Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

In re Gens

United States District Court, N.D. California, San Jose Division

June 27, 2017

IN RE LAURA GENS, Debtor.

          ORDER DENYING DEBTOR'S MOTION FOR STAY PENDING APPEAL [RE: ECF 19]

          BETH LABSON FREEMAN United States District Judge.

         Debtor Laura Gens appeals the bankruptcy court's order converting her Chapter 11 case to a Chapter 7 case. See Notice of Appeal, ECF 1-1. After unsuccessfully moving for a stay pending appeal in the bankruptcy court, see Order Denying Debtor's Motion for Stay Pending Appeal, ECF 20-18, Debtor filed a motion for a stay in this Court with a noticed hearing date of September 28, 2017, see Debtor's Motion for Stay, ECF 19. The motion is opposed by secured creditor Wells Fargo Bank, N.A. (“Wells Fargo”) and the Chapter 7 Trustee, who joins in Wells Fargo's opposition. See Wells Fargo's Opp., ECF 21; Trustee's Joinder in Opp., ECF 25. Because it was concerned that Debtor's home might be sold prior to the noticed hearing date, the Court sua sponte reset the hearing date to June 1, 2017. See Order Resetting Hearing Date, ECF 31.

         At the hearing, the Court clarified that its review of the bankruptcy court's denial of a stay is limited to determining whether the bankruptcy court abused its discretion. After hearing argument, the Court stated its conclusion that the bankruptcy court had applied the correct legal standard; the bankruptcy court's factual findings were adequately supported by the record; and the bankruptcy court's denial of a stay was not an abuse of discretion. The Court stated on the record that it would not grant a stay and advised the parties that it was informing them of its ruling at the time of the hearing due to time constraints regarding a possible sale of the property and because the Court likely would not be able to issue a written order for several weeks. This written order is intended to explain more fully the Court's reasoning for its denial of Debtor's motion.

         I. BACKGROUND

         Debtor has filed four bankruptcy cases in the past seven years, which among other things has prevented Wells Fargo from foreclosing on her home. See Transcript of BR Proceedings 1/25/2017, ECF 20-23. The bankruptcy court summarized those proceedings at a January 25, 2017 hearing on Wells Fargo's Motion to Dismiss Case or Convert Case to Chapter 7. See id. Debtor has had a long-running dispute with Wells Fargo over a loan secured by Debtor's multi-million dollar home in Palo Alto, California. See id.

         Debtor's first bankruptcy, Case No. 10-br-55305, was filed in May 2010 and dismissed in June 2012 based on the bankruptcy court's determination that Debtor could not file or confirm a plan. Transcript of BR Proceedings 1/25/2017 at 20, ECF 20-23. Her second bankruptcy, Case No. 12-br-56055, was filed in August 2012 and dismissed voluntarily in October 2012. Id. Her third bankruptcy, Case No. 13-br-30106, was filed in January 2013 and dismissed in May 2015 when it was reassigned to a new bankruptcy judge with no plan confirmed. Id. Her fourth bankruptcy (from which the present appeal arises), Case No. 15-br-53562, was filed in November 2015 and converted to a Chapter 7 case by order dated February 1, 2017. Id.; Order Granting Wells Fargo's Motion to Dismiss or Convert Case to Chapter 7, ECF 1-1.

         The bankruptcy court concluded that cause existed under 11 U.S.C. § 1112(b) to convert or dismiss the case, and that conversion rather than dismissal was in the best interest of the creditors and the estate. See Order Granting Wells Fargo's Motion to Dismiss or Convert Case to Chapter 7, ECF 1-1. On the issue of cause, the bankruptcy court noted on the record that Debtor did not dispute that her Chapter 11 case should be resolved, but instead requested dismissal rather than conversion. Transcript of BR Proceedings 1/25/2017 at 20, ECF 20-23. The bankruptcy court took Debtor's position as a concession that cause existed under § 1112(b). Id. at 20-21. Separate and apart from Debtor's concession, the bankruptcy court concluded that cause existed based on Debtor's bad faith in abusing the bankruptcy process, as evidenced by Debtor's submission of fraudulent documents regarding the financial resources of her husband, Timothy Gens; Timothy Gens' refusal to cooperate with Wells Fargo's efforts to take discovery regarding his financial resources; Debtor's overestimation of her own income and underestimation of her expenses; and Debtor's persistence in objecting to Wells Fargo's claim despite an order overruling that objection. Id. at 21-30.

         On the issue of conversion versus dismissal, the bankruptcy court concluded that conversion was in the best interest of the creditors, because Debtor was a serial filer and likely would simply file a fifth bankruptcy upon dismissal of her fourth case. Id. 31-32. The bankruptcy court found that conversion to Chapter 7 would result in all creditors being paid more quickly than if Debtor continued with her efforts to confirm a Chapter 11 plan. Id. at 32. Finally, the Court found that requiring Wells Fargo to wait longer for payment would be inherently unfair given Debtor's conduct to date. Id. at 33.

         Debtor appealed the bankruptcy court's order converting the Chapter 11 case to a Chapter 7 case. She now seeks a stay of that order pending appeal.

         II. LEGAL STANDARD

         A motion for a stay pending appeal ordinarily must be brought in the bankruptcy court in the first instance. Fed.R.Bankr.P. 8007(a). If a party moves for such relief in the district court, “[t]he motion must: (A) show that moving first in the bankruptcy court would be impracticable; or (B) if a motion was made in the bankruptcy court, either state that the court has not yet ruled on the motion, or state that the court has ruled and set out any reasons given for the ruling.” Fed.R.Bankr.P. 8007(b)(2).

         Where the bankruptcy court has denied a motion for a stay pending appeal, the district court may grant a stay only if it determines that the bankruptcy court's denial was an abuse of discretion. See In re Wymer, 5 B.R. 802, 808 (9th Cir. B.A.P. 1980) (“It is . . . important to the properly functioning bankruptcy court that the trial judge's rulings on stays pending appeal be disturbed only in the event of error or abuse of discretion.”); In re North Plaza, LLC, 395 B.R. 113, 119 (S.D. Cal. 2008) (“Where the bankruptcy court has already denied a stay . . . the appellate court's review is limited to a simple determination of whether the bankruptcy court abused its discretion.”). “The abuse of discretion standard on review of the bankruptcy court's order denying a stay encompasses a de novo review of the law and a clearly erroneous review of the facts with respect to the underlying issues.” In re North Plaza, 395 B.R. at 119.

         III. DISCUSSION

         A. Debtor ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.