In re: Lmm Sports Management, LLC Ethan Lock Eric D. Metz

CourtUnited States Bankruptcy Appellate Panel for the Ninth Circuit
DecidedJune 1, 2016
DocketAZ-15-1195-KuJaJu
StatusUnpublished

This text of In re: Lmm Sports Management, LLC Ethan Lock Eric D. Metz (In re: Lmm Sports Management, LLC Ethan Lock Eric D. Metz) is published on Counsel Stack Legal Research, covering United States Bankruptcy Appellate Panel for the Ninth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re: Lmm Sports Management, LLC Ethan Lock Eric D. Metz, (bap9 2016).

Opinion

FILED 1 NOT FOR PUBLICATION JUN 01 2016 2 SUSAN M. SPRAUL, CLERK U.S. BKCY. APP. PANEL 3 UNITED STATES BANKRUPTCY APPELLATE PANEL OF THE NINTH CIRCUIT

4 OF THE NINTH CIRCUIT 5 In re: ) BAP No. AZ-15-1195-KuJaJu ) 6 LMM SPORTS MANAGEMENT, LLC; ) Bk. No. 2-14-bk-13952-DPC ETHAN LOCK; ERIC D. METZ, ) 7 ) Debtors. ) 8 ______________________________) ) 9 WARNER ANGLE HALLAM JACKSON & ) FORMANEK, P.L.C., ) 10 ) Appellant, ) 11 ) v. ) MEMORANDUM* 12 ) ETHAN LOCK; ERIC D. METZ, ) 13 ) Appellees. ) 14 ______________________________) 15 Argued and Submitted on May 20, 2016 at Phoenix, Arizona 16 Filed – June 1, 2016 17 Appeal from the United States Bankruptcy Court 18 for the District of Arizona 19 Honorable Daniel P. Collins, Chief Bankruptcy Judge, Presiding 20 Appearances: Mark C. Hudson of Schian Walker, P.L.C. argued for appellant Warner Angle Hallam Jackson & Formanek, 21 P.L.C.; Janel Glynn of Gallagher & Kennedy, P.A. argued for Appellees Ethan Lock and Eric D. Metz. 22 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 8024-1. 1 Before: KURTZ, JAIME** and JURY, Bankruptcy Judges. 2 INTRODUCTION 3 In two of these three chapter 111 bankruptcy cases, 4 appellant Warner Angle Hallam Jackson & Formanek, P.L.C., filed 5 proofs of claim two months after the claims bar date set by the 6 bankruptcy court. The bankruptcy court denied Warner Angle’s 7 excusable neglect motion under Rule 9006(b)(1) seeking to have 8 the proofs of claim treated as timely filed and disallowed the 9 claims as untimely under § 502(b)(9). The bankruptcy court also 10 denied Warner Angle’s motion for reconsideration. All of the 11 bankruptcy court’s rulings hinged on its finding that the debtors 12 were prejudiced by Warner Angle’s delay in filing its proofs of 13 claim. 14 On appeal, Warner Angle contends that the bankruptcy court’s 15 finding of prejudice was clearly erroneous. Alternately, Warner 16 Angle contends that we should fashion an equitable exception to 17 Rule 3003(c)(2)’s claim filing requirement and should apply that 18 equitable exception to its claims. Because Warner Angle’s 19 contentions lack merit, we AFFIRM. 20 FACTS 21 Debtors Ethan Lock and Eric D. Metz are two of the three 22 owners of debtor LMM Sports Management, LLC. The third owner is 23 24 ** Hon. Christopher D. Jaime, United States Bankruptcy Judge 25 for the Eastern District of California, sitting by designation. 26 1 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 28 Procedure, Rules 1001-9037. All “Civil Rule” references are to the Federal Rules of Civil Procedure.

2 1 non-debtor Vance Malinovic. Together, Lock, Metz and Malinovic 2 are sports managers and agents for roughly 30 athletes employed 3 by the National Football League. Through LMM Sports Management, 4 and formerly through its predecessor, Lock, Metz, and Malinovic 5 provided their sports management and agency services. Appellant 6 Warner Angle provided legal services to one or more of the 7 debtors in their state court litigation against third party Your 8 Source Pacific Fund I, LLP. Warner Angle claims that it still is 9 owed attorney’s fees and interest for the services it rendered. 10 In the Maricopa County Superior Court, Your Source Pacific 11 Fund I, LLP, obtained a $2.4 million judgment against the debtors 12 and Malinovic. Enforcement of the state court judgment 13 ultimately caused the three debtors to file their chapter 11 14 bankruptcy petitions. 15 The judgment was the subject of state court cross-appeals 16 until the parties reached a consensual resolution of their 17 dispute, which was approved by the bankruptcy court. In their 18 motion for approval of the settlement, filed in January 2015, the 19 debtors explained that Your Source Pacific Fund I was willing to 20 accept an immediate lump sum settlement payment of $1.5 million 21 in full satisfaction of its $2.4 million judgment, which had the 22 potential to more than double if Your Source Pacific Fund I 23 prevailed on appeal. 24 The bankruptcy court approved the settlement over Warner 25 Angle’s objection. For purposes of this appeal, the only 26 important part of the objection was set forth in a footnote, in 27 which Warner Angle stated: “Warner Angle asserts that, as of the 28 Petition Date, its claim, with interest, is $1,301,055.86 (plus

3 1 accruing interest). The Court has not set a claims bar date and 2 Warner Angle has not yet filed a proof of claim.” Objection to 3 Motion for Order Approving Settlement (Feb. 17, 2015) at 2 n.2 4 (emphasis added). 5 Warner Angle’s statement regarding the bar date was 6 incorrect. By order entered November 12, 2014, the bankruptcy 7 court granted the debtors’ bar date motion and set a claims bar 8 date in all three bankruptcy cases of December 16, 2014. The 9 certificates of service accompanying the bar date motion and the 10 entered bar date order indicate that Warner Angle was served at 11 the address set forth in Warner Angle’s notice of appearance and 12 request for special notice.2 13 On the same day Warner Angle filed its objection to debtors’ 14 compromise motion, February 17, 2015, debtors filed a motion 15 seeking to accelerate the hearing on the compromise motion. In 16 the motion to accelerate, debtors pointed out that the claims bar 17 date had expired on December 16, 2014, that Warner Angle had not 18 filed any proofs of claim and, hence, that Warner Angle lacked 19 standing to object to the compromise motion. 20 One day later, apparently in response to the debtor’s 21 assertions in the motion to accelerate, Warner Angle belatedly 22 filed proofs of claim in the Lock and Metz bankruptcy cases. 23 While the compromise motion was still pending, Lock and Metz 24 2 The certificates of service reflecting service of the 25 entered bar date order were not included in the parties’ excerpts 26 of record, but we can and do take judicial notice of the documents attached to the bankruptcy court’s electronic docket, 27 including the certificates of service. See O'Rourke v. Seaboard Sur. Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 957–58 (9th 28 Cir. 1989).

4 1 filed an objection to Warner Angle’s proofs of claim and argued 2 that the claims should be disallowed as untimely. In response, 3 Warner Angle filed a cross-motion requesting that the bankruptcy 4 court under 9006(b)(1) treat its proofs of claim as if they had 5 been timely filed. According to Warner Angle, it was entitled to 6 this relief because the late filing of its proofs of claim was 7 the result of excusable neglect, under the standard articulated 8 by the Supreme Court in Pioneer Inv. Servs. Co. v. Brunswick 9 Assoc. Ltd. P'ship, 507 U.S. 380, 395 (1993). 10 After further briefing, the bankruptcy court held a hearing 11 at which the court rejected Warner Angle’s excusable neglect 12 argument. The court found in favor of Warner Angle regarding two 13 of the four Pioneer factors.

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In re: Lmm Sports Management, LLC Ethan Lock Eric D. Metz, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-lmm-sports-management-llc-ethan-lock-eric-d-metz-bap9-2016.