In re: ik/s-bar, LLC

• Court: United States Bankruptcy Appellate Panel for the Ninth Circuit
• Decided: October 6, 2011
• Docket: CC-11-1165-PaDKi
• Status: Unpublished

Opinion

FILED OCT 06 2011 1 SUSAN M SPRAUL, CLERK U.S. BKCY. APP. PANEL 2 OF THE NINTH CIRCUIT

3 UNITED STATES BANKRUPTCY APPELLATE PANEL 4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. CC-11-1165-PaDKi ) 6 IK/S-BAR, LLC, ) Bk. No. LA 10-64247-VZ Debtor. ) 7 ________________________________) ) 8 IK/S-BAR, LLC, ) ) 9 Appellant, ) ) 10 v. ) M E M O R A N D U M* ) 11 DIRECT CAPITAL CORPORATION, ) ) 12 Appellee. ) ________________________________) 13 Argued and Submitted at Pasadena, California 14 on September 23, 2011 15 Filed – October 6, 2011 16 Appeal from the United States Bankruptcy Court for the Central District of California 17 Honorable Vincent Zurzolo, Bankruptcy Judge, Presiding 18 ____________________________ 19 Appearances: Michael Sanford Kogan Esq. of Ervin, Cohen & Jessup LLP appeared for appellant IK/S-Bar, LLC. 20 No appearance for appellee Direct Capital Corporation. 21 ____________________________ 22 Before: PAPPAS, DUNN and KIRSCHER, Bankruptcy Judges. 23 24 25 26 * This disposition is not appropriate for publication. 27 Although it may be cited for whatever persuasive value it may have (see Fed. R. App. P. 32.1), it has no precedential value. 28 See 9th Cir. BAP Rule 8013-1. 1 Appellant, chapter 111 debtor in possession IK/S-Bar, LLC 2 (“IK/S”), appeals the bankruptcy court’s order granting the 3 motion of appellee Direct Capital Corporation (“Direct Capital”) 4 for relief from the automatic stay to enforce its rights under an 5 equipment lease. We AFFIRM. 6 FACTS 7 IK/S filed for protection under chapter 11 of the Bankruptcy 8 Code on December 21, 2010, and has, since then, continued to 9 operate its business as a debtor in possession. 10 IK/S is managed by its Managing Member, Ivan Kane (“Kane”), 11 an entrepreneur who is the principal of several other restaurant- 12 related corporations and businesses. In 2008, two of Kane’s 13 controlled corporations, Ivan Kane Enterprises, Inc. and The Gin 14 Joint, LLC (the “Original Lessees”), entered into an Equipment 15 Lease Agreement (the “Lease”) with Capital Network Leasing Corp. 16 (“Capital Network”) pertaining to certain audio and kitchen 17 equipment. Kane signed the Lease for both of the Original 18 Lessees as their President. The Lease required the Original 19 Lessees to make monthly lease payments, and took effect on May 1, 20 2008, with the signature of Capital Network’s authorized 21 representative. There is no reference in the Lease to IK/S. 22 The Lease contains several provisions relevant in this 23 dispute: Paragraphs 3 and 6 deal with choice of law, and provide 24 that the Lease shall be interpreted under the laws of the State 25 1 26 Unless specified otherwise, all chapter and section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532, and 27 all “Rule” references are to the Federal Rules of Bankruptcy Procedure, Rules 1001-9037. All “Civil Rule” references are to 28 the Federal Rules of Civil Procedure.

2 1 of New Hampshire;2 Paragraph 4 prohibits assignment of the Lease 2 by the Original Lessees without first obtaining Capital Network’s 3 written consent; and Paragraph 24 prohibits waiver of any of 4 Capital Network’s rights under the Lease absent its prior written 5 consent. 6 Sometime in 2008, Kane purportedly assigned all rights and 7 obligations of the Original Lessees to IK/S with an effective 8 date of March 18, 2008. ER at 78-80. There is no evidence in 9 the record that IK/S, Kane or the Original Lessees ever notified 10 Capital Network of the purported assignment of the Lease to IK/S. 11 Capital Network assigned its rights as lessor under the 12 Lease to Direct Capital on May 1, 2008; this assignment was 13 acknowledged in writing by Kane. Direct Capital’s principal 14 place of business is 155 Commerce Way, Portsmouth, New Hampshire. 15 After IK/S’s bankruptcy filing, Direct Capital filed a 16 motion for relief from the automatic stay on February 3, 2011, 17 seeking an order authorizing it to enforce its rights under the 18 Lease and, presumably, to recover possession of the equipment 19 from IK/S. As grounds for relief under § 362(d)(1), Direct 20 Capital alleged that its interest in the equipment was not 21 22 2 Paragraph 3 states that the Lease is intended to be a 23 Statutory Finance Lease under the laws of New Hampshire. Paragraph 6 states that the parties agree that the Lease should 24 be interpreted according to the laws of the state of the Lessor’s principal place of business, or, if assigned, the Lessor’s 25 assignee’s principal place of business. Because the parties have 26 raised no such issue, we express no opinion concerning whether the Lease, under applicable state law, is indeed a “true lease” 27 which must be assumed or rejected in the bankruptcy case by IK/S under § 365, or whether the Lease may be treated as a financing 28 arrangement, and its terms restructured via a chapter 11 plan.

3 1 adequately protected, and that the fair market value of the 2 leased equipment was declining. Under § 362(d)(2)(A) and (B), 3 Direct Capital argued that IK/S had no interest in the leased 4 equipment, and that it was not necessary for an effective 5 reorganization. It appears undisputed that there had been no 6 payments made to Direct Capital on the Lease by any party in the 7 eight months before the filing of the stay relief motion. The 8 motion was supported by a declaration of Direct Capital’s 9 Collections Supervisor, Ryan Hodsdon. 10 IK/S filed an opposition to this motion on February 11, 11 2011. In its opposition, IK/S argued that the stay relief motion 12 should be denied because IK/S had equity in the equipment; the 13 equipment was critical to IK/S’s reorganization efforts; and 14 Direct Capital was seeking to place its interests ahead of other 15 secured creditors, and that the value of IK/S’s assets would be 16 enhanced by continuing as a going concern, something it could not 17 do without the equipment. The opposition was supported by the 18 declaration of Ivan Kane. 19 The bankruptcy court conducted a hearing on Direct Capital’s 20 motion for relief from stay on March 8, 20113 at which counsel 21 for IK/S and Direct Capital appeared. Direct Capital’s attorney 22 argued that the Lease was not an asset of the IK/S bankruptcy 23 estate, noting that it had not been signed by IK/S, and that the 24 3 IK/S provided the Panel with a partial transcript of the 25 March 8, 2010 hearing, including only the bankruptcy court’s oral 26 findings and decision announced at the end of the hearing. The Panel has elected to review the full transcript of the hearing 27 found in the bankruptcy court’s docket. O’Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 958 (9th Cir. 28 1989).

4 1 Lease prohibited any assignment by the Original Lessees. Direct 2 Capital’s lawyer next noted that no payments had been made by any 3 party for the previous nine months. 4 IK/S’s attorney responded that all relevant issues had been 5 addressed in its opposition. Counsel’s sole comment concerning 6 Direct Capital’s argument that the Lease was not property of IK/S 7 was: 8 One other fact that — the issue that was raised a number of times about [the equipment] not being 9 property of the estate, [§] 541 is very clear that this is — that a lease is property of the estate. The 10 Debtor has an equitable certainly interest in the lease and the use of the equipment. 11 12 Hr’g Tr. 4:16-21, March 8, 2011. 13 After considering the record and the arguments of counsel, 14 the bankruptcy judge announced his findings and decision on the 15 record. The court focused on whether the Lease was property of 16 the bankruptcy estate: 17 The moving party has sought relief from stay on two grounds. The two that I find most pertinent are as 18 follows: The moving party has given me evidence which is not controverted by the Debtor that the property [] 19 is subject to a lease and that the lease was made between the moving party and another entity and that 20 there is a provision in the lease that prohibits assignment of rights under the lease without the 21 consent of the lessor. 22 This is not contradicted by [IK/S]. And that in and of itself would constitute cause to grant relief from stay 23 under (d)(1). 24 Hr’g Tr. 5:24—6:10. 25 The bankruptcy court also noted, as a second reason for its 26 decision, that no lease payments had been made. The court 27 acknowledged that if a lessor accepts payments from a party other 28 than the lessee which is in possession of the property subject to

5 1 a lease, an argument could be made “not always, but sometimes” 2 that the lessor had waived the anti-assignment provision in the 3 lease. Hr’g Tr. 6:11-17. However, the bankruptcy court did not 4 find that such a waiver had occurred in this case. Instead, the 5 bankruptcy court concluded that Direct Capital had satisfied its 6 burden under § 362(d)(1) of showing “cause” and granted relief 7 from stay. It did not address Direct Capital’s claim for relief 8 under § 362(d)(2). 9 The bankruptcy court entered its order granting Direct 10 Capital’s motion for relief from the automatic stay on April 8, 11 2011. IK/S filed a timely appeal on April 12, 2011. 12 JURISDICTION 13 The bankruptcy court had jurisdiction under 28 U.S.C. § 1334 14 and 157(b)(2)(G). We have jurisdiction under 28 U.S.C. § 158. 15 ISSUE 16 Whether the bankruptcy court abused its discretion in 17 granting relief from stay to Direct Capital under § 362(d)(1)? 18 STANDARD OF REVIEW 19 An order granting relief from the automatic stay is reviewed 20 for abuse of discretion. Kronemyer v. Am. Contractors Indem. 21 Co. (In re Kronemyer), 405 B.R. 915, 919 (9th Cir. BAP 2009). In 22 applying the abuse of discretion standard, we first "determine de 23 novo whether the [bankruptcy] court identified the correct legal 24 rule to apply to the relief requested." United States v. 25 Hinkson, 585 F.3d 1247, 1262 (9th Cir. 2009) (en banc). If the 26 correct legal rule was applied, we then consider whether its 27 "application of the correct legal standard was (1) illogical, 28 (2) implausible, or (3) without support in inferences that may be

6 1 drawn from the facts in the record." Id. Only in the event that 2 one or more of these three apply are we then able to find that 3 the bankruptcy court abused its discretion. Id. 4 DISCUSSION 5 As a preliminary matter, we note that the bankruptcy court 6 granted Direct Capital’s motion only under § 362(d)(1), finding 7 adequate “cause” for relief because IK/S was not a lessee under 8 the Lease, and consequently, that the Lease was not property of 9 the estate. As a result, the extensive discussion in IK/S’s 10 appellate brief concerning § 362(d)(2), its “equity” in the 11 leased equipment, and its critical need for the equipment to 12 reorganize, is largely irrelevant in this appeal.4 The standards 13 for relief set forth in §§ 362(d)(1) and (d)(2) are independent 14 and alternative. Can-Alta Props., Ltd. v. State Sav. Mortg. Co. 15 (In re Can-Alta Props., Ltd.), 87 B.R. 89, 92 (9th Cir. BAP 16 17 4 As discussed below, the Panel affirms the bankruptcy court’s decision to grant relief from stay under § 362(d)(1), and 18 did not consider in its deliberations IK/S’s arguments under 19 § 362(d)(2). Nevertheless, subsequent developments disclosed by counsel for IK/S at the Panel hearing undercut IK/S’s argument 20 that the Lease and equipment were necessary for reorganization. Counsel informed the Panel that he had filed IK/S’s disclosure 21 statement and plan of reorganization the previous day. See Disclosure Statement at dkt. no. 122. Page 9 of the Disclosure 22 Statement states that the restaurant and all assets of IK/S were 23 sold and executory contracts were assigned to the new owners, with the sale and assignment closing on September 14, 2011, or 24 one week before the hearing before the Panel. IK/S had received the proceeds from the sale and filed a liquidation plan. 25 Excluded from the sale and assignment were the Lease and 26 equipment at issue in this appeal. See Asset Purchase Agreement ¶ 1.2(g) at dkt. no. 101. Thus, contrary to the repeated 27 arguments of IK/S that the equipment was necessary for a possible sale and reorganization, the sale was completed and a liquidation 28 plan filed without including the Lease or the equipment.

7 1 1988). In other words, relief from stay may be granted for 2 “cause" under subsection (d)(1) despite the existence of debtor’s 3 equity in the property, or its need for the property in its 4 reorganization. Id. 5 Similarly, IK/S’s discussion of adequate protection in this 6 context is also less than helpful. While a “cause” for stay 7 relief explicitly referenced in § 362(d)(1) is a lack of adequate 8 protection, it is but one example of cause, rather than the 9 exclusive ground for relief under § 362(d)(1). Ellis v. Parr 10 (In re Ellis), 60 B.R. 432, 435 (9th Cir. BAP 1985). Instead, 11 what constitutes cause to terminate the stay is determined on a 12 case by case basis. Delaney-Morin v. Day (In re Delaney-Morin), 13 304 B.R. 365, 369 (9th Cir. BAP 2003) (citing MacDonald v. 14 MacDonald (In re MacDonald), 755 F.2d 715, 717 (9th Cir. 1985)). 15 Finally, under § 362(g)(2), the party seeking to preserve 16 the stay, in this case IK/S, had the ultimate burden of proof on 17 whether good cause existed to justify relief from the stay. In 18 re Ellis, 60 B.R. at 435.5 19 5 20 At oral argument, counsel for IK/S insisted that Direct Capital had not sought relief under § 362(d)(1) in that it had 21 not “checked that box” on the form motion for relief from stay used in the Central District of California bankruptcy court. 22 Consequently, counsel argued, IK/S was not required and had no 23 reason to make an offer of adequate protection to Direct Capital before the motion hearing. After review of the record, it 24 appears counsel’s representation is incorrect. On its form motion, Direct Capital checked the boxes marked “3. Grounds for 25 Relief from Stay: (a) Pursuant to 11 U.S.C. § 362(d)(1), cause 26 exists to grant Movant the requested relief from stay as follows: (1) Movant’s interest in the Property is not adequately 27 protected.” IK/S Excerpts of Record at p. 7; see also dkt. no. 43 at p. 3. Counsel’s argument is also not consistent with 28 (continued...)

8 1 After its review of the record, the bankruptcy court found 2 that the only relevant evidence submitted showed that the Lease 3 had been entered into by entities other than IK/S as lessee, and 4 that the Lease expressly prohibited assignment of “rights under 5 the lease or the lessee’s interest in the Lease without the 6 consent of the lessor.” Hr’g Tr. 6:1-7. Since insufficient 7 evidence was presented by IK/S to prove that Direct Capital had 8 consented to any assignment, the bankruptcy court concluded that 9 IK/S had no cognizable interest in the Lease. The bankruptcy 10 court did not err in its decision. 11 If a chapter 11 debtor has no interest in a leased property, 12 it is not property of the bankruptcy estate. Arizona Appetito’s 13 Stores, Inc. v. Paradise Vill. Investment Co. (In re Arizona 14 Appetito’s Stores, Inc.), 893 F.2d 216, 218 (9th Cir. 1990).6 15 Because IK/S was not a party to the Lease, the enforcement of the 16 Lease is a matter between Direct Capital and the Original 17 Lessees, Ivan Kane Enterprises, Inc. and The Gin Joint, LLC. 18 Since these are all nondebtor parties, that contest must be 19 20 5 (...continued) IK/S’s opposition to the stay relief motion it filed in the 21 bankruptcy court, where IK/S devoted most of three pages to 22 responding to Direct Capital’s § 362(d)(1) arguments. IK/S Excerpts of Record at pp. 63-65; see also dkt. no. 56 at 9-11. 23 6 In a brief comment at the hearing in the bankruptcy 24 court, IK/S argues that “the issue that was raised by counsel a number of times about it not being property of the estate, [§] 25 541 is very clear that this is — that a lease is property of the 26 estate. The Debtor has an equitable certainly interest in the lease and the use of the equipment.” Hr’g Tr. 4:17-21. Although 27 IK/S is correct that “a” lease may be property of the estate under § 541(a), IK/S has not shown through the facts of this case 28 that “this” Lease was property of its bankruptcy estate.

9 1 adjudicated in state court. As the Ninth Circuit has long held, 2 “cause” exists for relief from stay under § 362(d)(1) where the 3 issues are more appropriately adjudicated in a state court. 4 Christensen v. Tucson Estates, Inc. (In re Tucson Estates, Inc.), 5 912 F.2d 1162, 1169 (9th Cir. 1990); Piombo Corp. v. Castlerock 6 Props. (In re Castlerock Props.), 781 F.2d 159, 163 (9th Cir. 7 1986). 8 The commencement of a bankruptcy case creates an estate 9 comprised of all legal or equitable interests of the debtor in 10 property, wherever located and by whomever held, as of the 11 commencement of the case. § 541(a)(1). Although § 541 provides 12 the framework for determining the scope of the bankruptcy estate, 13 it does not provide the rules for determining whether the debtor 14 has an interest in property in the first place. Instead, the 15 bankruptcy court must look to state law to determine whether, and 16 to what extent, the debtor has any legal or equitable interests 17 in property as of the commencement of the case. Butner v. United 18 States, 440 U.S. 48, 54-55 (1979) ("Congress has generally left 19 the determination of property rights in the assets of a 20 bankrupt's estate to state law. . . . Unless some federal 21 interest requires a different result, there is no reason why such 22 interests should be analyzed differently simply because an 23 interested party is involved in a bankruptcy proceeding."); 24 Gaughan v. Edward Dittlof Rev. Tr. (In re Costas), 555 F.3d 790, 25 794 (9th Cir. 2009). 26 The bankruptcy court’s analysis in this case is consistent 27 with the law of New Hampshire. The Lease contains two choice of 28 law clauses governing its interpretation, both instructing that

10 1 its terms are to be interpreted using New Hampshire law. A forum 2 selection clause in a contract is presumptively valid. Doe 1 v. 3 AOL LLC, 552 F.3d 1077, 1083 (9th Cir. 2009) (citing M/S Bremen 4 v. Zapata Off-Shore Co., 407 U.S. 1, 17 (1972)). 5 As a general rule, the courts of New Hampshire will enforce 6 a contract according to the plain meaning of its terms, and when 7 interpreting a contract, the “inquiry focuses on the intent of 8 the contracting parties at the time of the agreement.” R. Zoppo 9 Co. v. City of Dover, 124 N.H. 666, 671, 475 A.2d 12, 16 (N.H. 10 1984). “In the absence of ambiguity, the parties' intent will be 11 determined from the plain meaning of the language used. The 12 words and phrases used by the parties will be assigned their 13 common meaning, and we will ascertain the intended purpose of the 14 contract based upon the meaning that would be given to it by a 15 reasonable person.” Greenhalgh v. Presstek, 152 N.H. 695, 698, 16 886 A.2d 1000, 1003 (N.H. 2005). 17 IK/S has not suggested that terms of the Lease are in any 18 fashion ambiguous. Specifically, it has not questioned the 19 meaning of the provisions of the Lease prohibiting an assignment 20 of lessee rights by the Original Lessees absent the written 21 consent of the lessor, and prescribing that no waiver of the 22 Lease’s terms is permitted without written approval of the 23 lessor. IK/S has not argued, nor submitted any evidence to show, 24 that Direct Capital was notified and consented to the assignment 25 of the Lease from the Original Lessees to IK/S. Instead, IK/S 26 argues that Direct Capital impliedly waived the anti-assignment 27 provisions in the Lease by accepting lease payments directly from 28 IK/S.

11 1 Assuming IK/S did indeed make direct lease payments at some 2 time to Direct Capital, the New Hampshire Supreme Court has 3 considered a similar case of an equipment lease agreement and its 4 purported assignment. As in this appeal, in Prime Fin. Group v. 5 Masters, 676 A.2d 528 (N.H. 1996), the lease agreement precluded 6 the assignment of the lessee’s rights without the written consent 7 of the lessor. Id. at 529. The lease agreement also contained a 8 provision forbidding a waiver of any of the lessor’s rights under 9 the lease unless the waiver was in writing. Id. Despite these 10 provisions, the lessee in Masters assigned its rights to another 11 party without the lessor’s consent. Id. However, unlike the 12 facts here, the original lessee notified the lessor of the 13 assignment, and sought its consent. While the lessor did not 14 grant consent, it thereafter accepted payments from the assignee. 15 A jury in the trial court determined, based on the facts, that 16 the parties to the lease had agreed to waive the contractual 17 provision requiring assignments of the lease to be in writing, 18 and that the lessor had effectively agreed to the assignment, as 19 indicated by its conduct. The New Hampshire Supreme Court found 20 no error in the trial court proceedings, concluding that a waiver 21 of the anti-assignment provisions could be implied by the conduct 22 of the parties. Id. 23 We believe a fair view of Masters would require that the 24 bankruptcy court enforce an anti-assignment clause in a lease 25 unless, as the trier of fact, it finds that the parties had 26 agreed to modify that provision. However, the lessor in Masters 27 had not only accepted payments from the assignee, he had been 28 notified earlier of the assignment, and requested to consent

12 1 prior to acceptance of lease payments from the purported 2 assignee. In other words, it was the lessor’s acceptance of 3 lease payments with both the knowledge of their source, and that 4 there had been an assignment of the lease, that constituted 5 evidence of an implied, mutual agreement to modify the anti- 6 assignment clause which was accepted by the trial jury and 7 ultimately approved by the New Hampshire Supreme Court. 8 In this appeal, IK/S offered no evidence to the bankruptcy 9 court to show that the Original Lessees or IK/S had notified 10 Capital Network or Direct Capital of the assignment of the 11 lessee’s interest to IK/S, nor was the lessor’s consent to an 12 assignment ever sought or obtained. Instead, IK/S bases its 13 argument that there was waiver on the Kane declaration in the 14 bankruptcy case by alleging, merely, that “[IK/S] has made all of 15 the payments in the amount of $40,579.55 on the Lease.” IK/S 16 repeats this precise claim in its appellate brief. IK/S Op. Br. 17 at 2. While these words appear to be carefully selected, and 18 imply that IK/S made all payments required under the Lease, as 19 confirmed by IK/S’s attorney at oral argument, a more precise 20 statement, according to the supporting documentation provided by 21 IK/S in the record, would be that “All payments that were made on 22 the Lease were made by IK/S.” Indeed, it is undisputed that no 23 payments on the Lease were made in the nine months prior to the 24 hearing on the stay relief motion.7 25 7 26 The supporting documentation for IK/S’s claim that it was the source of payments made on the Lease is a one-page list, 27 headed “IK/S BAR, LLC Equipment Leasing Expense Record.” It is a simple three column chart that includes the date, vendor (all 28 (continued...)

13 1 Given the evidence submitted by IK/S, the bankruptcy court 2 did not err in its finding that “no payments have been made.” 3 Hr’g Tr. 6:11-12. The bankruptcy court followed this finding 4 with an explanation that “if payments had been made consistently 5 and they’re accepted by a lessor from someone who is in 6 possession of property subject to a lease who is not the lessee, 7 an argument can be made – not always, but sometimes can be made 8 with regards to a waiver of the anti-assignment provision. But 9 I’ve reviewed the motion and the opposition very carefully, and 10 the moving party has carried its burden under Section 362(d)(1). 11 Based upon the foregoing findings of fact and conclusions of law, 12 the motion is granted.” Hr’g Tr. 6:11–21. 13 The Lease included an anti-assignment clause. Consistent 14 with the New Hampshire case law, it appears the bankruptcy court 15 considered whether the parties by their conduct had waived the 16 anti-assignment clause where the lessor purportedly accepted 17 payments from the assignee. The bankruptcy court declined to 18 accept the evidence presented by IK/S as adequate to show that it 19 had made all of the required payments under the lease to Direct 20 Capital. 21 Whether Direct Capital had impliedly consented to the 22 Original Lessees’ assignment of the Lease to IK/S was a question 23 7 24 (...continued) Direct Capital), and amount of alleged payments. No copies of 25 cancelled checks or other proof of the details of the alleged 26 payments to Direct Capital were offered. Moreover, the record also reflects that the business address of the Original Lessees 27 is the same as the address of IK/S, and the name of one of the Original Lessees, Ivan Kane Enterprises, Inc., is similar to the 28 d/b/a of IK/S, Ivan Kane’s Café.

14 1 of fact. Masters, 676 A.2d at 531. That IK/S made some, but not 2 all of the required lease payments directly to Direct Capital, is 3 some evidence that Direct Capital consented to the assignment of 4 the Lease, but the bankruptcy court declined to so find. Where 5 there are two permissible views of the evidence, the fact- 6 finder’s choice between them cannot be clearly erroneous. United 7 States v. Working, 224 F.3d 1093, 1102 (9th Cir. 2000)(en banc). 8 We conclude that, on this record, the bankruptcy court did 9 not abuse its discretion in granting relief from stay under 10 § 362(d)(1) because the Lease was assigned to IK/S in violation 11 of its terms. 12 CONCLUSION 13 We AFFIRM the decision of the bankruptcy court. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28