4   Haynes          that Helvetia filed against you;             correct,

 5   sir?

 6                   MR.   KAHN:   Helvetia filed against me.

 7                   THE COURT:        Right.

 8                   MR.   KAHN:   I    -- I am charged,    under -- In

 9   Texas Civil -- Civil Remedies,              Chapter 10,      sanctions

10   cannot be charged against a party who is represented.

11           I didn't sign that -- that -- that pleading,

12   an -- an attorney signed the pleading.                 So,    that is

13   that is just, basically,             major in that I    -- I am not

14   responsible for it.

15           Then,    this is -- this is almost the same thing

16   with the $60,000 that they played games with.                    Let me

17   just clarify that, your Honor,              because it's -- it's a

18   typical situation that I have been plagued with

19   throughout -- throughout these proceedings,                   which have

20   gone on for over a year now.

21           I   -- And -- But I hit the -- the button for

22   $20,000 so I          could pay       so I can pay Mr.       Ripley,
23   Mr.    Ripley's credit card.           Okay?     But I made a

24   mistake and I          -- it didn't come up to twenty,          I hit

25   it again and I hit it again.               So,   I hit three times.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)    340-6464
                                                                                          43

         1   So,    I    took $60,000 out of Helvetia and put it into

         2   I    believe I     put it into Joabert because Joabert is

         3   the one who put                spent the money.          I    don't know.

         4   Then --

         5                    THE COURT:       But is this part of the lawsuit

         6   that's pending in state court?

         7                    MR.   KAHN:    Yes.

         8                    THE COURT:       Stop.    Stop.     You're missing the

         9   essential point.           I'm not going to make a

        10   determination on any of that.                That's -- Don't

        11   Don't

        12                    MR.   KAHN:    Well,     I'm not asking you to --

        13                    THE COURT:       Focus.     Focus on what I'm trying

        14   to ask you.

        15              So,   the merits of those lawsuits will be

        16   determined by a state court.                Do you disagree

        17   Listen to my question.              Do you disagree that what

        18   Mr.    Powers said about all of the lawsuits that you

        19   filed,       that judgment has been entered against you?

        20                    MR.   KAHN:     Judgment has been entered against
        21   me,    and it is on appeal,            your Honor.

        22                    THE COURT:      All right.        So,       i t ' s on appeal.

        23   But right now,          right now,      as it stands right now,

        24   those -- those lawsuits are worth nothing,                         because you

-.__/
        25   lost.        Would you agree with that?

                 FEDERAL COURT REPORTERS OF SAN ANTONIO                       (210)   340-6464
                                                                                         44

            1                 MR.   KAHN:   That's correct.

            2                 THE COURT:         All right.        So,   your point is

            3   what on going through this rendition on the lawsuits?

            4   They're on appeal.          I understand that.             You might get

            5   them reversed.        But the value of the lawsuits right

            6   now is nothing.

            7                 MR.   KAHN:   Well,        it's -- Well,      that's

            8   that's because i t ' s in the negative -- negative

            9   amount.

           10          Now,   one of the things is,              what they did on the

           11   same -- on the sanction motion hearing,                    which      which

           12   I was unsuccessful on,            the -- But it was -- Number

           13   one,   it -- it was -- It's got all to do with this man

           14   named Daggett       (phonetic).

           15                 THE COURT:         You're arguing the merits again.

           16                 MR.   KAHN:    I       I       I       I know.       I'm just

           17   trying to

           18                 THE COURT:         You're missing the point.

           19   You're -- With all due respect to you,                    you're missing

           20   the point.      My job,     as it stands right now,            is the

           21   Trustee's filed a motion before this Court,                    and says,

           22   Judge,    I need to administer this estate,                 and here are

           23   the assets I need to administer.

           24          He's described -- You've already agreed as to,

,_____,,   25   I have three categories of assets.                   I   have interest in

                 FEDERAL COURT REPORTERS OF SAN ANTONIO                     (210)    340-6464
                                                                       45

 1   small businesses.         You've conceded that they have no

 2   value.

 3               MR.   KAHN:     Right.

 4               THE COURT:       Then I have shares of stock,

 5   which we'll come to in a minute,             in Helvetia and

 6   Joabert or Joabert.        And then I've got all these

 7   causes of action,     which we're talking about right now.

 8   You've conceded that you've lost all of these cases.

 9   You filed them and you lost.           They may or may not --

10               MR.   KAHN:     But      But

11               THE COURT:       Don't interrupt me.

12        They may or may not be on appeal.              Their value as

13   to -- What you need to understand,             their value right

14   now is zero.      Despite the fact they're on appeal,

15   they're final determinations.              They're not worth

16   anything.

17        So, what is it that -- What's the value to the

18   estate?

19               MR.   KAHN:     The value to the estate is to

20   Joabert,    the shares in Joabert,         which is worth

21   $3 million.

22               THE COURT:       Well,   let's -- let's -- But I'm
23   asking you about the causes of action.              So,   we've

24   You've already said on the record --
25               MR.   KAHN:     That's a -- That's a cause of

      FEDERAL COURT REPORTERS OF SAN ANTONIO              (210)   340-6464
                                                                                       46

'---/
         1   action ending in 17012.

         2                   THE COURT:       Okay.

         3                   MR.   KAHN:   And -- And that's where --

         4   That -- That cause of action is                  is pending.        And

         5   it -- In fact,          it -- it is in this court,         because the

         6   state court sent it over here.             So,    I   don't know if

         7   we're going to get that heard in this                  -- in this

         8   court.

         9                   THE COURT:       And state -- I       can tell you this

        10   much.     State courts don't send me anything.                I   send

        11   stuff to the state court.

        12           So,   what -- All we have right now is,             we've got a

        13   dischargeability action pending against you.                      In the

        14   context of the dischargeability action,                  you've got a

        15   motion for sanctions against the plaintiff.                   If you

        16   prevail

        17           You need to back away from that.               You're a little

        18   close.

        19                   MR.   KAHN:   I'm sorry,   your Honor.

        20                   THE COURT:       If you prevail on the motion for

        21   sanctions,       and you win any monetary relief,            that's

        22   yours.        I've already asked the Trustee.             He says,    I
        23   agree with you,         Judge.     That's yours.
        24           So,    again,   we need to focus on what's before the
        25   Court.        What's before the Court is a motion to sell

              FEDERAL COURT REPORTERS OF SAN ANTONIO                   (210)   340-6464
                                                                      47

nonexempt assets.          And,     as best I can tell right now,

you have no value in these businesses you've listed.

And all the causes of action,              judgment has been

rendered against you,            they're final,      they have no

value,   and you've moved to appeal them.

             MR.   KAHN:     Not -- There's no cause of

action -- nothing in 1701.               The Joabert one has not --

has not been -- has not been adjudicated at all.                     And

that's the -- That's where I might -- where I have the

value of -- of at least $3 million,               in round numbers.

             THE COURT:          All right.    So,   you -- you've

sued Joabert,      or Joabert sued you?

             MR.   KAHN:     I    sued Joabert.

             THE COURT:          Okay.

             MR.   KAHN:     I sued Joabert,         as a minority

stockholder.

             THE COURT:          Go ahead.
             MR.   KAHN:    ' And        Based on that I was -- I

was taken advantage of,

             THE COURT:          Okay.

             MR.   KAHN:     -- as a minority stockholder.

And that I    had one/third -- There's -- There's three
hundred shares;      I own a hundred and Mr. Ripley owns
two hundred.       Now,    that is the

             THE COURT:          Where is that case pending?

 FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)   340-6464
                                                                                 48

·.--._../    1             MR.   KAHN:    It's dead.       In other words,     it --

             2   it isn't pending at all.         I wish      I   -- I'd like it

             3   to get pending.     And -- And

             4             THE COURT:      What do you mean by •dead," sir?

             5             MR.   KAHN:    I mean,    it's -- it's here.        It --

             6   It's been stayed.

             7             THE COURT:      Okay.     So,   you're saying that

             8   you filed a cause of action against Joabert in this

             9   court?

            10             MR.   KAHN:    No,    not in this court,     in the

            11   state court.

            12             THE COURT:      Okay.     And are you the plaintiff

            13   or the defendant?

            14             MR.   KAHN:    The plaintiff.

            15             THE COURT:      And what -- When you say "dead,"

            16   what do you mean by •dead''?

            17             MR.    KAHN:   It -- It was -- It was put into

            18   bankruptcy,    and the -- the state court said it's now

            19   in -- into the bankruptcy court.

            20             THE COURT:      So,    that's what the state court
            21   said?

            22             MR.    KAHN:   That's what the state court said.
            23             THE COURT:      All right.
            24             MR.    KAHN:   But they -- they -- If I can get
            25   a -- a lift stay and -- and have that heard,            because

                  FEDERAL COURT REPORTERS OF SAN ANTONIO             (210)   340-6464
                                                                                49

         1   the -- the assets of the -- of the -- of the -- of the

         2   company,    my assets,     are -- are -- are related to

         3   Joabert.

         4                THE COURT:      Okay.

         5                MR.   KAHN:   Now,   I    -- Also,   there's a claim

         6   of action against the City of San Antonio that's been

         7   also stayed.       And that one was something that the City

         8   raised the road -- raised their road up,              and,    because

         9   of that,    there was some CP- -- some              some pipes in

        10   the ground down below,        and they had to be raised up.

        11   And because of that -- Of course -- Of course,                 I don't

        12   want to plead the -- the litigation.              But that's

'-._/
        13   Because       Because of that,         they -- they made a claim

        14   against me in -- for three thousand some-odd dollars

        15   for -- for the pipes that -- that were underground.
        16   And I    counter-claimed them for            for all the fill and

        17   all the work that I        had to do.

        18           However,   on my chart,       I've reduced it because
        19   it's -- the -- the value -- the value on that lawsuit,

        20   one/third goes to me,        one -- and two/thirds goes to
        21   Joabert.     It belongs to Joabert,         which would --
        22   Joabert is -- Even though I'm the -- the -- the
        23   the defendant in that case,           and the counter-plaintiff,
        24   the -- the actual benefit or cost was -- was Joabert's
        25   not Bert Kahn.

              FEDERAL COURT REPORTERS OF SAN ANTONIO               (210)    340-6464
                                                                             50

 1                  THE COURT:        Is the Trustee selling this

 2   cause of action to Helvetia?

 3                  MR.   KAHN:   Yes.

 4                  THE COURT:        Which one is that?

 5                  MR.   KAHN:   That -- That is Counter-

 6   Counter-Claim 389092.

 7                  THE COURT:        Okay.   And you maintain that

 8   case is pending in our court,              in bankruptcy court?

 9                  MR.   KAHN:   It -- It         When -- When I         filed

10   bankruptcy,      at the advice of my son,               which was wrong,

11   I shouldn't have done that,              but at the -- at the

12                  THE COURT:        You can dismiss your case.            Have

13   you thought about that?
14                  MR.   KAHN:   Pardon?

15                  THE COURT:        You can dismiss your case,           ask

16   the Court to dismiss your case.

17                  MR.   KAHN:   I even -- I even said that to --

18   I    sent,   even,   a memo Mr.     Thomas at one point to

19   dismiss this -- dismiss -- to dismiss the -- the

20   the case,      and he said no.
21                  THE COURT:        Okay.    Well,    I mean,    if
22                  MR.   KAHN:   I    should have just filed it.
23   I    --   I might seem to be trying to be an adversary,                 but
24   I'm not,      your Honor.
25                  THE COURT:        All right.       So,    let -- let's --

         FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)   340-6464
                                                                       51

 1   let me stop you --

 2                  MR.   KAHN:   I'm just defensive.

 3                  THE COURT:     Let me -- Let me stop you right

 4   here.     We've checked.       There's only      The only

 5   The only related lawsuit that's pending in the

 6   United States Bankruptcy Court is the dischargeability

 7   action.       No case has been removed here.        So,   there

 8   aren't any pending cases.            If they're in state court,

 9   they're in state court,         they're not here.     So,   I can't
10   deal with those.         They -- They're pending in another

11   court.

12           So,   back to my point.       If they're "dead" right

13   now,    and they're not progressing,        they have no value.
14                  MR.   KAHN:   Well,   how do I get them out of

15   state court -- out of -- Can I           file a motion right now
16   to -- to

17                  THE COURT:     I can't give you legal advice.

18   You filed this case.
19                 MR.    KAHN:   Well,
20                  THE COURT:     If you think -- If you need to

21   take some remedy,        that's something you'll have to
22   decide.       Is your son a lawyer?
23                 MR.    KAHN:   Yes.
24                 THE COURT:      Then maybe you can talk to him.
25                 MR.    KAHN:   But he doesn't know anything

      FEDERAL COURT REPORTERS OF SAN ANTONIO             (210)   340-6464
                                                                    52

1    about bankruptcy,       except he told me to go to

 2   bankruptcy.

 3                 THE COURT:     Okay.

 4                 MR.   KAHN:   So,

 5                 THE COURT:     So,   let me help you out.

 6   We're - - With all due respect, we're moving on from

 7   the causes of action,        because I can tell you right

 8   now,   you      notwithstanding your dispute as to the

 9   value of        or legitimacy of these causes of action,

10   they have no value right now.

11          Now,   you've subpoenaed a gentleman to be here.

12   Who is this individual you've subpoenaed?

13                 MR.   KAHN:   The man is a   --   an appraiser who

14   has appraised the property.

15                 THE COURT:     Which property?

16                 MR.   KAHN:   The Royal Crest Subdivision.

17                 THE COURT:     Okay.

18                 MR.   KAHN:   And he has - - he's recently

19   appraised it.        He has appraised this property

20   previously,     for Falcon Bank.       That's why I chose him

21   to appraise this property.

22                 THE COURT:     And why do I need to hear

23   testimony from this gentleman?

24                 MR.   KAHN:   Because he said the value of the

25   property is nominally $12 million.

      FEDERAL COURT REPORTERS OF SAN ANTONIO             (210)   340-6464
                                                                     53

 1               THE COURT:     So you say?        Or he says?

 2               MR.   KAHN:   He says.

 3               THE COURT:     All right.

 4               MR.   KAHN:   Anc,    also,    in my lawsuit, where I

 5   worked out a cost analysis,         it also comes out that the

 6   value at the -- at the present time is worth $12 million

 7               THE COURT:     Okay.     And the point of this is

 8   what?   Let's assume he's correct,           just for discussion

 9   purposes.    Why -- Why is that relevant to today's

10   proceedings?

11               MR.   KAHN:   Well,    then,    that means I have an

12   asset of $3 million.       Actually,       it's four million,   but

13   there's -- there's set-offs.          So,    let's say I have an

14   asset of $3 million,      which I    show right here.       It'd be

15   three million one hundred and -- you know.

16               THE COURT:     But you realize your ownership

17   interest is contested,      as to -- as it relates to that,

18   first of all,     and that the value is also contested?

19   You would recognize that?

20               MR.   KAHN:   The value is not contested.

21               THE COURT:     It's not?

22               MR.   KAHN:   Who contests it?
23               THE COURT:     Well,    I mean,    we have a -- You

24   say it's part of the lawsuit,         and the lawsuit has
25   basically been -- you've lost.

      FEDERAL COURT REPORTERE         OF SAN ANTONIO     (210)   340-6464
                                                                                 54

        1                MR.   KAHN:     The lawsuit hasn't -- hasn't --

        2   hasn't -- The Joabert lawsuit has not -- The Joabert

        3   lawsuit has not -- is not doing anything at the

        4   present time.

        5                THE COURT:       Okay.     So,   why do I   need to hear

        6   testimony from this gentleman,            who's sat patiently --

        7                MR.   KAHN:    Well,     i t ' l l show that my assets

        8   are -- are         are beyond -- a lot -- a lot more than

        9   $10,000.

       10                THE COURT:       Okay.     So,   this -- Does this

       11   relate to the lawsuit,         sir,    or your shares of stock in

       12   Joabert?

'--/
       13                MR.   KAHN:     It relates to my shares of stock

       14   in Joabert.

       15                THE COURT:       Now,    how much of a value did you

       16   place on the -- the shares of stock in Joabert on your
       17   schedules?

       18                MR.   KAHN:     It's three million -- I         have --

       19   In the schedules,      I had it a little -- it was a little

       20   bit different because I refined it down.                 It's three
       21   million -- Right now,         it's $3,103,000.

       22        I   adjusted it because Mr.          Ripley had taken
       23   $160,000 out of            out of the -- out of the funds,           and
       24   that would reduce -- reduce his -- his loan,                 which

       25   would -- you know,         which -- which would make the

             FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)   340-6464
                                                                       55

 1   profit of -- of the -- Joabert a little bit more.                 So,

 2   I    -- I adjusted that.

 3                THE COURT:       All right.

 4                MR.   KAHN:     So,

 5                THE COURT:       So,   I need to hear testimony

 6   from this gentleman because he's going to tell me that

 7   the value of this development is -- is $12 million,                of

 8   which your share would be a little over $3 million;                is

 9   that correct?

10                MR.   KAHN:     That's correct.

11                THE COURT:       All right.     So -- And how do

12   And that relates to your shares of stock,            and also

13   maybe the lawsuit that you filed that you lost on;                is

14   that correct?

15                MR.   KAHN:    No.     I didn't lose on it.
16                THE COURT:       You didn't lose?
17                MR.   KAHN:    No.

18                THE COURT:       What happened?

19                MR.   KAHN:     We lost on -- We -- We lost on --

20   on -- on Helvetia,         or the Key Largo Subdivision,      I've

21   lost on.     But I didn't -- Royal Crest,         I have not lost

22   on it.     It has not -- has not been adjudicated.
23                THE COURT:       Okay.   So,   what is it
24   Let's -- Let's get to the essential point.               Do you

25   want me to deny the Trustee's motion?

         FEDERAL COURT REPORTERS OF SAN ANTONIO          (210)   340-6464
                                                                          56

 1                 MR.    KAHN:   Yes,    your Honor.

 2                 THE COURT:      Why?

 3                 MR.    KAHN:   Because I have -- Because the

 4   value is a lot -- worth a lot more than -- than

 5   $10,000,     and the Trustee did not -- one,             didn't

 6   didn't get any -- any other bids.             And according

 7   according to some case law that I            -- I   found,

 8   Merry-Go-Round        (phonetic)     and Rose versus Logan

 9   (phonetic),      it's supposed to be that the Trustee,

10   to sell,     has to do some due diligence,          and to show

11   that -- that there's -- that this is the highest and

12   best price.

13           I   can -- I can grab the -- the words on that,

14   your Honor.

15                  THE COURT:     That's fine.

16                  MR.   KAHN:   But it basically says that in two

17   district court cases,         Rose versus Logan and in

18   Merry-Go-Round.         So -- And that's in my

19                  THE COURT:     So,    who else is going to buy

20   these assets,        if not Helvetia?      Who's going to buy

21   them?

22                  MR.   KAHN:   You -- You mean,       in      in
23   Joabert?

24                  THE COURT:     All of this stuff.          Whether it's

25   the causes of action,         the interest in the business,            or

      FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)    340-6464
                                                                               57

 1   the shares of stock,                who else is in a position to buy

 2   these assets?           You raised the question, well,              he

 3   should have exposed it to a bid.                     So, my question to

 4   you is,       who else would buy these assets?

 5                   MR.    KAHN:        Anybody -- Any developer would

 6   want to buy the assets to -- for -- for -- for

 7   Joabert.

 8                   THE COURT:              Okay.   What's the status of

 9   Joabert right now,             in terms of development?

10                   MR.    KAHN:        Pardon?

11                   THE COURT:              What's the status of Joabert

12   right now,       in terms of development?

13                  MR.     KAHN:        It's in the - - They were not        - -

14   Excuse me.        I would       -   -    Let me show you another picture

15   here.

16                   THE COURT:              Okay.

17                  MR.     KAHN:        This is Joabert,     your Honor,     or

18   the Royal Crest Subdivision.

19                   THE COURT:              You can come around,

20   Ms.   Barkley,        and watch.           That's not a problem.

21           So,    this is the development otherwise known as

22   Royal Crest;          is that correct?

23                   MR.    KAHN:        That's correct.      And this is the

24   approved master plan that I did,                    that's getting

25   approved by the city.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                     (210)    340-6464
                                                                             58

         1             THE COURT:      Okay.     And has it been approved

         2   by the city?

         3             MR. KAHN:      Yes,   it has.

         4             THE COURT:      Have there been any lots that

         5   have been developed?      I mean,    have --

         6             MR.    KAHN:   There -- There are lots of -- The

         7   first section has got about $250,000 more work to be

         8   done to be complete.

         9             THE COURT:      And when you say "complete,"

        10   what do you mean?

        11             MR.    KAHN:   That -- That -- To be able to get

        12   final inspection and to sell lots.

'--./
        13             THE COURT:      All right.      So,   the -- Have all

        14   the entitlements been done?

        15             MR.    KAHN:   What do you mean,       "the

        16   entitlements"?

        17             THE COURT:      Well,   the improvements.        Do we

        18   have sewer lines in,     electricity?

        19             MR.    KAHN:   We have sewer lines,       we have

        20   electric lines,    we have

        21             THE COURT:      Have the roads been paved,          curbs

        22   put in?

        23             MR.    KAHN:   The roads have not been.          That's

        24   the work that has to be done,        the final.     The road

        25   hasn't been paved and -- and the curbs haven't put

              FEDERAL COURT REPORTERS OF SAN ANTONIO            (210)   340-6464
                                                                       59

 1   on -- been put on.

 2              THE COURT:     All right.       And who's going to

 3   put that money in to have that done?

 4              MR.   KAHN:   Well,    we had that money.         We had

 5   that money reserved,     and that money was put into the

 6   registry of the court at one point.

 7                             Which court?

 8                            In the state court.

10                            And then they claimed that

11

12                             Who's "they"?

13                            Helvetia.

14                             Okay.

15                            Which I      object to Helvetia

16   because it -- Helvetia is the -- the corporation,

17   and it shouldn't even be here,          and it shouldn't even

18   be in -- in --

19              THE COURT:     They're a creditor,        though.

20   They're a creditor of your case.           They have two

21   judgments against you.

22              MR.   KAHN:   Well,    helvetia has that,        but

23   Helvetia doesn't really have standing.            And we've

24   You even ruled about that,        I   -- when I   complained

25   about,   they're a foreign corporation.

      FEDERAL COURT REPORTERS OF SAN ANTONIO             (210)    340-6464
                                                                           60

 1                THE COURT:     Oh,    I   remember this discussion.

 2   So,

 3                MR.   KAHN:   But I'm --       I'm not -- I don't

 4   want to relit-      -- I'm not trying to relitigate

 5   anything,    your Honor.

 6                THE COURT:     Okay.

 7                MR.   KAHN:   But that          that      -- that issue,

 8   that particular issue,       is in the Supreme Court right

 9   now,   in regards to standing,           and -- and -- and this

10   whole process.

11                THE COURT:     Okay.        Well,    let's put that

12   aside.

13          So, what we have right now is,              how many lots are

14   ready to be developed?

15                MR.   KAHN:   Forty-seven.

16                THE COURT:     And you've indicated that some

17   entitlement work's been done,             you've had

18                MR.   KAHN:   Not -- Most of it.             Practically

19   all of it.

20                 THE COURT:    Well,      you'd recognize you've got

21   to have paved roads.        That's kind of a prerequisite to

22   selling lots.

23          So,   have the lots been platted?

24                MR.   KAHN:   Oh,    yes.     They're all platted.

25                THE COURT:     All right.           So,   the question

      FEDERAL COURT REPORTERS OF SAN ANTONIO                   (210)   340-6464
                                                                              61

 1   then is,    you just need the city's final approval

 2   before you could sell?

 3                MR.    KAHN:    And -- And to put the                  I have

 4   to put the roads in,         and the curbs in,            and       and then

 5   a couple of,       you know,       minor things.         I've got to put

 6   the road signs in,          which we own the road signs.

 7   There's just a couple of little things I have to do.

 8                THE COURT:           So,   but you mentioned there was

 9   $250,000 set aside for this.                The money is tied up in

10   the registry of the state court;                  is that correct?

11                MR.    KAHN:     It was,      but         but Helvetia took

12   the money.

13                THE COURT:           So,   they have the money now.

14   So,   there is not money,           unless you have it,          to do the

15   development;       is that correct?

16                MR.    KAHN:     If I      get it,    I   can get the money.

17   I can go and borrow the money.

18                THE COURT:           How are you going to borrow

19   money?     You're in Chapter 7 bankruptcy right now.

20                MR.    KAHN:     I'm going to -- From what -- I'm

21   going to -- going to get out of that.

22                THE COURT:           How are you going to do that?
23                MR.    KAHN:     I         I wish I knew.          I'm -- I'm
24   going to file a motion to get out.
25                THE COURT:           Okay.    So,    we -- Who -- Is

      FEDERAL COURT REPORTERS OF SAN ANTONIO                     (210)    340-6464
                                                                                               62

               1   this -- Is this property being actively marketed?                           Is

               2   there -- I mean,        is there a broker selling the lots?

               3                 MR.    KAHN:   What has happened -- What

               4   happened is that,        when we were just about a month

               5   away,    and I'm working on the final grades with the

               6   with the men in the field,              they decided that they

               7   didn't want to pay me my -- my share,                      after working

               8   eight years on this thing.               I did everything right.

               9   It's been           I'm the one getting -- We didn't hire

              10   anything.      I did all the engineering work,                  all -- and

              11   all the -- all the "dog" work.                And I never -- I never

              12   took any money,        because I wanted to just leave any

'~
              13   money,    and I     put -- invested money.             I    invested over

              14   a hundred thousand dollars I              had.    And I       didn't        And

              15   I didn't take any money.               And I'm working -- I'm

              16   working there at -- at 6:00 o'clock in the morning

              17   and -- and --

              18                 THE COURT:         So,   are you working for Joabert,

              19   still?    Are you an employee?

              20                 MR.    KAHN:   I    --

              21                 THE COURT:         Are you an employee of Joabert?

              22                 MR.    KAHN:   Not at the present time,                 no.   I

              23   don't - - I          I was -- I          I was a -- Was I an

              24   employee?      I never collected any money,                  so ...

              25                 THE COURT:         All right.      So,       you're not an
' .....__./

                    FEDERAL COURT REPORTERS OF SAN ANTONIO                       (210)    340-6464
                                                                           63

 1   employee.     Are you an investor in Joabert?

 2        You need to back away from it.                  You're a little

 3   too close.     Back away.         Thank you.

 4                MR.    KAHN:   Sorry.

 5                THE COURT:         That's all right.        Go ahead.

 6        So, you're not an employee of Joabert.                  Do you

 7   have -- Do you have some sort of -- You've got shares

 8   in Joabert;    is that correct?

 9                MR.    KAHN:   I    -- We had a contract with

10   Mr. Ripley,    which is -- Joabert turned into a

11   corporation because we thought that the corporation

12   was the -- was -- the -- the format was

13                THE COURT:         Are you an officer,       or were you

14   an officer of Joabert?

15                MR.    KAHN:   Absolutely.        I was the

16   vice-president.

17                THE COURT:         Are you still the

18   vice-president?

19                MR.    KAHN:   They -- They changed -- They

20   changed it.        They -- No.

21                THE COURT:         All right.     So,   you're not an

22   officer,    you're not an employee.            You

23                MR.    KAHN:   That's today.

24                THE COURT:         Today.   Listen to my -- I

25   understand that.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)   340-6464
                                                                         64

 1        So,    you have shares in Joabert.             But as

 2   Joabert stands right now,          all Joabert -- Joabert has

 3   is raw land and partially developed land;               is that

 4   correct?

 5               MR.    KAHN:   And an approved plat.             We have an

 6   approved plat here,        for this one,      and an approved

 7   master plan.       And practically all of this,          the

 8   development has been substan-             -- a good part of it is

 9   substantially done.

10                THE COURT:      So,   your only interest in

11   Joabert,    based upon what you've told me,            is your

12   hundred shares of stock?

13                MR.   KAHN:   Right.

14                THE COURT:     And the only way that you're

15   going to get anything out of that after -- There's

16   debt in the case; correct?           I    mean,   they -- they --

17   Joabert

18                MR.   KAHN:   Well,    debt to - - debt to - - to

19   Ripley and myself, who were the two owners.

20                THE COURT:     All right.        So,   but there's

21   there's debt.       Didn't you           Didn't Joabert borrow

22   money to acquire this land?
23                MR.   KAHN:   No.

24                THE COURT:      So,   they bought the land

25   outright?

      FEDERAL COURT REPORTERS OF SAN ANTONIO                (210)    340-6464
                                                                        65

 1               MR.   KAHN:   Yes.

 2               THE COURT:     Not -- Not one bit of debt,            at

 3   all?

 4               MR.   KAHN:   Wait a minute.          There is one

 5   debt,   one -- one debt to Mr.       Gatsby.       If we sell

 6   When,   and only when, we sell these -- some -- a few of

 7   those lots,   there's -- there's a debt of -- of

 8   $250,000.

 9               THE COURT:     All right.       So,    you're

10   representing to the Court that Joabert has no debt.

11   And you have shares -- You have a stock share interest

12   in -- in Joabert;     is that correct,       sir?

13               MR.   KAHN:   That's correct.

14               THE COURT:     All right.       Now,    you recognize

15   that you're not going to -- Is it -- Or do you agree

16   that you're not going to get paid anything on your

17   shares until these lots are developed?               I mean,

18   there's no money to get out of the entity right now

19   because nothing•s been built.

20               MR.   KAHN:   Well,    no.   It -- It's -- No.

21   It      There's electric.        There's -- There's --

22               THE COURT:     No,    I mean,   homes.     No homes
23               MR.   KAHN:   There's impact       (indiscernible;

24   simultaneous speakers)      dollars,     your Honor.

25               THE COURT:     There's no homes that have been

      FEDERAL COURT REPORTERS OF SAN ANTONIO               (210)    340-6464
                                                                           66

 1   built.

 2                MR.   KAHN:    No homes -- There's -- No,           no

 3   homes have been built.

 4                THE COURT:      Okay.

 5                MR.   KAHN:    But there's -- there's -- there's

 6   the roads.     There's -- There's impact fees of -- of at

 7   least $2 million that have been paid to the sanitary

 8   and water systems.         So,    the value of this is -- And

 9   all these -- all these roads -- all these roads have

10   been carved in and graded -- and substantially graded

11   out.     A couple of roads over in here haven't -- The
12   main road coming in is all graded up.                 It's -- It

13   needs -- What it needs to do is,               you know,   we need

14   to -- The plan was,        is to sell this section,          take the

15   money and then -- you know,             and --

16                THE COURT:      I understand.

17                MR.   KAHN:          and -- and forward it.
18                THE COURT:      What's the name of the gentleman

19   that you brought in as the appraiser?

20                MR.   KAHN:    Mr.    Gary Mowrey.
21                THE COURT:      Mr. Mowrey,         could you come to

22   the podium,    please.
23                MR. MOWREY:         Yes,   sir.
24                THE COURT:      Mr.    Mowrey,      are you here of your
25   own volition this morning?

      FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)   340-6464
                                                                             67

      1                MR. MOWREY:     I was subpoenaed.

      2                THE COURT:    All right.        So,   you're answering

      3   a subpoena.

      4          What's -- What's your relationship -- First of

      5   all,   give me your background.        What kind of appraiser

      6   are you,   sir?

      7                MR. MOWREY:     I'm a commercial real estate

      8   appraiser,    I've been doing it for 25 years,           with

      9   Stouffer & Associates.

     10                THE COURT:    All right.
     11                MR. MOWREY:     I appraise subdivisions,           is one

     12   of my specialties.        I've done it -- hundreds and

     13   hundreds of subdivisions.

     14                THE COURT:    Thank you.        Did you appraise

     15   this property?

     16                MR. MOWREY:    Yes,    I did.
     17                THE COURT:    When?
     18                MR. MOWREY:    April of this year.

     19                THE COURT:    All right.        And who did you do

     20   the appraisal for?

     21                MR. MOWREY:    Mr.    Kahn.

     22                THE COURT:    All right.        So,   he - - he engaged
     23   you to do an appraisal.       And,    so, you have -- you have
     24   an opinion as to value on this?

,_   25                MR. MOWREY:    Yes,    sir.

           FEDERAL COURT REPORTERS OF SAN ANTONIO               (210)   340-6464
                                                                       68

 1                  THE COURT:    All right.     So,   you understand

 2   that you're here this morning.            You've sat,    and I

 3   appreciate it, very patiently through these

 4   proceedings.       And you understand that the reason

 5   you've been         If I let you testify--! haven't decided

 6   whether I'm not going to,         or I'm going to allow you to

 7   do it--you're going to give an opinion as to value of

 8   the subdivision.

 9          Now,    the one thing I will let you answer right

10   now is,      you noticed I've asked Mr.      Kahn lots of

11   questions about the status of the development.                 Is his

12   rendition accurate,         that there has been -- that it's

13   been platted,      there's been some utilities in,           but the

14   roads still need to be constructed,           curbs need to be

15   put in?       Is that accurate?

16                  MR. MOWREY:     I'm not an engineer,      but I

17   believe that's accurate.

18                  THE COURT:    All right.     There -- There

19   are -- Are -- There are not any lots for sale right

20   now;   is that correct?

21                  MR. MOWREY:    Correct.

22                  THE COURT:    All right.     Thank you.
23          Could you step away for a moment,           please?
24          Thank you.

25          So,    do you want to -- Do you want to put -- You

      FEDERAL COURT REPORTERS OF SAN ANTONIO              (210)    340-6464
                                                                                    69

            1   said he's costing you money.            Do you want to put his

            2   testimony on?

            3                MR.   KAHN:     Yes,   your Honor.

            4                THE COURT:       All right.    And he's going to

            5   give testimony as to what?

            6                MR.   KAHN:     As to the value of -- of -- The

            7   as-is       as-is value of the -- of the -- of the

            8   property right now.

            9                THE COURT:       Okay.    And you're -- Let's be

           10   clear.     Your interest in -- in the property is derived

           11   from your stock -- ownership of shares of stock in

           12   Joabert?

-...___/
           13                MR.   KAHN:     That's -- That's correct.

           14                THE COURT:       All right.    Yield the podium.

           15   I   want to hear from the other parties,            please.    If

           16   you'll step away.          Take your -- Take your drawings,

           17   if you could,      please.

           18           All right.    Mr.    Powers.

           19                MR.   POWERS:     Yes, your Honor.

           20                THE COURT:       So,   you've raised the objection

           21   that       that Mr.   Kahn is not in compliance with the

           22   local rules,       that he -- he did not provide you a
           23   witness list nor an exhibit list five days in advance,

           24   as prescribed under the local rules,              as to the

           25   gentleman testifying and also his appraisal;              is that
~--

                    FEDERAL COURT REPORTERS OF SAN ANTONIO            (210)   340-6464
                                                                                                 70

           1   correct?

           2               MR.    POWERS:        That is correct,         your Honor.

           3   No witness list or exhibit list was exchanged.

           4               THE COURT:           All right.        So,   I ' l l deal with

           5   that in just a minute.             So,    let's back up.

           6        What is your understanding,               I'm asking for your

           7   opinion,   of Mr.       Kahn's interest in Joabert?

           8               MR.    POWERS:        He claims to have a one/third

           9   interest in the equity of Joabert.

          10               THE COURT:           Okay.

          11               MR.    POWERS:        Okay?     Not in the land.

          12               THE COURT:           I understood that distinction.

  __
'--   /   13               MR.    POWERS:        Okay.     And,    your Honor,          I   --

          14   I don't know if he was under oath just now when he was

          15   saying about

          16               THE COURT:           I didn't swear him in,             I    just

          17   asked him some questions.                You're right.

          18               MR.    POWERS:        When -- About the property --

          19               MR.    KAHN:     I    tell the truth.
          20               THE COURT:           Don't interrupt.          You'll get
          21   your chance,      Mr.    Kahn.

          22        Go ahead,      Mr.    Powers.
          23               MR.    POWERS:        You asked questions,          I       think,
          24   about the debt on the property.
          25               THE COURT:           Right.

                FEDERAL COURT REPORTERS OF SAN ANTONIO                      (210)       340-6464
                                                                            71

 1                MR.    POWERS:     I have,   in my hand,    Mr.    Kahn's

 2   state court action,       which has been dormant in state

 3   court for some time,          against Joabert Development

 4   Corporation,       because nobody will prosecute it.            And

 5                THE COURT:        Is he the plaintiff in that

 6   case?

 7                MR.    POWERS:     He's the plaintiff in that

 8   case.

 9                THE COURT:        Is there a reason why the case

10   isn't going forward?

11                MR.    POWERS:     None that I know of,       because

12   it's not stayed by this Court.

13                THE COURT:        Correct.

14                MR.    POWERS:     And the Trustee,   if he -- if he

15   thought it had value, would have intervened as the

16   plaintiff,    and I don't hear him

17                THE COURT:        Let me -- Maintain your

18   thought.     I want to acknowledge on the record that

19   your -- your recitation of the law is correct.                   The

20   stay does not preclude the Debtor from bringing causes

21   of action against other parties.             Further,     to the

22   extent that this is a cause of action that belongs to
23   the estate,    the Trustee has the right to intervene and

24   take over control of the lawsuit,            and he has not done

25   that.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)   340-6464
                                                                            72

 1        So,    please continue.

 2                MR.   POWERS:    That is correct,        your Honor.

 3        And,    for the record,      that is Cause Number 2013,

 4   Prepetition Lawsuit Cll7012.

 5        But in this pleading filed by Mr.               Kahn,    he says,

 6   the outstanding debt,         which is understated,          but he

 7   admits the outstanding debt,           he says,     the property is

 8   encumbered,    total outstanding,        $3,377,000.

 9                THE COURT:       Is there a lien on the property,

10   to your knowledge?

11                MR.   POWERS:    Your Honor,      I don't know if

12   there -- if it's actually -- I don't know.                   I don't

13   know if there's a deed of trust on it.                But I know

14   that the debt on the property -- The property had to

15   be acquired,       it had to be developed,         it had to be

16                THE COURT:       That's why I ask the question.

17                MR.    POWERS:    Yeah.    So,   that's why that --

18   that -- So,    there's indebtedness,          and there's loans on
19   the property.       And even the document through which he

20   claims a one/third interest in the equity acknowledges

21   that all debt has to be paid before he gets a dime.

22        So,    that's -- that's point one.
23        With respect to this opinion,             I      again,    I don't

24   understand the relevance of it because,               one,    it's not

25   an opinion as to the value of his shares,               which is the

      FEDERAL COURT REPORTERS OF SAN ANTONIO                (210)    340-6464
                                                                               73

 1   only thing relevant in this case,             and that is, what is

 2   the value of a minority interest in an undeveloped

 3   real estate project.         And that -- And,            so,   his opinion

 4   does not -- does not go to any germane issue here.

 5        Number two is that the property,                   itself,    he

 6   doesn't appraise the property as it is,                   in its current

 7   condition,      he appraises it as a completed project.

 8   Nor does he opine as to how much it would cost to get

 9   the project to be completed.           And,    as he admitted to

10   the Court,      he's not an engineer,     he doesn't know how

11   much it would cost to get the thing completed.

12        So, what he has given is a speculative opinion

13   about what the property might be worth,                   if it were

14   developed,      which it is not,     and he has no opinion as

15   to the cost of the development.

16        He also gives no opinion as to the debt that's on

17   the property or the indebtedness that has to be paid

18   with respect to the corporate obligations to repay

19   that debt with respect to the improvements to the

20   property.

21        So,    I      I   -- Also,   your Honor,       I          for what

22   it's worth,      we do have an offer that was made on the
23   property for -- as-           as-is,   which,       for whatever
24   reason,    was not done.      It was like,      I       think,    four
25   million dollars.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                    (210)    340-6464
                                                                            74

       1                THE COURT:       I'm sorry.     Say that again?

       2                MR.   POWERS:     Four million -- Four million

       3   dollars as-is.

       4                THE COURT:       The statement before,    that you

       5   said something prior to your statement about the four

       6   million dollars.

       7                MR.   POWERS:     Well,    I don't know why it

       8   wasn't taken into account,            into the opinion but -- of

       9   the property -- real estate.             But there was an offer

      10   for the property,      and we have a written offer from --

      11           K.B. Homes,   is that who it is?

      12               K.B.   Homes,    which is

      13                THE COURT:       Who has a written offer?

      14                MR.   POWERS:     We do,    for -- for -- Joabert

      15   does,    for $4.5 million,      as-is.

      16                THE COURT:       Is -- Is -- Is Joabert your

      17   client?

      18                MR.   POWERS:     Joabert's a client,    yes.

      19                THE COURT:       Okay.     And how -- how do you

      20   represent them?       How did you come to represent them?

      21                MR.   POWERS:     I represent the -- John -- John

      22   Ripley and Bob Ripley are brothers.             Bob Ripley owned
      23   the Helvetia project,         John Ripley owned the other
      24   project.

      25                THE COURT:       The Joabert project?
·-~

            FEDERAL COURT REPORTERS OF SAN ANTONIO             (210)    340-6464
                                                                            75

 1                 MR.    POWERS:    The Joabert project.

 2                  THE COURT:      So,    that's how you came to

 3   represent both of them?

 4                 MR.    POWERS:    Yeah.     Both of them.

 5                 THE COURT:       Okay.     Now I    understand.

 6                 MR.    POWERS:    And -- And,       so,   the point of

 7   all this is,        your Honor,      that you've got all this debt

 8   on the property,        it's not complete,         i t ' s not      has to

 9   be finished out,        nobody's offering to finish it out to

10   get it into final form.

11           He doesn't have rights in the property,                  to begin

12   with.     His claim to stock ownership is -- is nebulous,

13   and in dispute.         There's been a lawsuit to try to

14   establish his interest,           that's been pending for some

15   time.     Nobody -- The estate doesn't have the assets to

16   prosecute that frivolous piece of litigation.                     Nobody

17   has stepped up to take it.              They can't find a lawyer

18   who would do it.

19           And I guess that's all I have to say about that,

20   your Honor.

21                 THE COURT:       All right.        What's -- Mr.

22   Hang on.

23           Mr.   Thomas, do you have any position on this?

24                 MR.    THOMAS:    Judge,    I wouldn't have anything

25   to add.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                   (210)    340-6464
                                                                               76

 1                 THE COURT:          What is the total debt in this

 2   case;    do you all know?

 3                 MR.    POWERS:       our debt is 2,300,000.         And

 4   the -- And the rest is,                kind of,   credit card debt,

 5   isn't it?

 6                  (Sotto voce exchange.)

 7                 MR.    THOMAS:       Judge,    he's -- he's listed

 8   304,000 unsecured debt.

 9                 THE COURT:          Okay.

10                 MR.    THOMAS:       He didn't take into account --

11   And that's where I          came up with my percentage.             So,    he

12   didn't take into account a lot of the corporate debt.

13                 THE COURT:          Okay.     And what's the amount of

14   the assets in the case?

15                 MR.    THOMAS:       He's stating the value of the

16   lawsuits and the interest in the corporations at

17   $5,470,729.
18                 THE COURT:          All right.       Thank you.     Thank
19   you.

20           So,   I need to hear -- Go ahead.              Did you want to

21   say anything else,          Mr.    Powers?

22                 MR.    POWERS:       I    just wondered,   am I   through?
23                 THE COURT:          Yes,    you're through.
24           So, Mr.     Kahn,   you want me to hear from this
25   gentleman.        He's going to give an opinion of value?

      FEDERAL COURT REPORTERS OF SAN ANTONIO                   (210}    340-6464
                                                                               77

       1                 MR.   KAHN:   Well,    I'd like to get something

       2   straight in regards to the --           in regards to the

       3   debt --

       4                 THE COURT:     Okay.

       5                 MR.   KAHN:   -- that I    listed and that we had,

       6   is Mr.    Ripley       Ripley's -- in -- in the contract

       7   that we had that was -- which turned into the -- to

       8   the -- basically,       a partnership agreement that turned

       9   into a stock corporation,           was that Mr.    Ripley would

      10   supply all the money and I would --              I would do all the
      11   work,    in very simple terms.

      12           Mr.     Mr.   Ripley's put in something like

'-.
      13   $2 million,     over $2 million in properties.              And that's
      14   what -- That's the money we used to -- that I used to

      15   buy all this property up,           buy the property and --

      16   and       and then start to develop it,           and pay all the
      17   people that were there.

      18           The     So,   this -- this grand            There was no

      19   other -- The only other debt,           as I    stated,   was that,

      20   in one section of the -- of the property,                 it went --
      21   it -- when that sold,        there was a debt of the $250,000

      22   to Mr. Harold Gatsby.         But, otherwise,       the --
      23           There's also a debt owed to me of a hundred -- a
      24   hundred thousand dollars,           because I    put that money in

      25   to -- to -- to get this thing started,              so...     But

            FEDERAL COURT REPORTERS OF SAN ANTONIO               (210)    340-6464
                                                                              78

 1   there is no         nobody else.

 2           As far as K.B.     Homes,    K.B.     Homes was trying to

 3   buy this property before we even -- even had the

 4   the master plan.       And -- And they -- they had a bid of

 5   five -- They were going to pay something like,                     I   think

 6   it was five or six million,           five million dollars.              It

 7   was --    It was even more than that.             It was -- It was

 8   somewhere -- Oh,      for a certain section.              It was

 9   somewhere around $5 million before we did too much

10   an awful lot more work.

11           There's now -- A bid of 4.5 is another one of the

12   baloney that this man is always --

13                THE COURT:      You didn't accept the offer of

14   five to six million dollars,           did you?

15                MR.   KAHN:    No.

16                THE COURT:      So,    i t was    -- That's all it was,

17   was an offer.

18                MR.   KAHN:    Okay.     And now he's saying that
19   after       after we did that,        and -- and the impact fees
20   changed from -- from,        like,    five --         a million dollars

21   to two million dollars,           that we're going to take 4.5

22   million.
23                THE COURT:      All right.         So,    let's
24                MR.   KAHN:    There -- There is
25                THE COURT:      Let's get to the matter at

      FEDERAL COURT REPORTERS OF SAN ANTONIO                   (210)    340-6464
                                                                           79

 1   hand.     I've -- Did you,          in advance of the hearing

 2   today,    one,   provide a copy of the appraisal to counsel

 3   for Helvetia and the Trustee?

 4           And,   two,    did you identify -- What's the

 5   gentleman's name again?              I'm sorry?

 6                  MR.    KAHN:   Mr.    Mowrey.

 7                  THE COURT:         Did you identify Mr. Mowrey as a

 8   potential witness for the hearing today?

 9                  MR.    KAHN:   Yes,    I did.

10                  THE COURT:         When?

11                  MR.    KAHN:   I    -- I    sent -- When I   -- When
12   I    -- When         When I got the subpoena,        and when the

13   subpoena was issued, which was -- I                believe it was

14   last       last Thursday.           So,    it's six days that
15   that       that he's had it.              He doesn't want to --
16   So,

17                  THE COURT:         Well,    let's -- let's look.

18           We have -- With the Court,             we have your

19   supplemental objection.              I don't see -- The motion to

20   sell was filed on August 29th,                so that's some time
21   ago.     Then you filed an objection on September 17th.

22   Then the Court,         on September 22nd,        set the hearing for

23   today.     You moved to continue;             I denied that at the
24   hearing.       Then you filed a supplemental objection.
25           Where is your exhibit list or designation of

         FEDERAL COURT REPORTERS OF SAN ANTONIO              (210)   340-6464
                                                                                                 80

                     1   witnesses,    because it's not of record with the Court?

                     2                MR.   KAHN:    I didn't supply one,              your Honor.

                     3                THE COURT:         All right.       So,   how -- What

                     4   proof do you have that you -- you sent to opposing

                     5   counsel and the Trustee a designation of exhibits and

                     6   witnesses?

                     7                MR.   KAHN:    I    -- I    sent -- I     sent them in

                     8   the -- In my motion,        I attached the exhibits.

                     9                THE COURT:         Okay.    And did that include

                    10   Did that include the appraisal?

                    11                MR.   KAHN:    The appraisal and -- Yes.               I

                    12   The appraisal,       it included the appraisal,               and the

                    13   chart that I       just showed you.

                    14                THE COURT:         Right.     What about designating

                    15   Mr. Mowrey as a witness?

                    16                MR.   KAHN:    I    -- My designation was that --

                    17   that,   I   sent them a copy of the subpoena before -- I

                    18   sent a -- the copy of the subpoena not on Thursday,                        on

                    19   Wednesday,     a day before.

                    20                 THE COURT:        Wednesday of when?            Last week,

                    21   sir?

                    22                MR.    KAHN:   Last week.          Yes,   sir.
                    23                 THE COURT:        Do you have proof of that?

                    24                MR.    KAHN:   I    -- I    -- I   have it in an email.

'..._...___...,--
                    25                 THE COURT:        Okay.     Do you all dispute that,

                          FEDERAL COURT REPORTERS OF SAN ANTONIO                   (210)    340-6464
                                                                                     81

 1   that he,    one,    attached a copy of the appraisal with

 2   his motion;       and,   two,    sent you a copy of the subpoena

 3   last Wednesday?

 4        Ms.    Barkley?

 5                MS.    BARKLEY:          Your Honor,       we did get a copy

 6   of the Stouffer appraisal.                   But I    believe--and I       can

 7   show you in an email from my secretary--that we got

 8   the subpoena on Thursday.

 9                MR.    KAHN:       Oh,    then it got            There's

10                THE COURT:          Of last week,          Ms.   Barkley?      Is

11   that correct?

12                MS.    BARKLEY:          Yes,    your Honor.

13                MR.    KAHN:       Oh.     Then that's when I got it
14   served.     So,    it was last Thursday,               they got the copy
15   of the subpoena,         sir.

16                THE COURT:          Okay.        So,    what I ' l l do is,    for

17   purposes of the record,               I under-       -- your objection is

18   noted.     I'm going to rule the over objection                        (sic).

19   I'm going to take testimony from Mr. Mowrey.

20        Now,    let -- let me caution you.                    If the -- the

21   testimony that you're eliciting is not focused and

22   relevant,    I will cut you off.                And i t ' l l -- i t ' l l be
23   real short.        So,   I want you to focus on what it is.
24        Now,    you're going to have to demonstrate to the
25   Court -- Because you have a standing problem in this

      FEDERAL COURT REPORTERS OF SAN ANTONIO                        (210)    340-6464
                                                                          82

 1   case.     And -- And the law,          frankly,   is pretty clear.

 2   I had one of my law clerks look because,                you know,

 3   they -- they're smart.          And there's a case on point

 4   that talks about as follows:              The Chapter 7 debtor is

 5   a party in interest and has standing to object to a

 6   sale of assets or otherwise participate in litigation

 7   surrounding assets of the estate only if there could

 8   be a surplus after all creditors'              claims are paid.

 9           This is a Second Circuit opinion,             In re:    60 East

10   80th Street Equities,          Inc.,    218 F.3d    109,   Second

11   Circuit,      2000.

12           I don't know if there's a case on point in the

13   Fifth Circuit,        but you are not the first Chapter 7

14   pro se debtor I've had where there's been an objection

15   raised to a sale of property.

16           So,   you need to establish that your interest in

17   Joabert exceeds the amount of the claims in this

18   case.     And if you can't do that pretty quickly,                I'm
19   cutting you off and the hearing will be over.
20           So, we're going to take a five-minute recess,                   and

21   then I'm going to hear from your witness.

22                  MR.    KAHN:   Thank you,      your Honor.

23                  THE COURT:      All   right.     Short recess.
24                  COURTROOM DEPUTY:         All rise.

25                  (Recess.)

      FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)    340-6464
                                  Mowre       - Direct

                                                                                 83

 1                THE COURT:           All right,     Mr.    Kahn.     You can

 2   call your witness.

 3                MR.    KAHN:     Mr. Mowrey,        please take the --

 4   take the witness --

 5                THE COURT:           Mr.   Mowrey, will you come

 6   forward please and appear in front of Ms.                       Gutierrez?

 7   She's going to administer the oath,                    sir.

 8                (Witness sworn by the Courtroom Deputy.)

 9                COURTROOM DEPUTY:             Would you please state

10   your first and last name,               spelling your last?

11                THE WITNESS:           Gary Mowrey,        M-0-W-R-E-Y.
12                THE COURT:           M-0-W ...

13                THE WITNESS:           ... R-E-Y.

14                THE COURT:           Thank you.

15         You may proceed,            Mr.   Kahn.
16                MR.    KAHN:     Thank you,        your Honor.

17                                DIRECT EXAMINATION

18   BY MR.   KAHN:

19   Q.    Good morning,         Mr.    Mowrey.

20         I had -- Did you make an appraisal of the Royal

21   Crest Subdivision in and around April of this year?
22   A.    Yes,   sir.
23   Q.    What did you      ~-    What did you consider as,               as-is,
24   the      the value of that property?
25                MR.    POWERS:        Objection; no predicate.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                       (210)   340-6464
                                        Mowrey - Direct

                                                                                       84

 1                 THE COURT:             Sustained.

 2          You're going to have to develop,                     sir,    how he

 3   reached his conclusion as to the value.                        You simply

 4   can't ask him that.                 You've got to go through and ask

 5   Mr.   Mowrey how he reached his conclusion on value.

 6                 MR.       KAHN:       Okay.

 7   Q.     (By Mr.      Kahn)          Mr.      Mr.   Mowrey,    do you have a

 8   standard procedure in your -- when you appraise real

 9   estate subdivisions?

10   A.     Yes,   sir.

11   Q.     Could you please state what the -- that procedure

12   is?

13   A.     We estimate the current as-is value of the lots,

14   as if they were developed.                      Then we estimate the

15   absorption period that it would take to sell these

16   lots to builders.                  We do a discounted cash flow over

17   the estimated absorption period,                     come up to a net

18   present value after subtracting expenses to develop

19   the property.               And the conclusion is prospective value

20   upon completion of construction.

21   Q.     And did      -   -

22                 THE COURT:              Is that of all the lots,             sir?

23                 THE WITNESS:               Yes.     That's 444 lots.

24                 THE COURT:              Thank you.

25          Go ahead,            sir.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                            (210)   340-6464
                                              Mowrev - Direct

                                                                                     85

            1   Q.    (By Mr.       Kahn)     And did you follow those rules

            2   when you made the appraisal of the property?

            3   A.    They're not really rules,             but procedures, yes.
            4   Q.    Procedures.           Yes.

            5         And I    see in the -- the appraisal that there's

            6   the location and similar lots and a -- and a copy of

            7   the master plan in it.               Did you -- Did you -- With

            8   your calculations,           did you arrive at a -- an as-is

            9   A.    Under prospective value upon completion of

           10   construction,        of eleven million eight fifty.

           11                 MR.    POWERS:        Objection,    your Honor;

           12   nonresponsive.         The question was as-is.

           13                 THE COURT:           All right.     Can you -- Can
 .   __,
           14   you     Sustained.

           15   Q.    (By Mr.       Kahn)     What is the as-is value of that

           16   property?

           17   A.    We didn't do an as-is value of that property.                   We

           18   did a prospective value upon completion of

           19   construction.

           20   Q.    Well,    it says here a prospective value of --

           21                 THE COURT:           When you say "here," what page

           22   are you referring to?
           23         Do you have an objection,             sir
           24                 MR.    POWERS:        I was just -- I was waiting for
           25   him to finish his question.
"-__;'

                 FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)   340-6464
                                 Mowrey - Direct

                                                                            86

 1                THE COURT:           All right.

 2                THE WITNESS:           It's on the third page,

 3   prospective value,          market value opinion,          September 1.

 4   We did the appraisal as -- in April.                    We assumed a six

 5   month construction period,                and a completion date in

 6   September to start the construction -- or to finish

 7   the construction of Phase One,                 and each phase would

 8   roll after that.

 9                THE COURT:           All right.      So,   Phase One is how

10   many lots,      roughly?

11                THE WITNESS:           I don't remember.

12                THE COURT:           All right.     That's fine,      if you
13   don't.

14   Q.     (By Mr.     Kahn)     I    show you this --
15                THE COURT:           Okay.     You can't go to -- Can
16   you put it right there,             sir?

17                MR.    KAHN:        Yes,   sir.

18                THE COURT:           can you see it from there,

19   Mr.   Mowrey?

20                THE WITNESS:           I've got an exhibit of that in

21   my appraisal.

22                THE COURT:           All right.     Go ahead,    sir.
23   Q.     (By Mr.     Kahn)    Yeah.         The phase one,
24   A.    Yes.

25   Q.     -- it says how many lots -- Well,                does the phase

      FEDERAL COURT REPORTERS OF SAN ANTONIO                    (210)   340-6464
                                       Mowrev - Direct

                                                                             87

         1   that -- Pardon me.        The phase that we did was not
" ._,
         2   Phase Three.       We did Phase Three first.

         3   A.   That's 49 lots in Phase Three.

         4               MR.    POWERS:    Objection;   leading.

         5               THE COURT:       All right.    I ' l l overrule that.

         6        That's fine.         Please continue.

         7   Q.   (By Mr.      Kahn)   Now,   when you --   I'm --   I'm a

         8   little confused on the point of -- If the -- If you

         9   sold the property -- If -- If the market value that

        10   you -- What is the market value of that property to

        11   sell right now?

        12   A.   Prospective value upon completion of construction

        13   is eleven million eight fifty.

        14               MR.    POWERS:    Objection;   nonresponsive.
        15               THE COURT:       Sustained.

        16        May -- If I      may intervene.

        17        Mr.   Mowrey,    is it accurate to say that you do not
        18   have an opinion as to the present value of the

        19   property as-is today?

        20               THE WITNESS:         The net present value upon
        21   completion of construction is what I           conclude.    I
        22   don't have an opinion of the as-is value today.
        23               THE COURT:       Right.   And the reason that you
        24   can't give an opinion as to the as-is value is why?
        25               THE WITNESS:         It was beyond the scope of my
·~~

              FEDERAL COURT REPORTERS OF SAN ANTONIO            (210)   340-6464
                               Mowrey - Direct

                                                                      88

 1   appraisal.

 2                THE COURT:     Thank you.

 3                THE WITNESS:     I wasn't -- I wasn't asked to

 4   do that.

 5                THE COURT:     All right.     So,   you can't ask

 6   him -- He -- What -- Let me just intervene.             I've

 7   heard probably a couple hundred appraisals since I've

 8   been on the Bench.

 9          Which governs -- What set of standards governs,

10   sir,   how you may conduct an appraisal?

11                THE WITNESS:     The Uniform Standards of

12   Professional Practice.

13                THE COURT:     Right.     And USPAP is,   I think,
14   how we refer to it?

15                THE WITNESS:     USPAP.

16                THE COURT:     USPAP,   as I understand it in

17   listening to many appraisals,          will not allow you to

18   testify as to an opinion on which you didn't base your

19   appraisal.     Is that correct?        I stated that wrong.

20          You can't give an opinion on value if you didn't

21   give an appraisal to that effect?

22                THE WITNESS:     Correct.
23                THE COURT:     Is that correct?
24                THE WITNESS:     That's correct.
25                THE COURT:     So,   you can't ask him about what

      FEDERAL COURT REPORTERS OF SAN ANTONIO             (210)   340-6464
                                Mowrey - Direct

                                                                         89

 1   the value is today.          The only thing that Mr. Mowrey

 2   can give an opinion on is what the value is of the

 3   property fully developed.               Is that correct,   sir?

 4              THE WITNESS:            Yes,   sir.

 5              THE COURT:            So,   you have -- He's not -- It's

 6   not he's not qualified,            that he doesn't have the

 7   requisite training or skill.                But he -- he can't give

 8   you an -- He can't give an opinion as to value as to

 9   the property as it exists today.                 He's governed by

10   certain ethical            I ' l l use --

11        May I use the word ethical?                 Would that be

12   correct,   sir?

13               THE WITNESS:           Standards.

14               THE COURT:           standards.      And he can't violate

15   those standards as an appraiser.

16               MR.    KAHN:     I    --    I wouldn't -- I wouldn't ask

17   him to.

18               THE COURT:           I know you wouldn't.      But you --

19   you understand the point of why I've intervened.                    You

20   can't -- He can't give an opinion of value as it

21   exists today.

22               MR.    KAHN:     Well ...
23   Q.   (By Mr.      Kahn)     Now,       you -- you --

24               MR.    KAHN:     Well,       that's all the questions I

25   have for him,      your Honor.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                 (210)    340-6464
                                                                           90

 1                THE COURT:       All right.          Thank you.

 2        One moment,      sir.

 3        Do you have any questions of the Witness?

 4                MR.   POWERS:     Your Honor,         just -- a lawyer

 5   always has to ask a         few questions,         just for appearance

 6                THE COURT:       Think about that.

 7                MR.   POWERS:     Okay.

 8                THE COURT:       Think carefully about that.

 9   You -- You can ask questions.

10                MR.   POWERS:     I    have no questions,         your
11   Honor.

12                THE COURT:       Mr.    Thomas,      do you have any

13   questions?

14                MR.   THOMAS:     No,    Judge.
15                THE COURT:       All right.          Then -- With no

16   further questions,         then you don't get a chance to

17   Redirect.

18        May I excuse Mr. Mowrey?

19                MR.   POWERS:     Yes,     your Honor.

20                MR.   THOMAS:     Yes,     your Honor.
21                THE COURT:       Mr.    Kahn?
22                MR.   KAHN:     (Inaudible.)
23                THE COURT:       Mr. Mowrey,         I appreciate your
24   patience,    and thank you for being here.
25                THE WI'l'NESS:        'I'hank you.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                  (210)    340-6464
                                                                        91

 1                THE COURT:       All right.     So,   Mr. Mowrey was

 2   unable to give an opinion because he wasn't asked to

 3   give an opinion of the as-is value of the property.

 4   He can only give a prospective opinion.

 5        As a result,       Mr.   Kahn,   you have not established

 6   what the value of Joabert is -- or -- or Royal Crest

 7   is today.     So,    you do not have a pecuniary interest in

 8   this case.     And as a result,        you don't have standing

 9   to object to the motion to sell.

10        So,    for purposes of the record,            I'm going to make

11   the finding that,       given that the Debtor has not

12   established that there is a value that exceeds the

13   debts in this case,         let alone the debt against Royal

14   Crest property,       that he does not have a pecuniary

15   interest in this motion to sell.

16        So,    I'm going to overrule your objection and

17   grant the motion to sell.

18                MR.    KAHN:     Your Honor?    Your Honor?

19                THE COURT:        We're done.    We're done.       I gave

20   you your chance.        You can't establish

21                MR.    KAHN:     (Indiscernible.)

22                THE COURT:        Don't interrupt me.       Do not
23   interrupt me.        Let me       Let me -- Let me help you out
24   and just tell you this.

25        I have been exceedingly patient this morning.

      FEDERAL COURT REPORTERS OF SAN ANTONIO                (210)   340-6464
                                                                         92

 1   I've afforded you the opportunity to present your

 2   case.     Once you were unable to present that there was

 3   any value that could be established as to the as-is
 4   value of the Royal Crest property today, you don't

 5   have standing to object to the motion to sell.                So,

 6                MR.   KAHN:   Do I    -- Do I have an opportunity

 7   to take the stand myself?

 8                THE COURT:     No.    Because you -- you offered

 9   expert opinion,      and you can't establish the value.

10   I'm not going to let you testify as to what you think

11   the value is because, while a debtor can do that,               the

12   reality is,    I   find that your testimony won't be

13   credible on that point because you have an inflated

14   opinion about what value is that's contradicted by the

15   fact that the appraiser couldn't give any value.

16                MR.   KAHN:   Well,   in      in -- in the

17   pleadings,    17012,   that the         it goes -- it is

18   outlined exactly what -- what the -- the cost -- the

19   value is,    which was approximately $12 million.

20                THE COURT:     I understand that.       And -- And

21   let me -- let me be as precise as I           can.

22           There were three categories of assets the
23   Trustee is seeking to sell this morning:             Shares
24   in Helvetia,

25           Is it Joabert?

      FEDERAL COURT REPORTERS OF SAN ANTONIO              (210)   340-6464
                                                                               93

 1                  MR.   KAHN:    Joabert

 2                  THE COURT:       -- Joabert;    causes of action

 3   that you have filed as the plaintiff,                Mr.   Kahn;    and

 4   then your interest in several business entities.

 5           You acknowledged on the record that,               as to

 6   business entities,           they've either closed,        ceased

 7   operations or have no value.

 8                  MR.   KAHN:    Right.

 9                   THE COURT:      As      As to the causes of

10   action,       all those causes of action,          you've lost,      as

11   the plaintiff,        several matters on appeal.             There is

12   Fifth Circuit precedent that recites,                notwithstanding

13   the pendency of an appeal,              a ruling by a trial court

14   is a final       judgment.      So,    I can ascribe a value to

15   those causes of action,              and I ascribe a value of

16   zero.

17           That leaves only the shares of stock in Helvetia

18   and Joabert -- or Joabert.               Forgive me.       As to

19   Helvetia,       accepting as true your listing of value of

20   your share -- a thousand shares of stock of $685,000,

21   you would still have to demonstrate to the Court that

22   your interest in the other entities,                the Royal Crest
23   property,       when added to that value,          exceeds the amount

24   of debts in this case.               It doesn't.

25           So,    for purposes of the record,          I'm first going

      FEDERAL COURT REPORTERS OF SAN ANTONIO                    (210)   340-6464
                                                                                                    94

                  1   to find that you don't have standing based upon my

                  2   conclusion about value.                 And I'm also going to find

                  3   that your objections are not well taken.

                  4        So,    Mr.    Thomas,    the motion is approved.

                  5                MR.    THOMAS:        Thank you,         Judge.

                  6                THE COURT:           All right.          We're done.

                  7                COURTROOM DEPUTY:              Order in the file?
                  8                THE COURT:           Order -- May I            sign the order in

                  9   the file?

                 10                (Sotto voce exchange.)

                 11                MR.    KAHN:     Your Honor,         I    --

                 12                (Sotto voce exchange.)

                 13                MR.    THOMAS:        I'll let them look at it first,
~
    - --
                 14   your Honor,       you know,       and then ..

                 15                THE COURT:           All right.

                 16                MR.    KAHN:     I    --    I do object,        and I will

                 17   appeal it.

                 18                THE COURT:           Your appeal -- You may -- You

                 19   certainly,    as a litigant,             have the right to appeal.

                 20   And I've explained my reasoning on the record.                          You
                 21   can certainly,       if you want,          have the District Court
                 22   consider the Court's ruling.                 But for purposes of this
                 23   morning,    I've made my decision.

                 24                MR.    KAHN:     Now,      whether

"-.....,_.....
                 25                THE COURT;           We're -- We're done.             When I

                       FEDERAL COURT REPORTERS OF SAN ANTONIO                         (210)   340-6464
                                                                           95

        1   make a ruling,      we're done,    sir.    You're excused.

        2          Ma'am?

        3                COURTROOM DEPUTY:       (Indiscernible?)

        4                THE COURT:      No.   He didn't ask for them to

        5   be admitted.       You may return them to him.

        6          All right.     Thank you.

        7                MR.   POWERS:    Thank you,    your Honor.

        8                COURTROOM DEPUTY:       All rise.

        9                MR.   POWERS:    Thank you for your time.

       10                (Recess.)

       11                       ************

       12
                 I, Court approved transcriber, certify that the
       13   foregoing is a correct transcript from the official
~-
            electronic sound recording of the proceedings in the
       14   abo¥e-entitled matter.
                                     L
       15
            /                                                /- .J-/5
       16 ," Signatl:J,re of Approved Transcriber            Date
            '-._____./
       17

       18   Darla Messina
            Typed or Printed Name
       19

       20

       21

       22

       23

       24

       25
----

                FEDERAL COURT REPORTERS OF SAN ANTONIO         (210)   340-6464
EXHIBIT 5
    file J;d.it l/iev.                             Higor;>. !!<;>9lgn~rks IPPI~ l:!elp
    :: }:': ·:,' ;,.::::::·,: .. : .::·:.:.:,. ;. ' ::·.,' ·-::. ::::'' .. " :_;.:··.:;·::,:,:::,::·::;::.: ::·: ::·.~~,:,.·:::'1;.,.,:,:.H,:•l'··''';,,,,.: .... :.. p.,.,,:"·''"i;'.'''''''''"'''"''•'•''•'' «~"'
:
    1
        i1:((1i~~~~i~~S~!~l~i~~~~?~i1~1I ~tV. a (2 unread) - glentrail - Yah...                          ~~ili[Ll@~it~~~~~i~~~~tutu~ili1~~fill1~~Ll1L~iillE~fl                                            )( \.

                                            ~ttps;//us-rng204.rnaityahoo.com/neo/launch'.rand~cotaptllekb!lg#l454502201              .··'tr: ! .11!11
            il~tl1~~~1i~1i11~~~~ii111" i 1@i~~~;!M1~lf]IM~~1 r8i:1~~~~dr~~1t)i~§~l~~~~~ih~~~:ii;i~~~1i~~~(j11~~~ 1 ~~~~i~:~~~i~
                                                                                      11
             !',:,;. i'J''·'"''i,.,. u·.: ~"""':.:"       -· ._, ··'ii· '''""'''h~·:•,,1>', ___ ,tq :•.:·uv:,~-,·:::.,· .::·;, ,.. ';:·u .. ,,, ,,«:·•.,_ .. ·::::;!'i"':,,.•,:",-rl•''-: .:'::::,iJ•. <·:"' ·:i':<''F"· •;;.,:, .. :·.:; ::.,· : . ,... ,. :":· :1, ••:'1· ·::.·~.,·.;:.,.:11,, -_,.,\«, ·,,i :- •:I,
                                                                                                                                                                                                                                                                                                                          0

        [}f~fls        (3)                                                                         Yahoo Search                                                     What are The Symptoms Psoriatic. Arthritis?
                                                                           41111.·                  ~'.4) ·Sp.()nsored                    v                          Everything you                     hive ever w,:i,ntedto know_about P5ciriatic Ar:thriti-s. All on...
        ~·~t
        5"""1 ciisil                                                              D                Robert Wa:hsmutl                                                  Burt· Kahn's Banb'"uptcy Dear Bob: Thanks. for your pron-ipt respon.se. Yes                                                                                                   800AM

        Trash          (4661                                                     Yesterday
    :~,smart Vlews·-                                                                                                                                                 R~•rt.V~~.1~;;,}~J~;~;:);\ :::r,,~~~t:;~~~..i:°'d~i~hi~ l.;;'.f~~:~r.i;~~·<;e,iit~:'.i:~;~~:_,;~,·.!»'.::                                                                     'Ahct.:;:ii;:        :!y
           llll!i0 i:tanl                                                                  Burt Kahn B•nkruptcy (2)                                                                                                                                                                                                                     [ Pecple [
           ~Or¢~d
                                                                                     1 1
                                                                                  "'' '."  ,J!ijij,,j!i'iif!!llm!ll!f!lh!f!!!!iilihf!/il,lil!i!!Fi!!iE'-!ILFllL!l\H!ljlli!L·Pi.i!l!hii!ll!1-).l ,IL 1.11!.!U!,liil I 1.11 ,J!!(i!i!!J!IUlliH!llftlll!!!l!!!d!!fllll!!!ilil!liiii!!f!!!Jl!i.!*iiiJ!!iip!fi!,!il!!iiiil lllllLl!ll\i!l!iliHl.\/ii!lill!!.!!!H!f l~'r''T..,_

           Starred                                                                         Dear Bob:
           !>~9pl~                                                                         Did you ever get notice of this sale_
           Jfoqal                                                                          Thanks for your prompt response_
           traVel·

                                                                                           Burt

                                                                                           TRUSTEE MOWN•.•. pdf                                                                                 Viei,, Download v
Print                                                                                                      https://us-mg204.mail. yahoo. com/neo/launch? .rand=cotaptl 2ekb8g

          Subject:        RE: Burt Kahn Bankruptcy

          From:           bob@rwwattorneys.com (bob@rwwattorneys.com)

          To:             glentrail@yahoo.com;

          Date:           Monday, August 31, 2015 0:00 PM

         I had notseen this. Is the Trustee selling your cause of action against Robert on the Southside(?) development?

         Robert W. Wachsmuth

         Robert Wachsmuth & Associates

         S\VBC Tower; Suite 707

         9311 San Pedro Ave.

         SanAntonio, Texas 78216

         Telephone: (210) 342-2707

         Facsimile: (210) 342-2701

         Email: bob@rwwauomeys.com

         CONFIDENTIALITY NOTICE: This e-mail and any attachments are for the exclusive and confidential use of the intended
         recipient. If you are not the intended recipient, please do not read, distribute, or take action in reliance upon this message. If you
         h:::i.ve: rf':~e:lve:d this in e:.rrnr, plP.~SP. notify 11s imme:di:::s.tP.ly hy rehirn f':-m~il ::lnd prnmptly rie:lP.tP. this mess~ge: :::i.nrf its ::ltt.::u:hmf':nt~ frnm
         your computer system. We do not waive client-attorney or work product privilege by the transmission of this message.

         From: Burt Kahn [mailto:glentrail@yahoo.com]
         Sent: Monday, August 31, 2015 3:32 PM
         To: bob@rwwattorneys.com
         Subject: Burt Kahn Banlauptcy

         Dear Bob:

         Did you ever get notice of this sale.

         Thanks for your prompt response.

I of 2                                                                                                                                                                     91112015 8:01 AM
Print          https://us-mg204.mail. yahoo.com/neollaunch? .rand=cotaptl 2ekb8g

        Burt

2 of2                                                         9/112015 8:01 AN
EXHIBIT 6
Print                                                                         https://Us-mg204.mail. yahoo.com/neo/launch?.rand~cotaptl 2ekb8g#424 ...

          Subject:    RE: case 14-50980 GAG

          From:       Johnny Thomas (1thomas@prodioY.net)

          To:         glentrail@yahoo.com;

          Cc:         peggyjmorris@prodigy.net;

          Date:       Thursday, March 19, 2015 1:54 PM

         No money can be distributed until your appeal is finished.

         Johnny W. Thomas

         Johnny W. Thomas, Law Offices, P.C.
         1153 East Commerce
         San Antonio, Texas 78205

         210/226-5888

         210/226-608 5 facsimile

         THOMAS LAW OFFICE E-MAIL NOTICE - This transmission may be: (I) subject to the Attorney-Client Privilege, (2) an
         Attorney Work Product, or (3) strictly confidential.If you are not the intended recipient of this message, you may not disclose,
         print, copy or disseminate this information. If you have received this message in error, pleooe reply and notify the oender (only) ond
         delete the message. Unauthorized interceptionofthis e-mail is a violation of federal criminal law.
         210/226-5888

         From: Burt Kahn [mailto:glentrail@yahoo.com]
         Sent: Thursday, March 19, 20151:42PM
         To: Johnny Thomas
         Subject: case 14-50980 CAG

         Dear Mr. Thomas:

         Please send me a copy of the canceled checks you distributed to all my creditors due to the
         $10,000 sale of all my worldly goods and life.

         Thank you

         Burton Kahn

1 of I                                                                                                                                8/31/2015 3:02 AM
EXHIBIT 7
     14-50980-cag Doc#47 Filed 04/29/14 Entered 04/29/14 16:01:59 Main Document Pg 1 of 2

       IT IS HEREBY ADJUDGED and DECREED that the
       below described is SO ORDERED.

       Dated: April 29, 2014.

                                                                            CRAIG A. GARGOTTA
                                                               UNITED STATES BANKRUPTCY JUDGE

                            IN THE UNITED STATES BANKRUPTCY COURT
                               FOR THE WESTERN DISTRICT OF TEXAS
                                      SAN ANTONIO DIVISION

       INRE:                                             §            Chapter 7
                                                         §
       BURTON M KAHN                                     §            Case No. 14-50980-cag
                                                         §
'~                      Debtor.                          §

          ORDER DENYING DEBTOR'S MOTION TO DISQUALIFY PUERTO VERDE LTD
                         TO MAINTAIN A LAWSUIT IN TEXAS
                                [relates to Dkt. No. 30)

                   Came on for hearing on April 24, 2014, the Motion To Disqualify Puerto Verde Ltd.

          to Maintain a Lawsuit in Texas [Dkt, No. 30] (the "Motion") filed by Durton Kahn

          ("Debtor").    The Court heard evidence and considered the arguments of counsel for

          Helvetia, the Chapter 7 trustee, and the Debtor, who appeared pro se. The Court finds that

          good cause exists to deny the Motion; accordingly, it is hereby

                   ORDERED that the Motion is DENIED.

                                                     ###

        S-227467