In re: Valley Health System

Opinion

FILED AUG 03 2012 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-11-1657-MkDKi ) 6 VALLEY HEALTH SYSTEM, ) Bk. No. 07-18293-PC ) 7 Debtor. ) _______________________________) 8 ) JESSICA LOPEZ, ) 9 ) Appellant, ) 10 ) v. ) MEMORANDUM* 11 ) POST-EFFECTIVE DATE COMMITTEE ) 12 OF CREDITORS; ALVAREZ & MARSAL ) HEALTHCARE INDUSTRY GROUP, LLC,) 13 as Disbursing Agent, ) ) 14 Appellees. ) _______________________________) 15 Argued and Submitted on July 19, 2012 16 at Pasadena, California 17 Filed – August 3, 2012 18 Appeal from the United States Bankruptcy Court for the Central District of California 19 Honorable Peter H. Carroll, Chief Bankruptcy Judge, Presiding 20 Appearances: John D. Darling of Hunt Ortmann Palffy Nieves 21 Lubka Darling & Mah, Inc. argued for Appellant Jessica Lopez; Jeffrey L. Kandel of Pachulski 22 Stang Ziehl & Jones LLP argued for Appellees the Post-Effective Date Committee of Creditors and 23 Alvarez & Marsal Healthcare Industry Group, LLC, as Disbursing Agent. 24 25 Before: MARKELL, DUNN and KIRSCHER, Bankruptcy Judges. 26 * This disposition is not appropriate for publication. 27 Although it may be cited for whatever persuasive value it may 28 have (see Fed. R. App. P. 32.1), it has no precedential value. See 9th Cir. BAP Rule 8013-1. 1 INTRODUCTION 2 Jessica Lopez (“Lopez”) is a former employee of Valley 3 Health System (“VHS”) and was a participant in the Valley Health 4 System Retirement Plan (“VHS Retirement Plan”).1 Lopez filed a 5 proof of claim in VHS’s bankruptcy case seeking a distribution 6 from that bankruptcy based on her claimed entitlement to benefits 7 under or from the VHS Retirement Plan. But VHS’s confirmed 8 chapter 92 plan of adjustment (“Chapter 9 Plan”) specified, among 9 other things, that any claims held by VHS Retirement Plan 10 participants (“Participants”) against VHS would “not be entitled 11 to receive any distributions” under the Chapter 9 Plan. 12 A Post-Effective Date Committee of Creditors and a 13 disbursing agent appointed under the Chapter 9 Plan (jointly, the 14 “Committee Parties”) objected to Lopez’s proof of claim. The 15 bankruptcy court sustained the objection and entered an order 16 disallowing Lopez’s claim. Lopez appealed, and we AFFIRM. 17 // 18 // 19 // 20 // 21 // 22 1 23 The parties have a serious and sincere disagreement over whether VHS and VHS Retirement Plan are separate entities. We 24 refer to “VHS Retirement Plan” separately for ease of reference, and not as the result of any legal analysis. 25 2 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 FACTS3 2 A. VHS, its bankruptcy case, and its Chapter 9 Plan. 3 VHS is a public agency and a local healthcare district 4 formed in 1946, under the California Local Health Care District 5 Law, Cal. Health & Safety Code § 32000, et seq. VHS owned and 6 operated one skilled nursing facility and three acute health care 7 facilities in Riverside County, California. VHS filed a 8 chapter 9 bankruptcy petition in December 2007, and the 9 bankruptcy court entered an order for relief in February 2008. 10 Pursuant to § 943, the bankruptcy court confirmed VHS’s 11 first amended plan of adjustment (“Chapter 9 Plan”) by order 12 entered April 26, 2010 (“Confirmation Order”). The Chapter 9 13 Plan was based on the sale of substantially all of VHS’s 14 remaining assets to another entity known as Physicians for 15 Healthy Hospitals, Inc. Among other things, the Chapter 9 Plan 16 provided for the discharge of VHS’s prepetition debts and also 17 enjoined claimants from pursuing any action or proceeding on 18 account of such debts. 19 3 20 This is the second appeal originating from VHS’s bankruptcy case this Panel has heard. The first appeal, Kirton v. Valley 21 Health Sys. (In re Valley Health Sys.), 471 B.R. 555 (9th Cir. BAP 2012), appeal docketed, No. 12-60019 (9th Cir. March 21, 22 2012), concerned a petition for writ of mandamus filed in state 23 court by two other Participants, Peggy Kirton and Diana Agnello, seeking to enforce their alleged VHS Retirement Plan entitlements 24 against VHS and others. VHS removed that petition to the bankruptcy court, and the bankruptcy court dismissed the petition 25 under Civil Rule 12(b)(6). Id. at 558. 26 We vacated the bankruptcy court’s dismissal order, holding that the bankruptcy court lacked subject matter jurisdiction over 27 the petition. Id. at 569. We draw most of the facts regarding VHS, its bankruptcy case and its Chapter 9 Plan from our prior 28 decision.

3 1 The Chapter 9 Plan classified general unsecured claims as 2 Class 2A claims and generally provided for the pro rata 3 distribution of $17 million to the holders of allowed Class 2A 4 claims. The plan then separately classified the Participants as 5 Class 2C claimants and provided no distribution for them. 6 Instead, the Chapter 9 Plan expected the Class 2C claimants to 7 look to the assets left for them, along with their other rights 8 and entitlements, under the VHS Retirement Plan.4 9 The asset sale had expressly excluded all these VHS 10 Retirement Plan assets. As a consequence, the Chapter 9 Plan 11 specified that the Participants as Class 2C claimants would not 12 have recourse as against VHS or its assets, and would not be 13 entitled to any distribution under the Chapter 9 Plan. 14 This was expressly stated in the Chapter 9 Plan: 15 Defined Benefit Plan Participants will be entitled to the same rights and benefits to which such participants 16 are currently entitled under the VHS Retirement Plan and the MetLife Group Annuity Contract, and such 17 participants shall have no recourse to the District or to any assets of the District, and shall not be 18 entitled to receive any distributions under this Plan. Instead, all unallocated amounts held by MetLife Group, 19 pursuant to the VHS Retirement Plan and the MetLife Group Annuity Contract, will continue to be made 20 available to provide retirement benefits for participants in the manner indicated under the 21 provisions of the VHS Retirement Plan and the MetLife Group Annuity Contract. Accordingly, the treatment of 22 Allowed Class 2C claim holders set forth herein shall not affect any legal, equitable or contractual rights 23 to which the VHS Retirement Plan participants are entitled. 24 25 Chapter 9 Plan (Dec. 17, 2009) at 16:13-22. 26 27 4 In this regard, the primary assets appear to be those held 28 under a group annuity contract administered by MetLife Group.

4 1 Based on this treatment, the Chapter 9 Plan characterized 2 the Class 2C claimants – the Participants – as unimpaired. As 3 unimpaired claim holders, they were deemed to have accepted the 4 Chapter 9 Plan, and were thus not allowed to vote to accept or 5 reject it. § 1126(f). 6 The record reflects that Lopez was served with advance 7 notice of: (1) the claims bar date, (2) the court approval of the 8 first amended disclosure statement, and (3) the confirmation 9 hearing on the Chapter 9 Plan. The accuracy of the record is 10 supported by the fact that Lopez filed her proof of claim on 11 time, and before the plan confirmation. The record further 12 indicates that Lopez was sent copies of the Chapter 9 Plan and 13 the first amended disclosure statement at the same time she was 14 served with notice of the confirmation hearing. 15 But Lopez did not object to VHS’s Chapter 9 Plan. According 16 to Lopez, she and other Participants were lulled into a false 17 sense of security regarding the VHS Retirement Plan because VHS’s 18 representatives, and the Chapter 9 Plan itself, indicated that 19 the VHS Retirement Plan and the Participants would not be 20 affected by either the bankruptcy case or the Chapter 9 Plan.5 21 On October 14, 2010, VHS issued a notice that the asset sale 22 had closed on October 13, 2010, and that October 13, 2010, was 23 the effective date of the Chapter 9 Plan. 24 25 5 26 Lopez admits that she and other Participants were informed by VHS’s representatives at a meeting held on July 7, 2010, that 27 the VHS Retirement Plan was out of funds and would be terminated. It is less than clear why Lopez did not promptly attempt to take 28 action upon learning of these revelations.

5 1 B. Lopez’s proof of claim and the Committee Parties’ claim objection 2 3 Lopez timely filed her proof of claim in VHS’s bankruptcy 4 case on August 22, 2008. On its face, the Proof of Claim stated 5 that it was based on Lopez’s alleged entitlement to a “retirement 6 benefit.”6 A single page is attached to the Proof of Claim: a 7 copy of Lopez’s VHS Retirement Plan employee benefit statement 8 for the year ending December 31, 1996. This statement estimated 9 that, if Lopez continued her employment with VHS until her 10 designated retirement date in 2018 and continued to participate 11 in the VHS Retirement Plan, she would receive a monthly pension 12 benefit upon retirement of $3,761.43 per month.7 13 On April 8, 2011, the Committee Parties filed a motion to 14 disallow Lopez’s proof of claim. According to the the Committee 15 Parties, Lopez was a Class 2C creditor who was not entitled to 16 any distribution under the Chapter 9 Plan, and thus her claim was 17 subject to disallowance. 18 On September 14, 2011, Lopez filed a voluminous response to 19 the Committee Parties’ claim objection. Lopez did not contest 20 that, under the terms of the Chapter 9 Plan, she was not entitled 21 22 6 In the proof of claim, Lopez asserted that her claim was 23 entitled to priority status under § 507(a)(5), but that Bankruptcy Code section is inapplicable in chapter 9 cases. See 24 § 901(a). 25 7 According to both Lopez and the Chapter 9 Plan, in May 26 1999, the VHS Retirement Plan was “frozen,” in the sense that no new contributions were to be made by VHS, because the VHS 27 Retirement Plan was claimed to be overfunded. Lopez and the other Participants apparently ceased to accrue any new benefits 28 thereafter.

6 1 to a share of the funds set aside for distribution to other 2 unsecured creditors of VHS. Indeed, Lopez essentially conceded 3 that she qualified as a Class 2C creditor under the Chapter 9 4 Plan and that the Chapter 9 Plan provided for no distribution to 5 Class 2C creditors. 6 Rather, Lopez argued that the Chapter 9 Plan was subject to 7 being set aside under § 1144 or under § 105(a) based on fraud in 8 the procurement and based on inadequate notice. In essence, 9 Lopez argued that, in order to lull the Participants into a false 10 sense of security so that none of them would object to 11 confirmation of the Chapter 9 Plan, VHS and its representatives 12 on numerous occasions represented that the Participants did not 13 need to worry about VHS’s bankruptcy case and would not be 14 affected by the Chapter 9 Plan. Lopez further claimed that VHS 15 and its representatives concealed from the Participants the true 16 state of affairs until the July 7, 2010 meeting held shortly 17 after confirmation: (1) that VHS had underfunded the VHS 18 Retirement Plan and/or had raided the monies set aside for 19 funding the plan; (2) that VHS wrongfully had exercised control 20 over the VHS Retirement Plan and effectively was preventing the 21 VHS Retirement Plan’s fiduciaries from fulfilling their duties to 22 ensure that the VHS Retirement Plan was adequately funded; and 23 (3) that VHS secretly intended to terminate the VHS Retirement 24 Plan well before it confirmed its Chapter 9 Plan, but it 25 concealed this fact in order to avoid any additional impediments 26 to confirmation of its Chapter 9 Plan. 27 Meanwhile, Lopez’s contentions regarding inadequate notice 28 were twofold. On the one hand, Lopez complained that some

7 1 Participants, unlike herself, received no notice whatsoever of 2 VHS’s bankruptcy. On the other hand, Lopez complained that the 3 notice she received was ineffective in light of the alleged acts 4 of concealment and misinformation referenced above. 5 Lopez also spent a great deal of time and effort outlining 6 the various alleged statutory and contractual duties VHS 7 supposedly breached. But Lopez never really tied this discussion 8 to any relief that Lopez contends she might have been entitled to 9 on account of her proof of claim, which only sought a 10 distribution based on her claimed entitlement to retirement 11 benefits. At most, Lopez argued that the bankruptcy court should 12 hold in abeyance its decision on Lopez’s proof of claim until 13 after Lopez and others had commenced and prosecuted an action 14 against VHS, which in part would have sought modification and/or 15 revocation of VHS’s Chapter 9 Plan. 16 Lopez also focused on her allegation that VHS and the VHS 17 Retirement Plan were separate entities, with separate boards and 18 separate agents for service of process. According to Lopez, the 19 VHS Retirement Plan, as a separate entity, was not properly 20 subject to VHS’s control, and thus her entitlement to benefits 21 from the VHS Retirement Plan could not have been validly affected 22 by either VHS or its Chapter 9 Plan. However, Lopez never 23 explained how this allegation, even if true, would have entitled 24 her to a distribution from VHS on account of her proof of claim 25 for retirement benefits, when VHS’s Chapter 9 Plan explicitly 26 precluded Lopez from receiving such a distribution. 27 On September 21, 2011, the Committee Parties filed a reply 28 in support of their claim objection. In it, the Committee

8 1 Parties emphasized (1) that Lopez had notice of the VHS 2 bankruptcy and an opportunity to object to its Chapter 9 Plan, 3 (2) that the Chapter 9 Plan, which the bankruptcy court had 4 confirmed, specified that Class 2C creditors would not be 5 entitled to any distribution, and (3) that Lopez’s claim 6 constituted a Class 2C claim, a claim seeking a distribution on 7 account of Lopez’s alleged entitlement to benefits under the VHS 8 Retirement Plan. According to the Committee Parties, the 9 doctrine of claim preclusion barred Lopez from collaterally 10 attacking the Chapter 9 Plan, and neither § 1144 nor § 105(a) 11 afforded Lopez with a proper basis to seek either modification or 12 revocation of the Chapter 9 Plan. 13 After holding a hearing on the claim objection, the 14 bankruptcy court issued a memorandum decision in which it 15 essentially agreed with the Committee Parties’ arguments. 16 Accordingly, on November 8, 2011, the bankruptcy court entered an 17 order sustaining the Committee Parties’ claim objection and 18 disallowing Lopez’s claim. Lopez timely filed a notice of appeal 19 on November 18, 2011. 20 JURISDICTION 21 The bankruptcy court had jurisdiction under 28 U.S.C. 22 § 157(b)(2)(B), and we have jurisdiction under 28 U.S.C. § 158(b) 23 as this is a final order from the resolution of a proof of claim. 24 ISSUE 25 Whether the bankruptcy court erred when it disallowed 26 Lopez’s proof of claim. 27 STANDARDS OF REVIEW 28 Orders resolving claims objections can raise legal issues,

9 1 which we review de novo, as well as factual issues, which we 2 review under the clearly erroneous standard. See Veal v. Am. 3 Home Mortg. Servicing, Inc. (In re Veal), 450 B.R. 897, 918 (9th 4 Cir. BAP 2011). 5 DISCUSSION 6 The key to this appeal is Lopez’s proof of claim. The 7 principal purpose of that proof of claim, as with any proof of 8 claim, is to assert an entitlement to a share of any assets 9 designated for distribution. See 4 Collier on Bankruptcy 10 ¶ 501.01[1] (Alan N. Resnick & Henry J. Sommer, eds., 16th ed. 11 2012).8 12 Here, Lopez based her proof of claim on her claimed 13 entitlement to benefits under the VHS Retirement Plan, but VHS’s 14 Chapter 9 Plan specified that Participants under the VHS 15 Retirement Plan would have no recourse against either VHS or its 16 assets and would not be entitled to any distribution under the 17 Chapter 9 Plan. Lopez indisputably had actual notice of the 18 Chapter 9 Plan and its contents, and had an opportunity to 19 object, but did not do so before the plan was confirmed. 20 Under these circumstances, Lopez is precluded from now 21 objecting to how VHS’s Chapter 9 Plan treated her retirement 22 23 8 Lopez contends that the bankruptcy court lacked 24 jurisdiction to consider and disallow her proof of claim, but this contention has no merit. It is well settled that the claims 25 allowance process is “integral to the restructuring of the 26 debtor-creditor relationship” and hence is subject to the bankruptcy court’s jurisdiction. Langenkamp v. Culp, 498 U.S. 27 42, 44, 111 S.Ct. 330, 331, 112 L.Ed.2d 343 (1990) (per curiam) (citing Granfinanciera, S.A. v. Nordberg, 492 U.S. 33, 57-58, 109 28 S.Ct. 2782, 2798-99, 106 L.Ed.2d 26 (1989)).

10 1 benefits claim. See § 944(a); see also United Student Aid Funds, 2 Inc. v. Espinosa, ––– U.S. ––––, 130 S.Ct. 1367, 1374-75, 176 3 L.Ed.2d 158 (2010) (confirmed chapter 13 plan discharged student 4 loan debt); Stratosphere Litigation L.L.C. v. Grand Casinos, 5 Inc., 298 F.3d 1137, 1143 (9th Cir. 2002) (confirmed chapter 11 6 plan released third party from funding obligation arguably owed 7 to debtor); Great Lakes Higher Educ. Corp. v. Pardee (In re 8 Pardee), 193 F.3d 1083, 1086-87 (9th Cir. 1999) (confirmed 9 chapter 13 plan discharged postpetition interest on student 10 loan); Trulis v. Barton, 107 F.3d 685, 691 (9th Cir. 1995) 11 (confirmed chapter 11 plan released all claims of country club 12 members against debtor country club's founders, directors and 13 attorneys). 14 As she argued in the bankruptcy court, Lopez argues on 15 appeal that she was not given adequate notice of the Chapter 9 16 Plan’s impact on her. According to Lopez, the misleading 17 statements regarding the effect of the Chapter 9 Plan on 18 Participants like her amounted to a violation of her due process 19 rights. Consequently, she argues, she should not be bound by the 20 terms of the Chapter 9 Plan. 21 We disagree. The Chapter 9 Plan was not misleading 22 regarding how the claims of Participants would be treated: it 23 unequivocally stated that they would receive nothing from VHS, 24 its assets, or its Chapter 9 Plan. 25 Moreover, due process does not require that any notice given 26 explain the potential legal and practical effects of proposed 27 judicial action; rather, as long as a party is given notice of 28 the action and is afforded an opportunity to object, due process

11 1 requirements are satisfied. Espinosa v. United Student Aid 2 Funds, Inc., 553 F.3d 1193, 1203 (9th Cir. 2008), aff'd, ––– U.S. 3 ––––, 130 S.Ct. 1367; Berry v. U.S. Trustee (In re Sustaita), 4 438 B.R. 198, 210 (9th Cir. BAP 2010), aff'd, 460 Fed. Appx. 627 5 (9th Cir. 2011); see also Acequia, Inc. v. Clinton (In re 6 Acequia, Inc.), 787 F.2d 1352, 1359–60 (9th Cir. 1986) 7 (concluding that shareholder had adequate notice that evidence of 8 his misconduct was relevant to, and would be considered at, plan 9 confirmation hearing, where disclosure statement filed in support 10 of plan outlined allegations of shareholder's misconduct); 11 Lawrence Tractor Co. v. Gregory (In re Gregory), 705 F.2d 1118, 12 1122–23 (9th Cir. 1983) (holding that notice given to unsecured 13 creditor, even though incomplete and ambiguous, satisfied due 14 process requirements because it was sufficient to give the 15 creditor inquiry notice of the actions the debtor sought to take 16 pursuant to his proposed plan). 17 Lopez also argues on appeal that the bankruptcy court erred 18 when it denied her request to continue the hearing on its 19 disposition of her proof of claim until she brought and 20 prosecuted an action that in part would seek to modify or revoke 21 the Chapter 9 Plan. But we agree with the bankruptcy court that, 22 on the record presented, no delay was necessary because any 23 action to modify or revoke the Chapter 9 Plan would have been 24 futile. 25 Lopez contended that modification or revocation could have 26 been granted under either § 1144 or under § 105(a), but neither 27 of these statutes would have justified either revocation or 28 modification here. We will address each statute in turn.

12 1 Section 1144 applies in chapter 9 cases. See § 901(a). 2 That section is the only remedy available for revocation of an 3 order confirming a plan, and only permits revocation when 4 confirmation of the plan was procured by fraud. Dale C. Eckert 5 Corp. v. Orange Tree Assocs., Ltd. (In re Orange Tree Assocs., 6 Ltd.), 961 F.2d 1445, 1447 (9th Cir. 1992). Section 1144(a) sets 7 a six-month limitation period for seeking plan revocation, and 8 that limitation period begins to run from plan confirmation. 9 Furthermore, even if the grounds for claiming fraud are not 10 discovered until after the limitations period has run, the Ninth 11 Circuit has held that such belated discovery of the fraud does 12 not toll the § 1144(a) limitations period. In re Orange Tree 13 Assocs., Ltd., 961 F.2d at 1447; see also Duplessis v. Valenti 14 (In re Valenti), 310 B.R. 138, 145 (9th Cir. BAP 2004) (stating 15 that cognate statute under chapter 13 similarly limits complaints 16 to revoke confirmation of a chapter 13 plan). See also Collier, 17 supra, ¶ 1144.02 (“The 180-day deadline applies even if the fraud 18 is not discovered until after expiration of the 180-day 19 period.”); 680 Fifth Ave. Assocs. v. EGI Co. Servs., Inc. (In re 20 680 Fifth Ave. Assocs.), 209 B.R. 314, 323 (Bankr. S.D.N.Y. 21 1997). 22 While the parties here dispute whether the alleged fraud was 23 discovered before or after the § 1144(a) limitations period ran, 24 that issue is not material to our resolution of Lopez’s 25 revocation argument. It is undisputed that Lopez did not 26 commence an action before the limitations period ran, so Lopez 27 cannot avail herself of any relief under § 1144(a). 28 Meanwhile, § 105(a) facilitates the authority the Bankruptcy

13 1 Code grants to bankruptcy courts by generally authorizing them to 2 “issue any order, process, or judgment that is necessary or 3 appropriate to carry out the provisions of this title.” § 105(a) 4 (emphasis added). But this authorization does not allow 5 bankruptcy courts to depart from the Bankruptcy Code’s statutory 6 scheme or to take acts inconsistent with it. See Saxman v. Educ. 7 Credit Mgmt. Corp. (In re Saxman), 325 F.3d 1168, 1174-75 (9th 8 Cir. 2003) (holding that § 105(a) does not give bankruptcy court 9 a “roving commission to do equity” but rather only authorizes the 10 court to act within the confines otherwise set by the Bankruptcy 11 Code); Johnson v. TRE holdings LLC (In re Johnson), 346 B.R. 12 190, 196 (9th Cir. BAP 2006) (same); In re Valenti, 310 B.R. at 13 145-46 (holding that § 105(a) “is not an independent basis for 14 relief beyond the scope of the other sections of the Bankruptcy 15 Code.”). 16 Simply put, Congress made it abundantly clear in § 1144(a) 17 that a revocation action must be brought within six months of 18 confirmation, and § 105(a) does not permit the bankruptcy court 19 to depart from the statutory scheme and extend the § 1144(a) time 20 limit. 21 The bankruptcy court was exercising its discretion when it 22 declined to delay its ruling on the claim objection, In re 23 Sustaita, 438 B.R. at 211, and we will not disturb that exercise 24 of discretion absent a showing of prejudice. Id. Because 25 postponing the decision on the claim objection so that Lopez 26 could pursue relief under § 1144(a) and § 105(a) would have been 27 futile, the bankruptcy court could not have abused its discretion 28

14 1 when it declined to delay its decision on the claim objection.9 2 Lopez makes a number of other arguments in her appeal 3 briefs, but none of them have any merit. They all hinge on the 4 premise that the VHS Retirement Plan was a separate entity from 5 VHS and that neither the bankruptcy court nor VHS properly could 6 have affected the VHS Retirement Plan’s assets or obligations. 7 Even if we were to assume that the VHS Retirement Plan was a 8 separate entity, nothing that Lopez argues explains why this 9 would alter Lopez’s rights as against VHS on account of the proof 10 of claim that Lopez filed against VHS. If, as Lopez contends, 11 the VHS Retirement Plan is a separate entity and the VHS 12 Retirement Plan (rather than VHS) is obligated to provide to her 13 retirement benefits,10 these facts tend to undermine rather than 14 enhance any argument that Lopez holds an allowable claim for 15 retirement benefits against VHS. In short, regardless of whether 16 the VHS Retirement Plan is a separate entity from VHS, none of 17 18 9 Sustaita cited four factors relevant to deciding whether 19 the trial court properly exercised its discretion in denying a continuance: (1) the appellant’s diligence, (2) the likely 20 efficacy of granting a continuance in satisfying the articulated need therefor, (3) inconvenience to the opposing party, and 21 (4) harm resulting from the denial of the continuance. While the 22 absence of prejudice is sufficient by itself to end the inquiry, we note that, based on the circumstances presented here, none of 23 the cited factors militated in favor of a continuance of the claim objection proceeding. 24 10 In both her opposition to the claim objection and in her 25 opening appeal brief, Lopez argued that she is not even a proper 26 creditor of VHS based on her entitlement to retirement benefits from the VHS Retirement Plan. Lopez does not seem to appreciate 27 that, if she is not a creditor of VHS, she cannot be entitled to an allowed claim against VHS or to a distribution from VHS’s 28 bankruptcy case.

15 1 Lopez’s arguments explain why Lopez is entitled to a distribution 2 for retirement benefits under VHS’s Chapter 9 Plan. 3 CONCLUSION 4 For all of the reasons set forth above, we AFFIRM the 5 bankruptcy court’s order sustaining the Committee Parties’ claim 6 objection and disallowing Lopez’s claim. 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28