Securities And Exchange Commission v. SiliconSage Builders, LLC

• Court: District Court, N.D. California
• Decided: August 26, 2022
• Docket: 3:20-cv-09247
• Status: Unknown

Opinion

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 SECURITIES AND EXCHANGE Case No. 20-cv-09247-SI COMMISSION, 8 Plaintiff, ORDER RE: MOTION FOR LEAVE TO 9 FILE INTERLOCUTORY APPEAL v. FROM COURT'S JULY 7, 2022 ORDER 10 SILICONSAGE BUILDERS, LLC, et al., Re: Dkt. No. 386 11 Defendants. 12 13 Marwan and Rana Naboulsi have filed a motion for leave to file an interlocutory appeal from 14 the Court’s July 7, 2022 order granting the Receiver’s motion to reject certain executory purchase 15 and sale agreements. Ravi Jagannathan has joined in the motion. Dkt. No. 399.1 The Receiver 16 opposes the motion, and Acres Loan Origination, LLC has joined in the Receiver’s opposition. The 17 matter was scheduled for a hearing on August 26, 2022, and the Court vacated the hearing and took 18 the matter under submission. 19 The Court notes that although the Receiver opposes the motion, the Receiver also states that 20 “an order rejecting a contract is likely not an interlocutory appeal requiring leave of this Court to 21 appeal.” Dkt. No. 392 at 1 (citing In re Taylor (Delightful Music Ltd. v. Taylor), 913 F.2d 102, 104 22 (3d Cir. 1990)). In Taylor, the Third Circuit held that a bankruptcy court’s order approving the 23 rejection of executory personal services contracts pursuant to 11 U.S.C. § 365 was “final and 24 appealable” for purposes of 28 U.S.C. § 1291 because “[t]he order approving rejection of appellant’s 25 contracts fully and finally resolved a discrete set of issues, leaving no related issues for later 26 determination.” In re Taylor, 913 F.2d at 104. 27 1 The Court has been unable to locate any authority within the Ninth Circuit regarding whether 2 an order rejecting executory contracts in a receivership is a final and appealable order. In the 3 absence of any contrary authority, the Court finds In re Taylor persuasive. When the Court granted 4 || the Receiver’s motion to reject certain executory contracts, the Court looked to 11 U.S.C. § 365 and 5 cases interpreting that Bankruptcy Code provision for guidance. The July 7, 2022 order fully and 6 || finally resolved the legal question of whether the purchasers would be able to proceed with their 7 agreements to purchase condominiums, or whether those agreements would be rejected. In the 8 || Court’s view, the fact that the purchasers may pursue liens against the property does not change the 9 || analysis regarding finality and appealability because in Taylor, the appellant whose contract was 10 || rejected was similarly left with the remedy of filing a “claim against the debtor’s estate for whatever 11 damages the rejection/breach has occasioned.” Jd. at 107. 12 In an abundance of caution, if the Ninth Circuit determines that the July 7, 2022 order is a 13 non-appealable interlocutory order, the Court alternatively GRANTS the motion for certification of 14 || the order for interlocutory appeal pursuant to 28 U.S.C. § 1292(b).

a 16 IT IS SO ORDERED. Gan. belie || Datea: August 26, 2022 SUSAN ILLSTON 19 United States District Judge 20 21 22 23 24 25 26 27 28