Triton Pacific Capital Partners v. Cenegenics CA2/5

CourtCalifornia Court of Appeal
DecidedJune 27, 2024
DocketB328247
StatusUnpublished

This text of Triton Pacific Capital Partners v. Cenegenics CA2/5 (Triton Pacific Capital Partners v. Cenegenics CA2/5) is published on Counsel Stack Legal Research, covering California Court of Appeal primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Triton Pacific Capital Partners v. Cenegenics CA2/5, (Cal. Ct. App. 2024).

Opinion

Filed 6/27/24 Triton Pacific Capital Partners v. Cenegenics CA2/5 NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

SECOND APPELLATE DISTRICT

DIVISION FIVE

TRITON PACIFIC CAPITAL B328247 PARTNERS, LLC, (Los Angeles County Plaintiff and Appellant, Super. Ct. No. 18STCV03423) v.

CENEGENICS, LLC, et al.,

Defendants and Respondents.

APPEAL from an order of the Superior Court of Los Angeles County, Kevin C. Brazile, Judge. Affirmed. Chora Young & Manasserian, Paul P. Young, Joseph Chora and Armen Manasserian for Plaintiff and Appellant. Goe Forsythe & Hodges, Ronald S. Hodges and Mike D. Neue for Defendants and Respondents. Plaintiff and appellant Triton Pacific Capital Partners, LLC, appeals from a post-judgment order denying motions to amend the judgment to add Kristy Berry and BestLife Holdings, Inc. (BestLife)1 as judgment debtors. On appeal, Triton contends the trial court abused its discretion because: (1) the court’s order did not expressly discuss certain alter ego factors and did not weigh the factors in favor of Triton; (2) the order did not expressly discuss Triton’s equitable theory based on principles expressed in Carolina Casualty Ins. Co. v. L.M. Ross Law Group, LLP (2012) 212 Cal.App.4th 1181 (Carolina Casualty); and (3) the trial court misunderstood and misapplied the legal standard for determining successor liability following a foreclosure. We conclude no abuse of discretion has been shown, and therefore, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

Founding and Financial Condition of Cenegenics

In 1997, John Adams and Alan Mintz founded Cenegenics, LLC (Cenegenics), to provide age management services to patients. Cenegenics hired Kristy Berry as a patient services associate in 1999. After a series of promotions, Berry became the chief operating officer of Cenegenics in 2005. In 2012, the company’s financial condition began to decline. Cenegenics entered into a credit agreement in September 2013,

1 BestLife Holdings, Inc., was originally formed as a limited liability company and later converted to a corporation. The entities are collectively referred to herein as BestLife.

2 which was amended and restated in February 2016 (the Oaktree loan), providing Cenegenics with a term loan of $33,500,000 and a revolving loan of $2 million from Oaktree Specialty Lending Corporation, formerly known as Fifth Street Finance Corp. The Oaktree loan was secured by certain collateral, including Cenegenics’ accounts, equipment, and intellectual property. In 2015, Berry was appointed to Cenegenics’ board of managers, and in 2017, she became president of Cenegenics. As president and chief operating officer of Cenegenics, Berry oversaw the daily operations of the entire organization. Berry owned a 0.7 percent equity interest in Cenegenics. Adams continued to be the chief executive officer of Cenegenics. Adams, his trusts, and Mintz’s trusts collectively owned 87.1 percent of the equity in Cenegenics. Cenegenics’ financial condition continued to decline each year. Cenegenics repeatedly failed to make payments on the Oaktree loan. Cenegenics attempted to restructure its debt, secure additional financing, or sell the company to prevent liquidation. Several companies expressed interest in purchasing Cenegenics. In June 2018, the private equity firm Triton executed an agreement requiring Cenegenics to reimburse up to $250,000 in expenses for due diligence. The following month, Triton provided a letter of intent to purchase Cenegenics for $20 million. The private investment firm ROCA Partners, LLC (ROCA) also considered purchasing Cenegenics, but learned the company was in financial distress, key earnings measures had declined, and Oaktree held a senior secured loan. Ultimately, no buyer agreed to purchase the company. On November 2, 2018, Triton filed a breach of contract complaint against Cenegenics, alleging that Cenegenics failed to

3 reimburse the $250,000 fee for due diligence related to the potential purchase of the company. In April 2019, Berry, in her position as chief operating officer, verified Cenegenics’ responses to form interrogatories. In November 2019, Berry sat for her deposition. She testified about events underlying the litigation. Triton took the deposition of Adams as the person most knowledgeable about negotiations to acquire Cenegenics. After declining to purchase Cenegenics, ROCA had begun negotiating with Oaktree to purchase the Oaktree loan. The balance owed on the Oaktree loan was approximately $42 million, but Cenegenics’ earnings before interest, taxes, depreciation, and amortization were less than $3 million in 2019. At the end of January 2020, Oaktree agreed to sell the Oaktree loan to ROCA for $2 million. ROCA formed AgeWell Partners, LLC (AgeWell) as the investment entity to acquire the Oaktree loan. On January 31, 2020, AgeWell purchased the Oaktree loan from Oaktree, including the security interest in Cenegenics’ assets, for $2 million. The security interests were assigned through amended financing statements. In March 2020, Berry resigned from Cenegenics’ board of managers. On March 20, 2020, Triton filed a motion for summary judgment in the breach of contract action.

Foreclosure of the Oaktree Loan

On May 5, 2020, AgeWell provided Cenegenics with a notice of default, acceleration of loan, and demand for immediate

4 payment, and an offer to accept the collateral in full satisfaction of debt. The following day, Cenegenics acknowledged its default under the Oaktree loan and consented to AgeWell’s offer to accept the collateral. AgeWell formed BestLife on May 29, 2020. Cenegenics filed an opposition to Triton’s summary judgment motion. After a hearing on June 30, 2020, the trial court granted Triton’s motion for summary judgment. In July 2020, Cenegenics transferred the collateral, including its intellectual property, to AgeWell. Adams signed the transfer documents as chief executive officer on behalf of Cenegenics. Cenegenics also executed a general assignment and bill of sale with AgeWell, transferring the collateral and specific assets to AgeWell in satisfaction of Cenegenics’ obligations. The general assignment and bill of sale expressly excluded several assets and liabilities. It excluded stock and other equity interests in Cenegenics or any ownership interest in any Cenegenics subsidiary. It also expressly excluded several liabilities, including contingent liability for litigation with Triton of more than $250,000. Adams executed the general assignment on behalf of Cenegenics. AgeWell contributed the assigned assets to BestLife in exchange for a $15 million promissory note and an equity interest in the company. BestLife owns several health and wellness brands, including the brand Cenegenics (hereinafter the Brand), Outset Health, and Apricot. In July 2020, Adams’ position as chief executive officer of Cenegenics ended. Cenegenics’ headquarters was vacated during the foreclosure process. BestLife extended employment offers to several of Cenegenics’ former employees, but also hired new employees for the Brand, Outset Health, and Apricot.

5 BestLife appointed Carly Stockdale as the chief executive officer of BestLife, appointed Berry as chief executive officer of the Brand, and hired a management team.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Minton v. Cavaney
364 P.2d 473 (California Supreme Court, 1961)
Ray v. Alad Corp.
560 P.2d 3 (California Supreme Court, 1977)
NEC Electronics Inc. v. Hurt
208 Cal. App. 3d 772 (California Court of Appeal, 1989)
Maloney v. American Pharmaceutical Co.
207 Cal. App. 3d 282 (California Court of Appeal, 1988)
Sonora Diamond Corp. v. Superior Court
99 Cal. Rptr. 2d 824 (California Court of Appeal, 2000)
Troyk v. Farmers Group, Inc.
171 Cal. App. 4th 1305 (California Court of Appeal, 2009)
Pope v. Babick
229 Cal. App. 4th 1238 (California Court of Appeal, 2014)
Schneer v. Llaurado
242 Cal. App. 4th 1276 (California Court of Appeal, 2015)
McDermott Will & Emery LLP v. Superior Court of Orange County
10 Cal. App. 5th 1083 (California Court of Appeal, 2017)
Greenspan v. LADT LLC
191 Cal. App. 4th 486 (California Court of Appeal, 2010)
Misik v. D'Arco
197 Cal. App. 4th 1065 (California Court of Appeal, 2011)
Cleveland v. Johnson
209 Cal. App. 4th 1315 (California Court of Appeal, 2012)
Carolina Casualty Insurance v. L.M. Ross Law Group, LLP
212 Cal. App. 4th 1181 (California Court of Appeal, 2012)
Mechling v. Asbestos
240 Cal. Rptr. 3d 900 (California Court of Appeals, 5th District, 2018)

Cite This Page — Counsel Stack

Bluebook (online)
Triton Pacific Capital Partners v. Cenegenics CA2/5, Counsel Stack Legal Research, https://law.counselstack.com/opinion/triton-pacific-capital-partners-v-cenegenics-ca25-calctapp-2024.