In re: Coeptis Equity Fund LLC ( 2022 )

FILED
DEC 12 2022
NOT FOR PUBLICATION SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT
In re: BAP Nos. NC-22-1135-GBS
COEPTIS EQUITY FUND LLC, NC-22-1136-GBS
Debtor. NC-22-1138-GBS
(Related Appeals)
COEPTIS EQUITY FUND LLC,
Appellant, Bk. No. 21-30726
v. MEMORANDUM*
JANINA M. HOSKINS, Chapter 7
Trustee; GINA R. KLUMP,
SUBCHAPTER V TRUSTEE,
Appellees.
Appeal from the United States Bankruptcy Court
for the Northern District of California
Dennis Montali, Bankruptcy Judge, Presiding
Before: GAN, BRAND, and SPRAKER, Bankruptcy Judges.
INTRODUCTION
Coeptis Equity Fund LLC (“Debtor”) filed a chapter 111 petition and
elected to proceed under Subchapter V. After an initial status conference
*
This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value, see 9th Cir. BAP Rule 8024-1.
1 Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules
of Bankruptcy Procedure, all “Civil Rule” references are to the Federal Rules of Civil
revealed that Debtor had not maintained insurance on its properties, failed
to file basic first-day motions, and was possibly unable to employ qualified
representation, the bankruptcy court issued an order to show cause why
the Debtor should not be removed as debtor in possession under § 1185(a).
Debtor failed to adequately address the court’s concerns, and the court
entered an order removing Debtor as debtor in possession (the “Removal
Order”).
Pursuant to § 1183(b)(5), Subchapter V Trustee, Gina R. Klump
(“Trustee”), operated the business of the debtor and obtained court
approval to sell two real properties. Debtor failed to file a plan within the
deadline of § 1189(b), and Trustee moved to convert the case to chapter 7.
Debtor opposed conversion on procedural grounds, but after a hearing, the
court entered an order converting the case (the “Conversion Order”).
Debtor then filed motions, under Civil Rule 60(b)(6), made applicable
by Rule 9024, for relief from the Removal Order and the Conversion Order.
Debtor offered no legitimate basis to set aside either order. The bankruptcy
court denied the motions and approved Trustee’s application for
compensation under § 330(a).
In these related appeals, Debtor seeks reversal of the bankruptcy
court’s orders denying its Civil Rule 60(b)(6) motions and the court’s order
approving Trustee’s compensation. Debtor argues that the court lacked
Procedure, and all “BLR” references are to the Bankruptcy Local Rules for the Northern
District of California.
2
authority to remove it as debtor in possession and contravened procedural
rules in converting the case. And, because Debtor believes it was not
legitimately removed as debtor in possession, it argues that Trustee should
not be compensated for her services after Debtor’s removal.
Debtor presents no cogent argument why the court abused its
discretion in denying the Civil Rule 60(b)(6) motions. Debtor’s argument
against allowing Trustee’s compensation is largely predicated on its
erroneous assertion that the court lacked authority to remove Debtor as
debtor in possession. The bankruptcy court did not abuse its discretion; we
AFFIRM.
FACTS 2
A. Debtor’s bankruptcy, removal as debtor in possession, and
conversion to chapter 7
In October 2021, Debtor filed a chapter 11 petition and elected to
proceed under Subchapter V. Debtor’s schedule A/B evidenced ownership
of three residential rental properties: a single-family home in Stockton,
2
Debtor did not file excerpts of record or transcripts of the relevant hearings as
required by Rules 8009 and 8018. As discussed below, an appellant’s failure to provide
a record sufficient to permit us an informed review of the bankruptcy court’s decision is
grounds for dismissal or affirmance for inability to demonstrate error. See Kyle v. Dye (In
re Kyle), 317 B.R. 390, 393 (9th Cir. BAP 2004), aff’d 170 F. App’x 457 (9th Cir. 2006); Hall
v. Whitley, 935 F.2d 164, 165 (9th Cir. 1991); California v. Yun (In re Yun), 476 B.R. 243, 251
(9th Cir. BAP 2012). However, we exercise our discretion to take judicial notice of
documents electronically filed in the bankruptcy case, including the relevant transcripts
where available. See Atwood v. Chase Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227,
233 n.9 (9th Cir. BAP 2003).
3
California (“Stockton Property”), a multi-family home in Daly City,
California (“Daly City Property”), and a single-family home in Denham
Springs, Louisiana (“Denham Springs Property”). Consistent with Debtor’s
election, and pursuant to § 1183(a), the United States Trustee (“UST”)
appointed Trustee to serve as Subchapter V trustee in the case.
Attorney Stratton Barbee filed a related chapter 11 case for Debtor’s
manager, Tyrious Lamont Gates, and also purported to represent Debtor.
Based on events in Mr. Gates’s case, the bankruptcy court issued an order
to show cause regarding Mr. Barbee’s qualification to represent a
Subchapter V debtor and to confirm his admission to appear in the
Northern District of California. After the hearing on the order to show
cause, the bankruptcy court ordered Mr. Barbee to file a substitution of
counsel or an association of co-counsel by November 15, 2021.
At a November 18, 2021 status conference, the bankruptcy court
learned that Debtor had not maintained insurance on its properties, failed
to file basic first-day motions, and was possibly unable to employ qualified
counsel. The court issued an order to show cause why Debtor should not
be removed as debtor in possession pursuant to § 1185(a). It ordered
Debtor and other parties in interest to respond to the order to show cause
by November 29, 2021. The bankruptcy court extended the deadline for Mr.
Barbee to file a substitution of counsel to November 29, 2021, and it
continued the status conference to November 30, 2021.
4
Debtor did not timely respond to the order to show cause and it did
not timely file a substitution of counsel. Trustee filed a response to the
order to show cause stating that Mr. Gates supplied evidence of insurance
for the Daly City Property, proof of expired insurance for the Denham
Springs Property, and no evidence of insurance for the Stockton Property.
Trustee also detailed Debtor’s failure to account for postpetition rents and
noted that at the November 23, 2021 meeting of creditors, Mr. Gates
refused to respond to routine inquiries from the UST. In the response,
Trustee requested Debtor’s removal under § 1185(a).
On December 1, 2021, the bankruptcy court entered the Removal
Order, removing Debtor as debtor in possession and requiring Trustee to
perform the duties provided in § 1183(b), including those specified in
§ 1183(b)(5).
After determining that the estate had equity in the Stockton Property,
Trustee successfully opposed stay relief and obtained court approval to
market and sell the property. 3 Trustee also obtained approval to sell the
Denham Springs Property, and she stipulated with secured creditors for
use of cash collateral, filed monthly operating reports, and communicated
with Debtor’s counsel and the UST about the status of the case.
3
Debtor did not oppose the sale motion but later filed a motion for
reconsideration of the order approving the sale. The bankruptcy court denied the
motion and Debtor did not appeal.
5
On December 13, 2021, Debtor filed a substitution of counsel,
replacing Mr. Barbee with attorney Marc Voisenat. Debtor filed a second
substitution of counsel on April 7, 2022, purporting to replace Mr. Voisenat
with Mr. Barbee. By its own terms, the second motion to substitute
required court approval, and Debtor set a hearing on the motion for May 6,
2022. Mr. Voisenat filed a statement of non-opposition, and on May 3, 2022,
the court entered an order granting substitution of counsel and vacating
the hearing. Consequently, Mr. Voisenat remained counsel of record until
May 3, 2022.
On April 15, 2022, Trustee filed a motion to convert the case to
chapter 7. She argued that cause existed to convert under § 1112(b) because
Debtor lacked the means to reorganize, failed to propose a plan within the
deadline of § 1189(b), and had no reasonable likelihood of rehabilitation.
Trustee noted that Mr. Gates refused to cooperate with Trustee and,
though he appeared at three separate meetings of creditors, he was
instructed by Mr. Barbee not to answer basic questions or respond to
requests for information. Mr. Gates also refused to turn over postpetition
rents and refused to produce Debtor’s bank statements. Trustee argued
that conversion was in the best interests of creditors because it would allow
for an orderly liquidation and distribution to creditors.
On behalf of Debtor, Mr. Barbee filed an objection to the motion to
convert on April 29, 2022. He argued that Trustee did not properly serve
the conversion motion on Debtor until April 28, 2022, which violated BLR
6
9014-1(c). He also asserted that the relief sought by Trustee was governed
by BLR 9014-1(c)(1), which required the movant to file and serve the
motion and notice of hearing at least 28 days prior to the hearing. Mr.
Barbee did not make any substantive argument against conversion. After a
hearing on May 6, 2022, the bankruptcy court entered the Conversion
Order.
B. Debtor’s motions for relief from the orders
After the court converted the case, Debtor filed motions pursuant to
Civil Rule 60(b)(6) for relief from the Removal Order and the Conversion
Order.
Regarding the Removal Order, Debtor argued that relief was
warranted because § 1185(a) requires a party in interest to request removal.
Debtor asserted that because the bankruptcy court acted sua sponte, it was
not properly removed as debtor in possession.
Chapter 7 trustee, Janina M. Hoskins (“Chapter 7 Trustee”) opposed
the motion and cited § 105(a) as the basis of the court’s authority to take
any action required to be raised by a party in interest. She further argued
that Debtor had adequate notice and opportunity to address the order to
show cause but failed timely to do so.
In reply, Debtor claimed that § 105(a) did not give the court authority
to remove Debtor as debtor in possession because § 105(b) prohibits the
court from appointing a receiver. Debtor argued that Trustee was a
receiver based on the definition of “receiver” cited in FTC v. World Wide
7
Factors, Ltd., 882 F.2d 344, 348 (9th Cir. 1989) as “one who takes possession
of and preserves, pendente lite, and for the benefit of the party ultimately
entitled to it, the fund or property in litigation.”
Regarding the Conversion Order, Debtor argued that relief was
warranted because Trustee did not properly serve the motion and did not
provide adequate notice of the hearing. Debtor disputed Trustee’s
contention that 21-days’ notice was sufficient, and argued it was entitled to
28-days’ notice under BLR 9014-1(c). Debtor maintained that because
Trustee did not attach the conversion motion to the notice of hearing,
Debtor did not have notice of the motion until eight days before the
hearing.
In response, Chapter 7 Trustee pointed out that Trustee timely served
the motion to convert on Mr. Voisenat, Debtor’s counsel of record at the
time, and that Debtor did not present any substantive reason why the case
should not have been converted.
Debtor filed a reply and asserted, erroneously, that Mr. Barbee was
substituted as counsel on April 7, 2022. Debtor also argued, for the first
time, that the case should not have been converted. Debtor suggested that
its failure to obtain insurance was not “gross mismanagement” and it
stated that Mr. Gates agreed to answer questions after Mr. Voisenat became
counsel of record and never refused to turn over rents or to produce bank
statements.
8
On June 10, 2022, the bankruptcy court held a hearing on both
motions. The court rejected Debtor’s argument that it lacked authority to
remove Debtor as debtor in possession and noted that Trustee also
requested removal under § 1185(a). The court reasoned that Debtor did not
make any substantive argument why the Conversion Order should be
vacated, and it previously considered and rejected Debtor’s procedural
arguments. The court specifically held that notice and service were proper,
and it entered orders denying both motions. Debtor timely appealed.
C. Trustee’s fee application
After the court converted the case, Trustee filed an application for
allowance of compensation under § 330(a). Trustee stated that she incurred
fees and expenses of $21,825 in performing her duties under § 1183(b),
including the additional responsibilities required of a Subchapter V trustee
in a case where a debtor ceases to be a debtor in possession. Trustee
voluntarily reduced her fees and sought total compensation of $18,000.
Chapter 7 Trustee filed a notice of non-opposition to allowance of Trustee’s
fees.
Debtor objected to Trustee’s fee application and argued that because
the bankruptcy court improperly removed Debtor as debtor in possession,
Trustee should not be compensated for acts performed after Debtor’s
removal. Debtor also opposed compensation for Trustee’s efforts to sell
assets because Debtor believed the Stockton Property sold for $100,000 less
9
than its true value and “there was no good reason” to sell the Denham
Springs Property.
After a hearing, the bankruptcy court entered an order allowing
Trustee’s fees and expenses in the total amount of $18,000. Debtor timely
appealed.
JURISDICTION
The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and
157(b)(2)(A) and (B). Subject to our discussion below, we have jurisdiction
under 28 U.S.C. § 158.
ISSUES
Did the bankruptcy court abuse its discretion by denying Debtor’s
motion for relief from the Removal Order?
Did the bankruptcy court abuse its discretion by entering the
Conversion Order or by denying Debtor’s motion for relief from that
order?
Did the bankruptcy court abuse its discretion by approving Trustee’s
fee application?
STANDARDS OF REVIEW
We review for an abuse of discretion the bankruptcy court’s denial of
a motion for reconsideration and its decision to convert a case to chapter 7.
Carruth v. Eutsler (In re Eutsler), 585 B.R. 231, 235 (9th Cir. BAP 2017);
Pioneer Liquidating Corp. v. U.S. Tr. (In re Consol. Pioneer Mortg. Entities), 264
F.3d 803, 806 (9th Cir. 2001). We also review a bankruptcy court’s order
10
awarding compensation under § 330(a) for abuse of discretion. Hopkins v.
Asset Acceptance LLC (In re Salgado-Nava), 473 B.R. 911, 915 (9th Cir. BAP
2012).
A bankruptcy court abuses its discretion if it applies an incorrect
legal standard or its factual findings are illogical, implausible, or without
support in the record. TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 832
(9th Cir. 2011).
DISCUSSION
As an initial matter, we clarify the scope of these appeals. An appeal
from an order denying a motion under Civil Rule 60(b) allows us to review
only the correctness of that denial; it does not bring up for review the
underlying order. Tennant v. Rojas (In re Tennant), 318 B.R. 860, 866 (9th Cir.
BAP 2004). But if a party files a Civil Rule 60(b) motion within 14 days of
entry of the underlying order, the time to appeal runs from entry of the
order disposing of the Civil Rule 60(b) motion, and a timely appeal give us
jurisdiction to review both orders. See Wall St. Plaza, LLC v. JSJF Corp. (In re
JSJF Corp.), 344 B.R. 94, 99 (9th Cir. BAP 2006); Rule 8002(b).
Debtor filed its motion for relief from the Removal Order
approximately five months after entry of the underlying order.
Consequently, we have jurisdiction to review only the order denying the
Civil Rule 60(b)(6) motion. But, because Debtor filed its motion for relief
from the Conversion Order within a week of conversion, we have
jurisdiction to review both orders pertaining to conversion.
11
Debtor filed a single notice of appeal and designated and attached
only the orders denying its Civil Rule 60(b)(6) motions and the order
approving Trustee’s fee application.4 Debtor did not attach the Conversion
Order as required by BAP Local Rule 8003(a)-1. But because both parties
address the merits of the Conversion Order, and we may depart from our
local rules absent prejudice, In re JSJF Corp., 344 B.R. at 100, we will
consider both the bankruptcy court’s order denying the Civil Rule 60(b)
motion and the underlying Conversion Order. See United States v. Arkison
(In re Cascade Rds., Inc.), 34 F.3d 756, 761 (9th Cir. 1994).
A. The bankruptcy court did not abuse its discretion by denying
Debtor’s motion for relief from the Removal Order.
Civil Rule 60(b)(6) permits relief from an order “for any other reason
that justifies relief.” Debtor argues that the bankruptcy court should have
vacated the Removal Order because § 1185(a) requires a party in interest to
request removal and the court exceeded its authority by acting sua sponte.
Civil Rule 60(b)(6) should be applied “sparingly as an equitable
remedy to prevent manifest injustice . . . only where extraordinary
circumstances prevented a party from taking timely action to prevent or
correct an erroneous judgment.” United States v. Alpine Land & Reservoir Co.,
984 F.2d 1047, 1049 (9th Cir. 1993). “Ninth Circuit decisions have settled
that [Civil] Rule 60(b) is not a substitute avenue for appeal[.]” Atkins v.
4
Debtor’s notice of appeal also included the order confirming abandonment of
the Daly City Property. That appeal was subsequently dismissed.
12
Fiberglass Representatives, Inc. (In re Atkins), 134 B.R. 936, 939 (9th Cir. BAP
1992). The party seeking relief under Civil Rule 60(b)(6) “must demonstrate
both injury and circumstances beyond its control that prevented it from
proceeding with the prosecution or defense of the action in a proper
fashion.” Kenny G. Enters., LLC v. Casey (In re Kenny G. Enters., LLC), BAP
No. CC-13-1527-KiTaPa, 2014 WL 4100429, at *15 (citing Cmty. Dental Servs.
v. Tani, 282 F.3d 1164, 1168 (9th Cir. 2002)).
Debtor does not articulate any extraordinary circumstances that
prevented it from raising the issue of the court’s authority until five
months after entry of the Removal Order. Debtor had sufficient notice of
the court’s intent to remove it as debtor in possession but did not timely
file a response to the order to show cause. Debtor did not argue the court
lacked authority, or even that removal was not warranted. Debtor did not
appeal the Removal Order, and it cannot use Civil Rule 60(b)(6) as a
substitute for a timely appeal.
Moreover, Debtor’s argument that the court lacked authority is
completely baseless. Section 105(a) plainly states:
No provision of this title providing for the raising of an issue by
a party in interest shall be construed to preclude the court from,
sua sponte, taking any action or making any determination
necessary or appropriate to enforce or implement court orders
or rules, or to prevent an abuse of process.
Debtor attempts to avert the clear grant of authority by claiming Trustee is
a “receiver,” and pursuant to § 105(b), the bankruptcy court was prohibited
13
from appointing Trustee as a receiver. Debtor offers no support for its
claim that Trustee is a receiver or that Trustee was appointed by the
bankruptcy court.
Trustee is not a receiver. She was appointed by the UST—not the
bankruptcy court—pursuant to § 1183(a), and her duties and loyalties are
statutorily defined by the Bankruptcy Code. See 11 U.S.C. §§ 1183, 323(a);
see also Kosmala v. Baek (In re Halvorson), 607 B.R. 680, 685 (Bankr. C.D. Cal.
2019) (“Bankruptcy trustees and receivers have very different roles, duties
and loyalties. A bankruptcy trustee is the representative of the estate. A
receiver, on the other hand, is appointed by the court as a representative of
the court . . .” (citations and emphasis omitted)). After the bankruptcy court
removed Debtor as debtor in possession, Trustee acquired additional
responsibilities by operation of law. See 11 U.S.C. § 1183(b)(5). The
bankruptcy court was not prohibited by § 105(b) from removing Debtor as
debtor in possession.
The bankruptcy court correctly rejected Debtor’s argument about its
authority to remove Debtor as debtor in possession, and it did not abuse its
discretion by denying the Civil Rule 60(b)(6) motion.
B. The bankruptcy court did not abuse its discretion by converting the
case or by denying relief from the Conversion Order.
Debtor argues that the court erred by converting the case because
Trustee did not provide adequate notice of the hearing or service of the
14
motion to convert, and conversion was not in the best interest of creditors
and the estate.
Debtor’s opposition to Trustee’s conversion motion was based solely
on lack of notice and inadequate service. Debtor claimed that it did not
receive the motion until eight days prior to the hearing and notice of the
hearing should have been made 28 days prior to the hearing under BLR
9014-1(c)(1). The bankruptcy court considered and rejected Debtor’s
arguments for the reasons stated on the record at the May 6, 2022 hearing.
Debtor did not provide a transcript of that hearing as required by
Rule 8009(b)(5) and the transcript is not available on the bankruptcy court’s
docket. An appellant’s failure to provide a record sufficient to permit us an
informed review of the bankruptcy court’s decision is grounds for
dismissal or affirmance for inability to demonstrate error. See In re Yun, 476
B.R. 243 at 251 (“The [Appellant’s] complete disregard of Rule 8009(b) in
itself constitutes a basis to dismiss this appeal or summarily affirm the
bankruptcy court’s decision.”). We may affirm for Debtor’s inability to
demonstrate error, but additionally, Debtor’s argument is directly refuted
by the record.
On April 15, 2022, Trustee electronically served the motion on Mr.
Voisenat. Pursuant to BLR 9013-1, electronic service of the motion on Mr.
Voisenat constituted effective service on Debtor. The same day, Trustee
electronically served notice of the hearing on Mr. Voisenat and mailed
notice to Mr. Gates and Mr. Barbee. Mr. Voisenat was Debtor’s counsel of
15
record until the court approved the substitution of Mr. Barbee on May 6,
2022. Thus, service was proper.
Debtor’s argument that it was entitled to 28-days’ notice of the
hearing is similarly unavailing. Rule 2002(a)(4) requires a minimum of 21-
days’ notice of a hearing on a motion to convert a chapter 11 case. BLR
9014-1(c) mandates 28-days’ notice under certain circumstances but
requires only 21-days’ notice where “relief is sought generally.”
We agree with the bankruptcy court that a motion to convert is a
general motion that can be filed by a trustee, a debtor, or any other
interested party for the sake of efficient administration. But even if the local
rule required additional time, “[t]he bankruptcy court has broad discretion
to apply its local rules strictly or to overlook any transgressions.” Nunez v.
Nunez (In re Nunez), 196 B.R. 150, 157 (9th Cir. BAP 1996). Debtor had
sufficient notice to satisfy due process; it filed an objection, and it appeared
at the hearing. Debtor has not identified any argument or evidence it was
prevented from presenting to the bankruptcy court at the hearing, and we
find no abuse of discretion by the bankruptcy court in entering the
Conversion Order.
In its Civil Rule 60(b)(6) motion, Debtor made the same procedural
complaint that it made in opposition to the Conversion Order. Debtor
made no substantive argument against conversion until its reply.5 Thus,
5
In its reply, Debtor did not dispute the existence of cause to dismiss or convert
under § 1112(b). Instead, it focused its argument on Trustee’s alleged improper motive
16
Debtor did not demonstrate extraordinary circumstances to justify relief
under Civil Rule 60(b)(6). 6
Debtor has not shown an abuse of discretion by the bankruptcy court
in converting the case or in denying its motion for relief from the
Conversion Order.
C. The bankruptcy court did not abuse its discretion by approving
Trustee’s fee application.
Pursuant to § 330(a)(1), after notice and a hearing, the bankruptcy
court may award a trustee “reasonable compensation for actual, necessary
services rendered by the trustee . . . and reimbursement for actual,
necessary expenses.” In awarding compensation, the bankruptcy court
must consider the nature, extent, and value of the services, considering
in converting the case to receive compensation for her services. At oral argument,
Debtor argued that Trustee had no basis to seek conversion and claimed there was no
cause to convert the case because the deadline to file a plan had not passed. Again,
Debtor’s argument is belied by the record. Pursuant to § 1189(a), only the debtor may
file a plan under Subchapter V, and pursuant to § 1189(b), it must do so not later than
90 days after the order for relief, unless the court extends the deadline. The record is
clear that Debtor did not file a plan, and the docket does not evidence any extension of
the deadline by the bankruptcy court.
6 Though the bankruptcy court could construe a motion for reconsideration filed
within 14 days of the Conversion Order as a motion to alter or amend judgment under
Civil Rule 59(e) and Rule 9023, such a motion should not be granted unless the court is
presented with newly discovered evidence, committed clear error, or if there has been
an intervening change in the controlling law. 389 Orange St. Partners v. Arnold, 179 F.3d
656, 665 (9th Cir. 1999). A party may not use a Civil Rule 59(e) motion to present a new
legal theory for the first time, to raise legal arguments which could have been made in
connection with the original motion, or to rehash the same arguments already
presented. In re JSJF Corp., 344 B.R. at 103.
17
criteria listed in the statute. 11 U.S.C. § 330(a)(3). The court may not award
fees for unnecessary duplication of effort or for services that were not
reasonably likely to benefit the estate or were unnecessary for case
administration. 11 U.S.C. § 330(a)(4).
A party objecting to an application for compensation under § 330(a)
has the burden to show that fees are unreasonable and must do more than
express general dissatisfaction with the application; it must specify what
tasks are objectionable. Koncicky v. Peterson (In re Koncicky), BAP No. WW-
07-1170-MkPaJ, 2007 WL 7540997, at *4 (9th Cir. BAP Oct. 19, 2007); 3
COLLIER ON BANKRUPTCY ¶ 330.03 [5][d] (Alan N. Resnick & Henry J.
Sommer, eds. 16th ed. rev. 2021)).
On appeal, Debtor contends that Trustee should not be compensated
for actions taken after entry of the Removal Order and should not be
compensated for her efforts to sell the Stockton Property or the Denham
Springs Property because Debtor believes it was harmed by the sales.
Additionally, Debtor claims that Trustee unnecessarily moved to convert
the case and it accuses her of making false allegations and disingenuous
arguments in support of the motion. Debtor has not shown an abuse of
discretion in allowing Trustee’s fees.7
7
The bankruptcy court entered an order approving Trustee’s fee application and
overruling Debtor’s objection after the June 16, 2022 hearing. Debtor did not provide a
transcript of that hearing, as required by Rule 8009(b)(5), which constitutes grounds for
affirmance based on Debtor’s inability to demonstrate error. In re Kyle, 317 B.R. at 393;
Hall, 935 F.2d at 165; In re Yun, 476 B.R. at 251.
18
As explained above, the court had clear authority to enter the
Removal Order. Trustee’s duties are mandated by statute, including the
additional duties under § 1183(b)(5), in cases where a debtor ceases to be a
debtor in possession. And while Debtor disagreed with Trustee’s decision
to sell estate assets and her decision to seek conversion, Debtor’s
disagreement is not a sufficient basis to deny or reduce Trustee’s fees.
In opposing the fee application, Debtor must demonstrate that
Trustee’s actions were unnecessary or not reasonably likely to benefit the
estate. But it merely claims that Trustee should have sold the Stockton
Property for a higher price and should not have sought to sell the Denham
Springs Property. Debtor unsuccessfully opposed the sale motions and did
not appeal the orders. Debtor has not shown that Trustee’s efforts to
liquidate the assets or convert the case were unnecessary or not reasonably
likely to benefit the estate.
CONCLUSION
Based on the foregoing, we AFFIRM the bankruptcy court’s orders:
(1) denying Debtor’s motion for relief from the Removal Order;
(2) converting the case; (3) denying Debtor’s motion for relief from the
Conversion Order; and (4) approving Trustee’s fee application.
19