In re Puchi Props. Inc.

601 B.R. 677
CourtUnited States Bankruptcy Court, D. Arizona
DecidedMay 9, 2019
DocketCase No. 4:14-bk-01372-BMW
StatusPublished

This text of 601 B.R. 677 (In re Puchi Props. Inc.) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, D. Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In re Puchi Props. Inc., 601 B.R. 677 (Ark. 2019).

Opinion

Brenda Moody Whinery, Chief Bankruptcy Judge

This matter came before the Court pursuant to the Motion to Enforce Order Confirming *679Plan of Reorganization and for Order Compelling UETA of Arizona, Inc. to Comply with the Terms of Trustee's Plan of Reorganization (the "Motion") filed by John C. Smith, the Plan Trustee (the "Plan Trustee") for Puchi Properties Inc. (the "Debtor") on January 12, 2018 (Dkt. 795); UETA of Arizona, Inc.'s Response (the "Response") (Dkt. 803); the Plan Trustee's Reply (the "Reply") (Dkt. 808); UETA of Arizona, Inc.'s Sur-Reply (the "Sur-Reply") (Dkt. 817); and the Notice of Limited Joinder in the Motion (the "Limited Joinder") (Dkt. 819) filed by Robert F. Kuhn, Esq., the Law Office of Robert F. Kuhn, PLLC, and Donald E. Gabriel, Esq. (the "Kuhn/Gabriel Creditors").

In the Motion, the Plan Trustee asks the Court to: (1) determine that the Debtor validly assumed an unexpired lease (the "Lease") with UETA of Arizona, Inc. ("UETA") through the Chapter 11 Trustee's Plan of Reorganization for Puchi Properties, Inc. Dated May 11, 2015 (the "Plan") (Dkt. 545 at Ex. A), which was confirmed by the Court on March 11, 2016 (Dkt. 545); (2) determine that there are no uncured defaults based on events or conditions that existed or occurred prior to this Court's entry of the Stipulated Order Confirming Plan of Reorganization (the "Confirmation Order") (Dkt. 545); (3) determine that the Lease has not been and may not be terminated based on events that existed or occurred prior to entry of the Confirmation Order; (4) determine that UETA is barred by the doctrine of res judicata from asserting claims raised in a state court complaint pertaining to the Lease; (5) enter orders enforcing the Confirmation Order and compelling UETA to pay $ 24,000 in arrears on account of the Lease, pay $ 8,000 per month pursuant to the Lease, otherwise conform its conduct to the Lease, and comply with the injunction provisions in the Debtor's Plan; and (6) award the Debtor its reasonable attorneys' fees incurred in connection with the Motion. The Motion does not seek any relief pursuant to Federal Rule of Civil Procedure 60,1 as incorporated by Federal Rule of Bankruptcy Procedure 9024,2 or seek any modification of the Plan.

UETA asserts that it was not provided with notice of the Debtor's Plan or any of the proceedings related thereto and asks the Court to deny the Motion.

On April 4, 2018, the Court held an initial hearing on the Motion and determined that the threshold issue is whether the Plan Trustee validly assumed the Lease between UETA and the Debtor through the Plan. The Court instructed the parties to brief the issue of whether the Lease was validly assumed and set the matter for oral argument.

On June 12, 2018, the Plan Trustee and UETA filed supplemental briefs (Dkts. 829 & 830), and on June 26, 2018, the Court held oral arguments. The Court then took this matter under advisement. Based on the pleadings, oral arguments, and entire record before the Court, the Court now issues its ruling.

This decision constitutes the Court's findings of fact and conclusions of law pursuant to Fed. R. Civ. P. 52, as incorporated by Fed. R. Bankr. P. 7052, and as made applicable to contested matters by Fed. R. Bankr. P. 9014(c).

I. Jurisdiction

A bankruptcy court's post-confirmation jurisdiction is relatively limited. See *680In re Pegasus Gold Corp. , 394 F.3d 1189, 1193-94 (9th Cir. 2005). The Ninth Circuit has adopted the Third Circuit's test for post-confirmation jurisdiction, under which there must be "a close nexus to the bankruptcy plan or proceeding sufficient to uphold bankruptcy court jurisdiction ...." Id. at 1194 (quoting In re Resorts Int'l Inc. , 372 F.3d 154, 166-67 (3rd Cir. 2004) ). "[M]atters affecting 'the interpretation, implementation, consummation, execution, or administration of [a] confirmed plan will typically have the requisite close nexus.' " Id. (quoting In re Resorts Int'l Inc. , 372 F.3d at 167 ).

Where a court has post-confirmation jurisdiction, retention of jurisdiction provisions will generally be given effect. In re 350 Encinitas Invs., LLC , No. CIV 06CV2085 WQH (POR), 2007 WL 2669546, at *6 (S.D. Cal. Sept. 6, 2007), aff'd , 313 F. App'x 70 (9th Cir. 2009) (quoting In re Resorts Int'l Inc. , 372 F.3d at 161 ).

In this case, there is a sufficiently close nexus between the issues raised by the parties and the confirmed Plan such that the Court retains post-confirmation jurisdiction over this matter, especially given that the central issue is whether or not UETA is bound by the Plan and this Court's Confirmation Order. Furthermore, the Plan provides for this Court's retention of jurisdiction to, among other things: (1) construe, implement, enforce, execute, or consummate the Plan, the Confirmation Order or any other Court order; (2) issue injunctions or take other such actions "as may be necessary or appropriate to restrain interference with the Debtor by any party with the Plan or its execution or implementation by any person;" and (3) issue "such orders in aid of consummation of the Plan and the [C]onfirmation [O]rder ... to the full extent authorized by the Bankruptcy Code[.]" (Dkt. 545, Ex. A at 39-40).

II. Issue

The threshold issue before the Court is whether the Debtor validly assumed the UETA Lease through the Plan.

III. Factual and Procedural Background

1. On October 31, 2013, UETA, as tenant, entered into the Lease with the Debtor and third-party Sherman Montgomery ("Montgomery"), as co-landlords, for certain real property located at 361 N.

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Bluebook (online)
601 B.R. 677, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-puchi-props-inc-arb-2019.