In re: James C. Gianulias Cameo Homes, 9th Cir. BAP (2013)

7/25/2019 In re: James C. Gianulias Cameo Homes, 9th Cir. BAP (2013)

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1 Thi s di sposi t i on i s not appr opr i at e f or publ i cat i on.Al t hough i t may be ci t ed f or whatever persuasi ve val ue i t may have( see Fed. R. App. P. 32. 1) , i t has no pr ecedent i al val ue. See 9t hCi r . BAP Rul e 8013- 1.

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UNITED STATES BANKRUPTCY APPELLATE PANEL

OF THE NINTH CIRCUIT

I n r e: ) BAP No. CC- 12- 1194- PaDKl)

J AMES C. GI ANULI AS; ) Bankr . No. 08- 13150- CBCAMEO HOMES, ) ( subst ant i vel y consol i dat ed

) wi t h No. 08- 13151- CB)Debt or s. )

___________________________________))

VRE ACCEPTANCE, LLC; VI RTUAL )REALI TY ENTERPRI SES, LLC, )

)Appel l ant s, )

)v. ) M E M O R A N D U M1

)THOMAS SEAMAN, Tr ust ee of t he )Cr edi t or s Tr ust f or t he Reor gani zed)Debtors J ames C. Gi anul i as and )Cameo Homes, )

)Appel l ee. )

___________________________________)

Ar gued and Submi t t ed on Februar y 22, 2013,at Pasadena, Cal i f or ni a

Fi l ed - Apr i l 5, 2013

Appeal f r om t he Uni t ed St at es Bankrupt cy Cour tf or t he Cent r al Di st r i ct of Cal i f or ni a

Honor abl e Cat her i ne E. Bauer , Bankrupt cy J udge, Pr esi di ng

Appear ances: Ber ger on H. Pi er r e of Squi r e Sander s ( US) LLPargued f or appel l ant s VRE Accept ance, LLC andVi r t ual Real i t y Ent er pr i ses, LLC; El i ssa D. Mi l l erof Sul meyerKupet z, APC argued f or appel l ee ThomasSeaman.

FILEDAPR 05 2013

SUSAN M SPRAUL, CLERKU.S. BKCY. APP. PANELOF THE NINTH CIRCUIT


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282 The Honor abl e Chr i st opher M. Kl ei n, Chi ef Bankrupt cy J udge

f or t he East er n Di st r i ct of Cal i f or ni a, si t t i ng by desi gnat i on.

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Bef or e: PAPPAS, DUNN and KLEI N, 2 Bankr upt cy J udges.

Memor andumby J udge PappasConcur r ence by J udge Kl ei n

Cr edi t or s VRE Accept ance, LLC ( VREA) and Vi r t ual Real t y

Ent er pr i ses, LLC ( Vi r t ual ) appeal t he or der of t he bankrupt cy

cour t denyi ng t hei r Mot i on f or Det er mi nat i on That Thei r Cl ai ms

Were Pr oper l y Fi l ed. We REVERSE.

FACTS

J ames C. Gi anul i as ( Gi anul i as) was a Cal i f or ni a r eal est at e

devel oper who devel oped dozens of commerci al and resi dent i al r eal

est at e pr oj ect s over t he l ast f or t y year s. Gi anul i as busi nesspr act i ce was t o vest t he t i t l e t o each new devel opment pr oj ect i n

a separ at e ent i t y, usual l y a l i mi t ed l i abi l i t y company or l i mi t ed

par t ner shi p.

I n 1968, Gi anul i as f ounded Cameo Homes, a Cal i f orni a

cor por at i on ( Cameo) ; he was i t s sol e shar ehol der . For each

pr oj ect he devel oped, Gi anul i as woul d i nst al l Cameo as t he gener al

part ner or managi ng member of t he owner- ent i t y, t ogether wi t h

gr ant i ng i t a smal l owner shi p i nt er est i n t he ent i t y. Gi anul i as

woul d hol d t he r emai ni ng ownershi p i nt erest s and, al t hough Cameo

was usual l y desi gnat ed as t he managi ng ent i t y, Gi anul i as

cont r ol l ed each pr oj ect .

One such pr oj ect was a pr oposed mul t i - phase, ei ght y- t hr ee

uni t condomi ni um pr oj ect i n Car l sbad, Cal i f or ni a ( t he Pr oj ect ) .

Gi anul i as organi zed Ar enal Road, LLC ( Ar enal Road) t o devel op

t he Proj ect . On Sept ember 16, 2006, Ar enal Road ent ered i nt o a


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const r uct i on l oan agr eement wi t h Bank Mi dwest whi ch al l owed i t t o

borr ow up t o $60, 629, 568. 00 f or t he Proj ect , secur ed by a Note and

Deed of Tr ust ( t he Const r uct i on Loan) on t he Pr oj ect . Gi anul i as

and Cameo bot h execut ed a si ngl e cont i nui ng guarant y agr eement

wi t h Bank Mi dwest on Sept ember 16, 2006, f or t he Const r uct i on

Loan. VREA pur chased t he Const r uct i on Loan f r om Bank Mi dwest on

J une 11, 2008. At t he t i me of pur chase by VREA, t he Const r uct i on

Loan bal ance was $11, 754, 741. 98. Af t er a def aul t , VREA f or ecl osed

on t he Proj ect on J une 13, 2008.

Al so on Sept ember 16, 2006, Ar enal Road obt ai ned a l oan f r om

Vi r t ual f or $11, 590, 118, secur ed by a Not e and Deed of Tr ust , t opur chase cer t ai n r eal pr oper t y r el at ed t o t he Pr oj ect ( t he Land

Loan) . Gi anul i as and Cameo al so both si gned a si ngl e guarant y of

t he Land Loan.

On J une 6, 2008, t hr ee cr edi t or s ( not i nvol ved i n t hi s

appeal ) f i l ed separ at e i nvol unt ar y bankrupt cy pet i t i ons under

chapt er 7 agai nst Gi anul i as and Cameo. The Gi anul i as bankr upt cy

case was assi gned case number 08- 13150; t he Cameo case was

assi gned case number 08- 13151. Gi anul i as and Cameo each

event ual l y consent ed t o t he ent r y of an Or der f or Rel i ef , and t hen

r equest ed t hat t he cases be conver t ed t o chapt er 11 on J ul y 1,

2008. The bankrupt cy cour t gr ant ed t hei r mot i ons t o conver t t he

t wo bankr upt cy cases t o chapt er 11 on J ul y 2, 2008.

On J ul y 22, 2008, Gi anul i as and Cameo f i l ed mot i ons f or

or der s aut hor i zi ng t he j oi nt admi ni st r at i on of t he t wo separ at e

bankr upt cy cases. The bankr upt cy cour t gr ant ed t he mot i ons i n

par t on J ul y 25, 2008, al l owi ng j oi nt admi ni st r at i on of t he cases,

but def er r i ng any deci si on r egar di ng consol i dat i on of t he debt or s


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3 From t hi s poi nt f or war d i n our chr onol ogy, unl essot her wi se necessar y, we wi l l r ef er t o Gi anul i as and Cameocol l ect i vel y as t he Debt or s.

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account s f or a f ur t her hear i ng. Af t er a f i nal hear i ng on t he

mot i ons was conduct ed on August 8, 2008, t he bankr upt cy court

conf i r med i t s or der of J ul y 25, 2008, t hat t he cases wer e j oi nt l y

admi ni st er ed, but deni ed t he request s t o consol i dat e the two

debt or s account s. 3

On August 27, 2008, t wo di f f er ent at t or neys associ at ed wi t h

Squi r e Sander s LLP ( Squi r e Sander s) f i l ed separ at e pl eadi ngs

ent i t l ed Not i ce of Appear ance and Request f or Not i ce i n t he

Cameo bankrupt cy case. The not i ces i ndi cat e t hat t he at t or neys

ar e an i nt er est ed par t y; t hey do not i ndi cat e t hat t he at t or neys

were appear i ng as counsel i n t he bankr upt cy cases f or anypar t i cul ar par t i es.

On Sept ember 12, 2008, t he Debt ors f i l ed and ser ved t wo

separ at e not i ces advi si ng i nt er est ed par t i es of t he bar dat e t hat

had been set by t he bankr upt cy cour t f or f i l i ng pr oof s of cl ai m i n

t he bankrupt cy cases. A pr oof of cl ai m ( POC) f or m was at t ached

t o each not i ce and, whi l e t he cont ent of t he t wo not i ces was

i dent i cal , t he pr oof of cl ai m f or m at t ached t o each not i ce was

sl i ght l y di f f er ent . The POC f or m at t ached t o t he f i r st - f i l ed

not i ce, i n t he space l abel ed Name of Debt or , cont ai ns t wo check

boxes, one each f or Gi anul i as and Cameo, and i n t he space l abel ed

Case Number , t he bankr upt cy cases numbers f or bot h bankr upt cy

cases, 08- 13150 f or Gi anul i as, and 08- 13151 f or Cameo, appear .

The POC f or m at t ached t o t he l at er - f i l ed not i ce l i st s onl y

Gi anul i as i n t he space l abel ed Name of Debt or and onl y t he case


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4 The POC f orms f i l ed by Vi r t ual and VREA t hr ough counselwer e di f f er ent i n f or mat f r om ei t her of t he t wo f or ms sent byDebt or s t o t hem at t ached t o t he not i ces of bar dat e. The f or msaccompanyi ng t he not i ces of bar date had sevent een sect i ons; t hePOCs submi t t ed by VRE and Vi r t ual had t went y sect i ons. The f ormatof t he i nf or mat i on r equest ed by t he POCs was al so sl i ght l ydi f f er ent . The f i l ed POCs bot h appear t o subst ant i al l y compl y

wi t h, and pr ovi de t he i nf or mat i on r equi r ed i n, Of f i ci al For m B- 10.See Rul e 9009 ( pr ovi di ng t hat t he Of f i ci al For ms pr escr i bed byt he J udi ci al Conf er ence of t he Uni t ed St at es shal l be observed andused wi t h al t er at i ons as may be appr opr i at e) ; see al so Advi soryComm. Note (1983) t o Rul e 9009 ( The use of Of f i ci al Forms hasgener al l y been hel d subj ect t o a r ul e of subst ant i alcompl i ance. ) . Appel l ees have never chal l enged t he adequacy oft he f i l ed POCs.

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number f or t he Gi anul i as bankr upt cy case i n t he space l abel ed

Case Number . Bot h not i ces pr ovi ded t hat t he l ast day t o f i l e a

POC was November 11, 2008.

On November 10, 2008, VREA and Vi r t ual each f i l ed a POC wi t h

t he bankr upt cy cour t . VREA f i l ed POC 38 i n t he amount of

$12, 131, 120. The f i l ed POC l i st ed onl y one debt or , Gi anul i as, and

onl y one of t he bankr upt cy case numbers, 08- 13150. At t ached t o

POC 38 was, i n addi t i on t o copi es of al l of t he Const r uct i on Loan

document s, a copy of t he cont i nui ng guarant y execut ed by both

Gi anul i as and Cameo.

Vi r t ual f i l ed POC 39 i n t he amount of $12, 981, 470. 94. ThatPOC al so l i st s onl y one debt or , Gi anul i as, and one case number ,

08- 13150. A copy of t he guarant y of payment of t he Land Loan

si gned by bot h Gi anul i as and Cameo was at t ached t o POC 39.

Both POCs were si gned by Squi r e Sanders at t orneys, and l i st ed

t he l aw f i r m s addr ess. Nei t her of t he POCs ut i l i zed t he f or m

POCs at t ached to t he not i ces. 4

Debt or s had f i l ed a mot i on t o subst ant i vel y consol i dat e t he

t wo bankrupt cy cases on November 7, 2008. Among t he f act or s


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i dent i f i ed by Debt or s i n t he mot i on i n f avor of subst ant i ve

consol i dat i on was t he chal l enge i n deal i ng wi t h t he many

i nt er l ocki ng guar ant i es execut ed by Gi anul i as and Cameo. The

mot i on expl ai ned:

A subst ant i al number of t he l ender s t hat pr ovi dedf i nanci ng t o t he Pr oj ect Level ent i t i es i nsi st ed t hatCameo and Gi anul i as guarant ee t hei r obl i gat i ons. Thecl ai ms f r om t hi s cr edi t or const i t uency agai nst Gi anul i ast ot al appr oxi mat el y $135 mi l l i on. These cl ai ms compr i seei ght y- ei ght per cent of t he t ot al cl ai ms agai nst hi sest at e. . . . Si nce subst ant i al l y al l of t he guar ant eecl ai ms f i l ed agai nst Cameo s est at e ar e co- guar ant eed byGi anul i as, Cameo s cl ai ms base i s ef f ect i vel y a subsetof Gi anul i as cl ai ms base.

The cr edi t or s who obt ai ned guar ant ees f r om Cameo

and Gi anul i as di d not del i neat e what par t of each cl ai mwas bei ng guarant eed by Gi anul i as and what par t wasguarant eed by Cameo, or otherwi se t ake any act i on t hatwoul d suggest t hey r el i ed on t he separ at e cr edi t orst at us of ei t her ent i t y. To t he cont r ar y, t he evi denceconf i r ms t hat t hese cl ai mant s vi ewed Cameo s andGi anul i as asset s and l i abi l i t i es as a common andobl i gat or y recover y pot , i n t he event of nonpayment ,si nce t hey made no ef f or t t o al l ocat e t hei r debt sbetween t he two obl i gors.

Mot i on f or Or der Subst ant i al l y Consol i dat i ng Chapt er 11 Est at e of

Cameo Homes i nt o Chapt er 11 Est ate of J ames G. Gi anul i as, at 6- 7,

November 7, 2008.

A J oi nt Commi t t ee of Unsecur ed Cr edi t or s f or t he t wo

bankr upt cy cases had been appoi nt ed on August 4, 2008. The J oi nt

Commi t t ee and Debt or s execut ed a st i pul at i on t o subst ant i vel y

consol i date the two bankr upt cy cases, whi ch was appr oved i n an

order ent ered by t he bankr upt cy cour t on December 10, 2008.

I ncl uded i n t he or der appr ovi ng t he st i pul at i on was t he f ol l owi ng

condi t i on:

Subst ant i ve consol i dat i on of t he Gi anul i as and Cameoest at es wi l l have no ef f ect , ei t her dur i ng t he cases orpost - conf i r mat i on, on t he r i ght s and obl i gat i ons of


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ei t her est at e, or of Gi anul i as or Cameo as debt or s, t ot hi r d par t i es wi t h r espect t o any cont r act or agr eementt o whi ch ei t her Gi anul i as or Cameo i s a par t y.

St i pul at i on and Or der Subst ant i vel y Consol i dat i ng Chapt er 11

Est at e of Cameo Homes i nto Chapter 11 Est at e of J ames C.

Gi anul i as, at 5, December 11, 2008.

Wi t hout obj ect i on, t he bankrupt cy cour t conf i r med t he

Debt or s Four t h Amended Pl an of Reor gani zat i on i n t he consol i dat ed

bankrupt cy case on J ul y 19, 2010. Under t he conf i r med pl an, a

Cr edi t or s Tr ust ( t he Tr ust ) was establ i shed t o over see recei pt s

and di sbur sement s t o unsecur ed cr edi t or s i n Cl ass 3 under t he

pl an, whi ch woul d i ncl ude t he VREA and Vi r t ual cl ai ms i f al l owed.Cl ass 3 pr ovi ded t hat t hose cl ai ms i n t he subst ant i vel y

consol i dat ed case woul d be pai d ei t her i n f ul l , or pr o r at a wi t h

al l ot her unsecur ed cl ai ms, whi chever amount was l ess. The Tr ust

was r esponsi bl e f or obj ect i ng to unsecur ed cl ai ms by December 6,

2010, and any cl ai ms not obj ect ed t o were t o be deemed al l owed

under t he pl an. Payment s t o t he unsecur ed cr edi t ors were

or i gi nal l y schedul ed t o begi n on Sept ember 12, 2012.

On December 3, 2010, t he t r ust ee f or t he Tr ust , VREA and

Vi r t ual ent er ed i nt o a st i pul at i on ext endi ng t he t i me f or t he

Tr ust t o f i l e an obj ect i on t o t he cr edi t or s cl ai ms t hrough

Febr uar y 7, 2011. Thi s f i r st st i pul at i on acknowl edged t hat

[ i ] n t he Case [ VREA and Vi r t ual ] f i l ed sever al cl ai ms agai nst

bot h Debt or s. A second, t hi r d and f our t h st i pul at i on wer e

execut ed t o extend t he t i me t o obj ect t o t hese cl ai ms unt i l ,

event ual l y, J une 17, 2011. I n cont r ast t o t he f i r st st i pul at i on,

however , t he second t hr ough f our t h st i pul at i ons acknowl edged onl y

t hat [ VREA and Vi r t ual ] f i l ed t wo cl ai ms.


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5 Tr ust ee s Thi r d St at us Repor t was not i ncl uded i n t heexcer pt s of r ecord, but may be f ound at docket number 943 of t heGi anul i as bankrupt cy case ( 08- 13150) . We may t ake j udi ci al not i ceof t he under l yi ng bankrupt cy recor ds wi t h r espect t o an appeal .O' Rour ke v. Seaboar d Sur . Co. ( I n r e E. R. Feger t , I nc. ) , 887 F. 2d955, 957- 58 ( 9t h Ci r . 1988) .

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The Tr ust had not obj ect ed t o t he VREA or Vi r t ual cl ai ms by

t he expi r at i on dat e pr ovi ded i n t he Four t h St i pul at i on, whi ch

dat e was not extended. I n Tr ust ee s Thi r d St at us Repor t f or t he

Gi anul i as Cr edi t or s Trust f i l ed on November 29, 2011, t he Tr ust ee

r epor t ed that :

Al l cl ai ms obj ect i ons have now been hear d andadj udi cat ed, however , t her e i s one remai ni ng pot ent i alopen i ssue wi t h r espect t o credi t or cl ai ms. Vi r t ualReal t y Ent er pr i ses and VRE Accept ance ( VRE) f i l edcl ai ms i n t he Gi anul i as case onl y. Af t er r evi ewi ngt hei r cl ai ms t he Tr ust ee deci ded not t o obj ect .However , VRE now cl ai ms t hat i t i s ent i t l ed t o cl ai ms i nboth t he Gi anul i as and Cameo case. ( At t he t i me cl ai mswer e f i l ed t he cases wer e j oi nt l y admi ni st er ed, notconsol i dat ed. ) I t i s t he Tr ust ee s posi t i on t hat VRE i s

not ent i t l ed t o a cl ai m i n bot h cases and di d not seekt he appr opr i at e remedy i n t he [ ] pr oper t i me f r ame( pr i or t o appr oval of t he Pl an) t o al l ow dual cl ai ms.

Tr ust ee s Thi r d Stat us Repor t f or t he Gi anul i as Cr edi t or s Tr ust ,

at 12, November 29, 2011. 5

On Febr uar y 28, 2012, VREA and Vi r t ual f i l ed a Mot i on f or

Det er mi nat i on That Thei r Cl ai ms Wer e Proper l y Fi l ed. They ar gued

i n t he mot i on t hat t hey had f i l ed pr oper , f or mal pr oof s of cl ai m

as t o bot h Gi anul i as and Cameo because t hey had compl i ed wi t h t he

Debt or s cl ai m f i l i ng pr ocess i n r el i ance on t he second bar dat e

not i ce, and t he accompanyi ng POC f orm, and t hat any f ai l ur e t o

compl y wi t h t he f i l i ng r equi r ement s r esul t ed f r om conf usi on

cr eat ed by t he Debt or s use of t wo bar dat e not i ces.

Al t er nat i vel y, t he credi t or s ar gued t hat t he pr oof s of cl ai m t hat

wer e f i l ed i n t he now- consol i dat ed bankrupt cy case shoul d be


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t r eat ed and al l owed as i nf or mal pr oof s of cl ai m i n t he Cameo

bankrupt cy case.

The Tr ust r esponded t o t he mot i on on Mar ch 7, 2012. The

Tr ust ar gued t hat t he bar not i ces wer e not ambi guous, t hat VREA

and Vi r t ual had admi t t ed r ecei vi ng bot h not i ces, t hat t he

credi t or s f i l ed pr oof s of cl ai m wer e i nadequat e t o const i t ut e a

f or mal pr oof of cl ai m i n t he Cameo case, t hat t he cr edi t or s

r equest t hat t he bankrupt cy cour t al l ow i nf or mal pr oof s of cl ai m

i n t he Cameo case was a bel at ed at t empt t o amend the f i l ed cl ai ms,

and t hat t he cr edi t or s had not est abl i shed t hat al l owance of t hei r

i nf or mal cl ai ms woul d not pr ej udi ce ot her cr edi t or s.A hear i ng on VREA and Vi r t ual s mot i on was hel d on March 27,

2012. Af t er hear i ng ar gument s of counsel , t he bankrupt cy cour t

announced i t s r ul i ng on t he r ecor d:

I m goi ng t o deny t he mot i on. These wer eadmi ni st r at i vel y consol i dat ed cases and bankrupt cyl awyer s know you have t o f i l e separ at e cl ai ms i n eachcase. They wer e not subst ant i vel y consol i dat ed. Ther ewer e t wo l awyer s and, f r ankl y, a pr oof of cl ai m i s af or m t hat counsel can do on t hei r own wi t hout get t i ng i tf r omt he cour t . I underst and your ar gument t hat somet i mes t her e s di f f er ent i nst r uct i on, but t o say that onenot i ce f i l ed basi cal l y at t he same t i me as anot hersomehow because i t s l ater f i l ed one you can i gnor e t hef act t hat t hey ar e onl y admi ni st r at i vel y consol i dat ed.I f eel t hat i s a t ot al l y i nappr opr i at e ar gument .

Hr g Tr . 23: 1624: 2, Mar ch 12, 2012.

The bankrupt cy cour t enter ed an or der denyi ng t he VREA and

Vi r t ual mot i on based on t he f i ndi ngs and concl usi ons as set f or t h

on t he record of t he pr oceedi ng and good cause appear i ng

t her ef or e. Nei t her t he or al r ul i ng nor t he bankrupt cy cour t s

or der denyi ng t he mot i on addr essed VREA and Vi r t ual s al t er nat i ve

argument t hat t hey had pr esent ed an al l owabl e i nf ormal pr oof of


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cl ai m i n t he Cameo case. The cr edi t or s t i mel y appeal ed.

JURISDICTION

The bankrupt cy cour t had j ur i sdi ct i on under 28 U. S. C. 1334

and 157( b) ( 2) ( B) . We have j ur i sdi ct i on under 28 U. S. C. 158.

ISSUE

Whether t he bankr upt cy cour t err ed i n deci di ng t hat VREA and

Vi r t ual had not f i l ed pr oper f or mal pr oof s of cl ai m i n t he Cameo

case.

Whether t he bankr upt cy cour t err ed i n concl udi ng t hat VREA

and Vi r t ual s f i l ed pr oof s of cl ai m i n t he Gi anul i as case shoul d

not be t r eat ed as al l owed i nf or mal pr oof s of cl ai m i n t he Cameocase.

STANDARDS OF REVIEW

The bankrupt cy cour t s i nter pret at i on of t he Bankr upt cy Code

and Rul es i s revi ewed de novo. Samson v. W. Capi t al Par t ners, LLC

( I n r e Bl i xset h) , 684 F. 3d 865, 869 ( 9t h Ci r . 2012) .

Whet her a val i d i nf or mal pr oof of cl ai m exi st s i n a

bankr upt cy case i s a quest i on of l aw r evi ewed de novo. Pac.

Resour ce Cr edi t Uni on v. Fi sh ( I n r e Fi sh) , 456 B. R. 413, 417 ( 9t h

Ci r . BAP 2011) . De novo r evi ew r equi r es t he Panel t o

i ndependent l y revi ew an i ssue, wi t hout gi vi ng def er ence t o the

bankrupt cy cour t ' s concl usi ons. See Cal . Fr anchi se Tax Bd. v.

Wi l shi r e Cour t yar d ( I n r e Wi l shi r e Cour t yar d) , 459 B. R. 416, 423

( 9t h Ci r . BAP 2011) ( ci t i ng Fi r st Ave. W. Bl dg. , LLC v. J ames

( I n r e Onecast Medi a, I nc. ) , 439 F. 3d 558, 561 ( 9t h Ci r . 2006) ) .

DISCUSSION

VREA and Vi r t ual ar gue t hat , on t hi s r ecor d, t hey pr oper l y

f i l ed f or mal pr oof s of cl ai m agai nst bot h Gi anul i as and Cameo


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because t hey compl i ed wi t h t he pr ocess r equi r ed i n t he bar dat e

not i ces, and t hat any f ai l ur e t o l i st Cameo i n t hei r f i l ed POCs

r esul t ed f r om conf usi on cr eat ed by the Debt or s' use of t wo bar

dat e not i ces. I n t he al t er nat i ve, VREA and Vi r t ual ar gue t hat t he

POCs t hey f i l ed i n t he Gi anul i as bankrupt cy case const i t ut ed

i nf or mal pr oof s of cl ai m i n t he Cameo case.

I n denyi ng t hei r mot i on, t he bankrupt cy cour t addr essed t he

f i r st of t he VREA and Vi r t ual ar gument s i n i t s or al r ul i ng at t he

Mar ch 12 hear i ng: t o say t hat one not i ce f i l ed basi cal l y at t he

same t i me as anot her somehow because i t ' s l at er f i l ed [ ] you can

i gnor e t he f act t hat t hey ar e onl y admi ni st r at i vel y consol i dat ed.I f eel t hat i s a t ot al l y i nappr opr i at e ar gument . The bankrupt cy

cour t di d not addr ess VREA and Vi r t ual s i nf or mal pr oof of cl ai m

ar gument .

I.

Virtual and VREA did not file formal proofsof claim in the Cameo bankruptcy case.

Under 501, a cr edi t or may f i l e a pr oof of cl ai m. Sect i on

502( a) pr ovi des t hat a cl ai m or i nt er est , pr oof of whi ch i s f i l ed

under sect i on 501 of t hi s t i t l e, i s deemed al l owed unl ess a par t y

i n i nt er est . . . obj ects. Rul e 3001( a) r equi r es that al l pr oof s

of cl ai m be i n wr i t i ng and conf or m subst ant i al l y to the Of f i ci al

For m. And Rul e 3001( f ) f ur t her pr ovi des t hat a pr oof of cl ai m

execut ed and f i l ed i n accor dance wi t h t hese r ul es shal l const i t ut e

pr i ma f aci e evi dence of t he val i di t y and amount of t he cl ai m. I n

chapt er 11 cases, Rul e 3003( c) ( 2) , consi st ent wi t h 1111( a) ,

requi res a credi t or t o f i l e t he proof of cl ai m i f i t s cl ai m i s

ei t her not schedul ed by t he debt or , or i s schedul ed as cont i ngent ,


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6 We t ake j udi ci al not i ce of t he schedul es f i l ed byGi anul i as i n bankr upt cy 08- 13150 and Cameo Homes i n bankr upt cy08- 13151. I n r e E. R. Feger t , I nc. , 887 F. 2d at 957- 58.

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unl i qui dat ed or di sput ed. Her e, i t i s undi sput ed t hat Cameo s

schedul es l i st t he cl ai ms of bot h VREA f or t he Const r uct i on Loan,

and Vi r t ual f or t he Land Loan, as debt s t hat ar e undi sput ed, but

cont i ngent and unl i qui dat ed. 6 Consequent l y, under t he Code and

Rul es, bot h VREA and Vi r t ual wer e r equi r ed t o f i l e a pr oof of

cl ai m i n t he Cameo bankr upt cy case.

When a bankr upt cy cour t orders t hat t wo or more bankr upt cy

cases be j oi nt l y admi ni st er ed, i t has no ef f ect on t he r i ght s and

obl i gat i ons of debt or s and cr edi t or s i n t hose cases:

J oi nt admi ni st r at i on i s t hus a procedur al t oolper mi t t i ng use of a si ngl e docket f or admi ni st r at i ve

mat t er s, i ncl udi ng t he l i st i ng of f i l ed cl ai ms, t hecombi ni ng of not i ces t o credi t or s of t he di f f er entest at es, and t he j oi nt handl i ng of ot her mi ni st er i almat t er s t hat may ai d i n expedi t i ng t he cases.Rul e 1015, Advi sor y Commi t t ee Note ( 1983) . Used as amat t er of conveni ence and cost savi ng, i t does notcreat e subst ant i ve ri ght s.

Rei der v. FDI C ( I n r e Rei der ) , 31 F. 3d 1102, 1109 ( 11t h Ci r .

1994) . See al so Bunker v. Peyton ( I n r e Bunker ) , 312 F. 3d 145,

153 ( 4t h Ci r . 2002) ( Under j oi nt admi ni st r at i on t he est at e of

each debt or r emai ns separ at e and di st i nct . . . . J oi nt

admi ni st r at i on does not af f ect t he subst ant i ve r i ght s of ei t her

t he debt or or hi s or her cr edi t or s. ) ; Unsecur ed Cr edi t or s Comm.

v. Leavi t t St r uct ur al Tubi ng Co. , 55 B. R. 710, 712 ( N. D. I l l .

1985) ( j oi nt admi ni st r at i on i s mer el y a mat t er of conveni ence and

cost savi ng; i t does not creat e subst ant i ve r i ght s) ;

I n r e Est r ada, 224 B. R. 132, 135 ( Bankr. S. D. Cal . 1998) ( unt i l

subst ant i vel y consol i dat ed, j oi nt l y admi ni st er ed est at es ar e


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separ at e) .

I n a j oi nt admi ni st r at i on, t he cl ai ms of credi t or s i n one

case ar e t r eat ed separ at el y f r om cl ai ms i n t he ot her cases.

The pur pose of j oi nt admi ni st r at i on i s t o make caseadmi ni st r at i on easi er and l ess expensi ve than i nsepar at e cases, wi t hout af f ect i ng t he subst ant i ve r i ght sof cr edi t or s ( i ncl udi ng i nt er - debt or cl ai ms) . Ther e i sno mer gi ng of asset s and l i abi l i t i es of t he debt or s, andi nt er - ent i t y cl ai ms sur vi ve. Cr edi t or s of each debt orcont i nue t o l ook t o t hat debt or f or payment of t hei rcl ai ms.

Gi l l v. Si er r a Pac. Const r uct i on, I nc. ( I n r e Par kway Cal abasas,

Ltd. ) , 89 B. R. 832, 836 ( Bankr . C. D. Cal . 1988) , af f d, 949 F. 2d

1058 ( 9t h Ci r . 1991) ( emphasi s added) .On November 10, 2008, when VREA and Vi r t ual f i l ed t he POCs

l i st i ng Gi anul i as as t he debt or , and bear i ng onl y t he Gi anul i as

bankrupt cy case number , t he Gi anul i as and Cameo bankrupt cy cases

wer e bei ng j oi nt l y admi ni st er ed, but t he bankrupt cy cases had not

yet been subst ant i vel y consol i dat ed. As a r esul t , at t hat t i me,

VREA and Vi r t ual wer e not absol ved of t hei r obl i gat i on under t he

Bankrupt cy Code and Rul es t hat , i f t hey wi shed t o asser t a cl ai m

i n t he Cameo bankrupt cy case, t hey must f i l e a pr oof of cl ai m i n

t hat case. As expl ai ned by t he bankrupt cy cour t i n t hi s appeal ,

These were admi ni st r at i vel y consol i dat ed cases and bankrupt cy

l awyer s know you have t o f i l e separ at e cl ai ms i n each case.

The bankrupt cy cour t s r ul i ng i s consi st ent wi t h case l aw.

The Fi r st Ci r cui t consi der ed a compar abl e si t uat i on i n Li akas v.

Cr edi t or s Comm. of Dej a Vu, I nc. , 780 F. 2d 176 ( 1st Ci r . 1986) .

Ther e, t he bankrupt cy cases of r el at ed debtor s Har bor House and

Dej a Vu, I nc. wer e bei ng j oi nt l y admi ni st er ed, but had not been

subst ant i vel y consol i dat ed. 780 F. 2d at 176. A cr edi t or , Li akas,


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f i l ed a pr oof of cl ai m t hat l i st ed onl y Har bor House as t he

debt or . Li akas argued t hat because the debt was owed by both

Har bor House and Dej a Vu, t he f i l i ng of i t s pr oof of cl ai m i n

Har bor House was al so suf f i ci ent t o est abl i sh i t s cl ai m i n Dej a

Vu. The Fi r st Ci r cui t di sagr eed:

Ther e i s no i ndi cat i on t hat t he est at es of Har bor Houseand Dej a Vu were bei ng admi ni st ered as one est ate dur i ngt he bankrupt cy pr oceedi ngs. . . . The pr oof of cl ai mt hat Li akas f i l ed i n t he Har bor House pr oceedi ngs cannotbe const r ued as a cl ai m agai nst Dej a Vu, as i t di d notr ef er i n any way t o Dej a Vu as a debt or .

I d. at 179. For suppor t , t he cour t ci t ed t o an ear l i er deci si on

of t he Second Ci r cui t deci ded under t he Bankrupt cy Act .I n r e Chemo Pur o Mf g. Corp. , 213 F. Supp. 845 ( S. D. N. Y. 1962) ,

af f ' d and adopt ed as ci r cui t pol i cy sub nom. Ar t hur Ander sen & Co.

v. Vi ncent , 313 F. 2d 631 ( 2d Ci r . 1963) ( per cur i am) ( hol di ng t hat

a pr oof of cl ai m f i l ed i n one bankrupt cy case agai nst a

corporat i on coul d not be deemed t o have been f i l ed i n a bankr upt cy

case i nvol vi ng a subsi di ar y of t he cor por at i on) . See al so

Ne. Of f i ce & Commer ci al Propert i es v. Smi t h Val ve Cor p.

( I n r e Ne. Of f i ce & Commer ci al Pr oper t i es, I nc. ) , 178 B. R. 915

( Bankr . D. Mass 1995) ( hol di ng t hat a pr oof of cl ai m f i l ed i n one

case has no ef f ect as a cl ai m f i l ed i n anot her case. To be

ef f ect i ve, a cl ai m agai nst t he debt or must appear of r ecor d i n t he

debt or ' s case. ) .

VRE and Vi r t ual have ci t ed no aut hor i t y f or t he pr oposi t i on

t hat , i n t wo j oi nt l y admi ni st er ed cases, a pr oof of cl ai m f i l ed i n

one case shoul d be t r eat ed as a f or mal pr oof of cl ai m i n t he ot her

case. To t he cont r ar y, under t he appl i cabl e pr ovi si ons of t he

Code and Rul es, we concl ude that t he bankr upt cy cour t di d not err


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7 Ther e i s a cont i nui ng di sput e among t he par t i es regardi ngt he ef f ect of conf i r mat i on of t he pl an on f i l i ng of cl ai ms.Ar t i cl e VI I - F of t he pl an conf er r ed on t he Tr ust t he aut hor i t y andr esponsi bi l i t y f or obj ect i ng t o t he unsecur ed cl ai ms. Thedeadl i ne f or obj ect i ng t o cl ai ms was December 6, 2010. The Fi r stSt i pul at i on was execut ed on December 3, 2010, i n advance of t hedeadl i ne, and each of t he f our St i pul at i ons was appr oved by thebankrupt cy cour t . Ther ef or e t her e was no i nconsi st ency bet weent he pl an and t he extensi ons of t i me t o obj ect . I f we consi der t heal t er nat i ve ar gument t hat t her e never was an obj ect i on t o t hecl ai m f i l ed, and under t he Code, t he Rul es and t he pl an, an

( cont i nued. . . )

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i n not t r eat i ng t he Vi r t ual and VREA POCs f i l ed i n t he Gi anul i as

case as f or mal pr oof s of cl ai m i n t he Cameo case.

I nst ead of ci t i ng t o the Code or Rul es, Vi r t ual and VREA

ar gue on equi t abl e gr ounds t hat t hei r cl ai ms shoul d be al l owed i n

t he Cameo case. They cl ai m conf usi on was cr eat ed by t hei r

at t or neys r ecei pt of t he two bar dat e not i ces and accompanyi ng

POC f orms and al l ege i nequi t abl e conduct by the Trust ee.

At oral argument bef ore the Panel , counsel f or VREA and

Vi r t ual ur ged us t o r evi ew t he decl ar at i on of Pat r i ck J . Fi el ds, a

col l eague at Squi r e Sander s who was i nvol ved i n cast i ng bal l ot s

f or t he Gi anul i as pl an of r eor gani zat i on and t he negot i at i on oft he f our st i pul at i ons t o ext end t he t i me f or t he Tr ust t o obj ect

t o cl ai ms.

As t o t he bal l ot i ng on t he pl an, Fi el ds decl ar ed: The

bal l ot s di d not al l ow a credi t or t o speci f y t hat i t had a cl ai m

agai nst one, but not t he ot her debt or , but i f i t had done so, VREA

and Vi r t ual woul d have speci f i cal l y i ndi cat ed i t had cl ai ms

agai nst bot h Debt or s. Fi el ds Dec. at 3. We t ake t hi s as an

admi ssi on t hat VREA and Vi r t ual di d not speci f i cal l y i ndi cat e[ ]

t hat [ t hey] had cl ai ms agai nst bot h debt or s i n t he bal l ot i ng on

t he Gi anul i as pl an of r eor gani zat i on. 7


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7( . . . cont i nued)unchal l enged cl ai m i s deemed al l owed, we have concl uded f or t her easons st at ed i n t hi s sect i on t hat t her e never wer e f or mal cl ai msf i l ed i n t he Cameo case and t hus not deemed al l owed under ei t hert he pl an or t he Code and Rul es.

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As t o t he f our st i pul at i ons, Fi el ds decl ar ed t hat he si gned

t he Fi r st St i pul at i on on behal f of VREA and Vi r t ual , whi ch

i ncl uded t he st at ement , I n t he case VRE f i l ed sever al cl ai ms

agai nst bot h Debt or s. Fi el ds Dec. at 10. But i n r evi ewi ng t he

pr oposed Second St i pul at i on, Fi el ds decl ar ed I not ed t o

Ms. Mi l l er [ Tr ust counsel ] t hat t he l anguage i n t he dr af t had been

modi f i ed t o st at e t hat VRE f i l ed cl ai ms agai nst Gi anul i as. Af t er

some negot i at i on on t hat poi nt , t he dr af t st i pul at i on was modi f i ed

t o st at e: I n t he case, VRE f i l ed t wo cl ai ms. Fi el ds Dec. at

11 ( emphasi s added) . Fi el ds si gned t he Second, Thi r d and Four t h

St i pul at i ons, al l of whi ch cont ai ned t he st at ement t hat VRE f i l edt wo cl ai ms. Fi el ds Dec. at 12. The decl ar at i on cl ear l y

i ndi cat es t hat t he i ssue of t he number of cl ai ms was speci f i cal l y

subj ect t o a cont i nui ng negot i at i on bet ween VREA and Vi r t ual and

t he Tr ust . Consequent l y, we f i nd t hat t he Fi el ds Decl ar at i on does

not support VREA and Vi r t ual s ar gument t hat t he Tr ust act ed

i nequi t abl y i n del ayi ng i t s deci si on t hat cl ai ms wer e not f i l ed i n

t he Cameo case.

We f i nd t he cr edi t or s equi t abl e ar gument s unper suasi ve. As

not ed, t he Code and Rul es pr escr i be t he pr ocedur e f or f i l i ng

appr opr i at e pr oof s of cl ai m i n bankrupt cy cases, and t hat

pr ocedur e cannot be var i ed by t he pr ovi si ons of a debt or s not i ce

advi si ng of t he bar dat e. Mor eover , our r evi ew of t he bar dat e

not i ces ( whi ch we f i nd i dent i cal i n cont ent ) al l ows no r oom f or


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any conf usi on t hat credi t or s must f i l e pr oof s of cl ai m i n bot h

bankrupt cy cases t o shar e i n di st r i but i ons. That one of t he f or m

POCs l i st ed onl y one debt or and one bankr upt cy case number does

not change t hat .

I n addi t i on, t he al l egedl y i nequi t abl e conduct of Tr ust ee i s

of no moment , si nce even i f t he Tr ust ee wavered or del ayed i n

deci di ng whet her t o cont est t he st at us of t he VREA and Vi r t ual

cl ai ms i n t he Cameo case, al l of hi s act i ons, i ncl udi ng hi s

execut i on of t he st i pul at i ons, occur r ed l ong af t er t he bar dat e

f or f i l i ng t i mel y pr oof s of cl ai m had expi r ed. Equi t y af f or ds no

r emedy to VREA and Vi r t ual under t hese f act s.II.

The VRE and Virtual Proofs of Claim filed in the Gianulias CaseConstituted Informal Proofs of Claim in the Cameo case.

VREA and Vi r t ual al t er nat i vel y ar gue t hat t hei r f i l i ngs of

t he POCs i n t he Gi anul i as bankrupt cy case wer e suf f i ci ent t o

const i t ut e i nf or mal pr oof s of cl ai m i n t he Cameo bankrupt cy case.

The bankr upt cy cour t di d not di scuss t hi s ar gument at al l i n i t s

oral deci si on nor i n t he order . However , based upon our de novo

r evi ew of t he r ecor d, we concl ude t hat , under t he Ni nt h Ci r cui t s

l i ber al st andar d, t he POCs submi t t ed by VREA and Vi r t ual i n t he

Gi anul i as bankr upt cy case meet t he r equi r ement s f or al l owance of

i nf or mal pr oof s of cl ai m i n t he Cameo bankrupt cy case.

The i nf or mal proof of cl ai m doct r i ne has been l ong r ecogni zed

i n t he Ni nt h Ci r cui t . Pac. Res. Cr edi t Uni on v. Fi sh ( I n r e

Fi sh) , 456 B. R. 413, 417 ( 9t h Ci r . BAP 2011) . Si mpl y st at ed, " f or

a document t o const i t ut e an i nf or mal pr oof of cl ai m, i t must st at e

an expl i ci t demand showi ng the natur e and amount of t he cl ai m


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agai nst t he est at e, and evi dence an i nt ent t o hol d t he debt or

l i abl e. " 931 F. 2d at 622 ( quot i ng I n r e Sambo' s Rest aur ant s, I nc. ,

754 F. 2d 811, 815 ( 9t h Ci r . 1985) ) . Thi s doct r i ne i s an ext ensi on

of t he "so- cal l ed r ul e of l i ber al i t y i n amendment s t o credi t or s'

pr oof s of cl ai m so t hat t he f or mal cl ai m r el at es back t o

pr evi ousl y f i l ed i nf or mal cl ai m. " I n r e Hol m, 931 F. 2d at 622

( quot i ng I n r e Ander son- Wal ker I ndus. , I nc. , 798 F. 2d 1285, 1287

( 9t h Ci r . 1986) . As t he Ni nt h Ci r cui t has obser ved:

The r eason f or t hi s " l i ber al " r ul e i s el emental .Bankrupt cy cour t s are cour t s of equi t y, and must assur e"t hat subst ance wi l l not gi ve way to f or m, [ and] t hatt echni cal consi der at i ons wi l l not pr event subst ant i al

j ust i ce f r om bei ng done. " Pepper v. Li t t on, 308 U. S.295, 305, 84 L. Ed. 281, 60 S. Ct . 238 ( 1939) ; I n r eI nt er nat i onal Hor i zons, I nc. , 751 F. 2d 1213, 1216 ( 11t hCi r . 1985) . The "l i ber al " rul e r ef l ect s our pr ef er encef or r esol ut i on on t he mer i t s, as agai nst st r i ctadher ence t o f or mal i t i es.

I n r e Ander son- Wal ker I ndus. , I nc. , 798 F. 2d at 1286.

Appl yi ng t hi s hi st or i cal l y l i ber al st andar d, a var i et y of

t ypes of document s and pl eadi ngs submi t t ed by cr edi t or s i n

bankr upt cy cases have been recogni zed as adequate t o const i t ut e an

i nf or mal pr oof of cl ai m i n a bankrupt cy case. See Wr i ght v. Hol m

( I n r e Hol m) , 931 F. 2d at 622- 23 ( a debt or s di scl osur e

st at ement ) ; Pi zza of Haw. , I nc. v. Shakeys, I nc. ( I n r e Pi zza of

Haw. , I nc. , 761 F. 2d 1374, 1381- 82 ( 9t h Ci r . 1985) ( a cr edi t or s

compl ai nt f or r el i ef f r om t he aut omat i c st ay wi t h at t achment s) ;

I n r e Sambo' s Rest aur ant s, I nc. , 754 F. 2d at 815- 16 ( a cr edi t or s

compl ai nt r emoved f r om st at e cour t t o bankrupt cy cour t ) ; Count y of

Napa v. Fr anci scan Vi neyar ds ( I n r e Fr anci scan Vi neyar ds) ,

597 F. 2d 181, 182- 83 ( 9t h Ci r . 1979) ( a si mpl e l et t er sent t o a

bankrupt cy t r ust ee, even t hough i t had not been f i l ed wi t h t he


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bankrupt cy cour t ) ; Sun Basi n Lumber Co. v. Uni t ed St at es, 432 F. 2d

48 ( 9t h Ci r . 1970) ( an obj ect i on t o a t r ust ee' s mot i on t o sel l

pr oper t y) ; I n r e Fi sh, 456 B. R. 413 ( a credi t or s mot i ons f or

r el i ef f r om t he aut omat i c st ay) .

Thi s Panel has summar i zed t he el ement s necessar y f or a

credi t or t o est abl i sh an i nf or mal pr oof of cl ai m i n t he Ni nt h

Ci rcui t :

( 1) pr esent ment of a wr i t i ng;( 2) wi t hi n t he t i me f or t he f i l i ng of cl ai ms;( 3) by or on behal f of t he cr edi t or ;( 4) br i ngi ng t o t he at t ent i on of t he cour t ;( 5) t he nat ur e and amount of a cl ai m asser t ed agai nstt he est at e.

I n r e Fi sh, 456 B. R. at 417 ( quot i ng Di cker v. Dye ( I n r e

Edel man) , 237 B. R. at 150) . As noted i n Edel man,

[ T] her e must have been pr esent ed, wi t hi n t he t i me l i mi t ,by or on behal f of t he credi t or , some wr i t t en i nst r umentwhi ch br i ngs t o t he at t ent i on of t he cour t t he nat ur eand amount of t he cl ai m. Per r y v. Cer t i f i cat e Hol der sof Thr i f t Savi ngs, 320 F. 2d 584, 590 ( 9t h Ci r . 1963) .

I n r e Edel man, 237 B. R. at 153.

Under t hi s case l aw, VREA and Vi r t ual argue that t he POCs

t hey f i l ed i n t he Gi anul i as bankr upt cy case sat i sf y the

r equi r ement s f or an i nf or mal pr oof of cl ai m i n t he Cameo case. We

agr ee.

POCs 38 and 39 were unquest i onabl y wr i t i ngs f i l ed by

cr edi t ors Vi r t ual and VREA i n the bankr upt cy cour t on November 10,

2008, one day bef ore the bar date of November 11, 2008, f or cl ai ms

i n t he j oi nt l y admi ni st er ed cases. The case l aw emphasi zes t hat

i n det er mi ni ng adequacy of an al l eged i nf or mal pr oof , t he cr i t i cal

i nqui r y i s whet her t he subj ect document s f ocus at t ent i on on t he

nat ur e and amount of t he cr edi t or s cl ai m. I n ot her wor ds,


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whet her t o al l ow an i nf or mal pr oof of cl ai m i s not det er mi ned so

much by t he f orm or t ype of document , but i nst ead by an

exami nat i on of i t s cont ent s and t he cr edi t or s conduct .

I n r e Fi sh, 456 B. R. at 417- 18.

For exampl e, i n t he I n r e Hol m case, t he cour t hel d t hat a

di scl osure st at ement and pl an submi t t ed by a cr edi t or evi denced

t he i nt ent of t he credi t or t o hol d t he debt or l i abl e f or a debt .

Si mi l ar l y, i n I n r e Pi zza of Haw. , I nc. , a r equest f or r el i ef f r om

t he aut omat i c st ay st at ed t hat t he cr edi t or i nt ended t o j oi n t he

debt or as a def endant i n a ci vi l sui t , and t he cour t f ound t hat

was evi dence of i nt ent t o hol d t he debt or s est at e l i abl e.I n t he di scussi on above concer ni ng f or mal pr oof s of cl ai m,

t he bankr upt cy cour t cor r ect l y not ed that , because t he VREA and

Vi r t ual POCs l i st ed onl y Gi anul i as and hi s case number , t hey coul d

not const i t ut e f or mal pr oof s of cl ai m i n t he Cameo bankrupt cy

case. But i n anal yzi ng t he adequacy of al l eged i nf or mal pr oof s of

cl ai m, our t ask i s not t o exami ne t he f or m of t he document t hat i s

f i l ed wi t h t he bankr upt cy cour t , but t o i nst ead l ook t o i t s

cont ent t o det er mi ne t he i nt ent of t he cr edi t or . Her e, t he POCs

submi t t ed by VREA and Vi r t ual wer e t i mel y f i l ed wr i t i ngs whi ch

cl ear l y br i ng t o t he at t ent i on of t he Debt or s and t he bankrupt cy

cour t t he natur e and amount of VREA and Vi r t ual s cl ai ms agai nst

not onl y Gi anul i as, but al so agai nst Cameo. I ndeed, t he POCs not

onl y i ncl ude t he r el evant i nf or mat i on on t he f ace of t he POCs, t he

at t achment s est abl i sh that t he cr edi t or s debt s ar e f ounded upon

t he same l oan document s, and most i mpor t ant l y, t he same guar ant y

execut ed by both Gi anul i as and Cameo. Fai r l y r ead, t he POCs

mani f est t he i nt ent of VREA and Vi r t ual t o hol d not onl y


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Gi anul i as, but al so Cameo, l i abl e under t he t er ms of t he

guar ant i es. I n f act , l ooki ng t o t he subst ance of what was f i l ed,

t he onl y i nf ormat i on l acki ng on t he f i l ed POCs i s Cameo s name and

bankrupt cy case number . On t hi s r ecor d, i t i s of no consequence

t hat t he POCs l i st ed onl y Gi anul i as as t he debt or , and onl y t he

Gi anul i as case number, because case l aw on i nf ormal pr oof s of

cl ai m i nst r uct s us t o l ook beyond t he f or m of t he subj ect document

t o det er mi ne t he i nt ent of t he credi t or .

Appl yi ng a de novo st andar d of r evi ew, and consi st ent wi t h

t he Ni nt h Ci r cui t command t hat we l ook t o t he subst ance and not

t he f or m of document s of f er ed as i nf or mal pr oof s of cl ai m, weconcl ude that t he VREA and Vi r t ual POCs f i l ed i n t he Gi anul i as

bankr upt cy case const i t ut e val i d i nf or mal pr oof s of cl ai m i n t he

Cameo bankrupt cy case. As a r esul t , t he bankrupt cy cour t er r ed i n

denyi ng t he cr edi t or s Mot i on f or Det er mi nat i on That Cl ai ms Wer e

Pr oper l y Fi l ed.

CONCLUSION

We REVERSE t he order of t he bankrupt cy cour t .

Concur r ence begi ns on next page.


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KLEI N, Bankrupt cy J udge, CONCURRI NG:

I j oi n t he maj or i t y deci si on and wr i t e separ at el y to poi nt

out t hat j oi nt admi ni st r at i on i s an amor phous and i mpr eci se

pr ocedur e t hat i s i nt ent i onal l y f l exi bl e and t hat r equi r es

def i ni t i on by t he cour t t hat or der s j oi nt admi ni st r at i on.

Conf usi on i s i nevi t abl e unl ess t he cour t t akes ser i ousl y i t s

obl i gat i on t o be speci f i c when or der i ng j oi nt admi ni st r at i on.

Her e, some of t he conf usi on t hat l ed t o t hi s si t uat i on i n

whi ch t he appel l ant s get pai d onl y hal f of what ot her si mi l ar l y

si t uat ed credi t or s ar e pai d i s l i kel y at t r i but abl e t o i mpr eci si onby t he cour t i n i t s or der di r ect i ng j oi nt admi ni st r at i on.

The Bankr upt cy Code does not provi de f or j oi nt

admi ni st r at i on. Rat her , j oi nt admi ni st r at i on i s a creat ur e of

Feder al Rul e of Bankrupt cy Pr ocedur e 1015( b) , whi ch per mi t s t he

cour t t o or der a j oi nt admi ni st r at i on of t he est at es of cer t ai n

r el ated debt ors but says next t o nothi ng about what i s meant by

j oi nt admi ni st r at i on. Fed. R. Bankr . P. 1015( b) .

The Rul e 1015( b) procedur e i s i ntent i onal l y f l exi bl e i n t he

name of r educi ng expense. Thus, t he advi sor y commi t t ee note

expl ai ns:

J oi nt admi ni st r at i on as di st i ngui shed f r om consol i dat i onmay i ncl ude combi ni ng t he est ates by usi ng a si ngl e docketf or t he mat t er s occur r i ng i n t he admi ni st r at i on, i ncl udi ngt he l i st i ng of f i l ed cl ai ms, t he combi ni ng of not i ces t ocredi t or s of t he di f f er ent est at es, and t he j oi nt handl i ng of

ot her pur el y admi ni st r at i ve mat t er s t hat may ai d i nexpedi t i ng t he cases and r ender i ng t he pr ocess l ess cost l y.

Fed. R. Bankr . P. 1015( b) , Advi sor y Commi t t ee Note ( 1983) .

Rul e 1015( b) pr ovi des t hat , [ p] r i or t o ent er i ng an or der t he

cour t shal l gi ve consi der at i on t o pr ot ect i ng credi t or s of


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di f f er ent est at es agai nst pot ent i al conf l i cts of i nt er est . Fed.

R. Bankr. P. 1015( b) ( second sent ence) . Thi s, i n vi ew of t he

f l exi bi l i t y descr i bed i n t he advi sor y commi t t ee not e, oper at es as

a di r ect i on t o t he cour t t o be car ef ul and pr eci se about what i s

bei ng or dered.

I n addi t i on, Rul e 2009 per mi t s, but does not r equi r e, a

si ngl e t r ust ee i n j oi nt l y admi ni st er ed cases unl ess credi t or s or

equi t y secur i t y hol der s woul d be pr ej udi ced by conf l i ct s of

i nt er est of a common t r ust ee. Fed. R. Bankr . P. 2009( d) .

The onl y mandat or y r equi r ement f or a j oi nt admi ni st r at i on i s

t hat t her e be separ at e account s. Rul e 2009( e) i s t he sol especi f i c di r ect i on f or j oi nt l y admi ni st er ed cases:

( e) Separ at e Account s. The t r ust ee or t r ust ees ofest at es bei ng j oi nt l y admi ni st er ed shal l keep separ at eaccount s of t he pr oper t y and di st r i but i on of each est at e.

Fed. R. Bankr . P. 2009( e) .

Ever yt hi ng el se about t he det ai l s of a par t i cul ar j oi nt

admi ni st r at i on i s l ef t t o t he di scret i on of t he cour t .

I f t he cour t had been met i cul ous about cl ar i f yi ng t he det ai l s

of t hi s par t i cul ar j oi nt admi ni st r at i on, t hen t he conf usi on

l eadi ng t o t hi s appeal mi ght have been obvi ated.

Accor di ngl y, our appl i cat i on of t he i nf or mal pr oof of cl ai m

doct r i ne i s an appr opr i at e cor r ect i ve measur e.

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In re: James C. Gianulias Cameo Homes, 9th Cir. BAP (2013)

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