The Litigation Trust for the Trust Beneficiaries o v. JP MORGAN CHASE et al

-1-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
SAN FERNANDO VALLEY DIVISION
In re:
SUPERIOR NATIONAL INSURANCE
Debtor(s).
Case No.: 1:00-bk-14099-GM
Adv No: 1:13-ap-01099-GM
Chapter 11
MEMORANDUM OF OPINION GRANTING IN
PART AND DENYING IN PART
DEFENDANTS JPMORGAN CHASE BANK
N.A. AND JPMORGAN CHASE & CO.’S
MOTION TO DISMISS THE COMPLAINT
(Docket #20)
The Litigation Trust for the Trust
Beneficiaries of SNTL Corporation and
Certain Affiliates
Plaintiff(s),
v.
JP MORGAN CHASE, JP MORGAN
CHASE BANK N.A.,
Defendant(s).
Date: December 6, 2013
Time: 10:30 a.m.
Courtroom: 303
On August 27, 2013, Defendants JPMorgan Chase Bank, N.A. and JPMorgan
Chase & Co. (collectively “Chase”) brought a motion to dismiss the complaint
commencing this adversary proceeding (the “Motion”).
FILED & ENTERED
DEC 19 2013
CLERK U.S. BANKRUPTCY COURT
Central District of California
BY DEPUTY CLERK	Williams
Case 1:13-ap-01099-GM Doc 55 Filed 12/19/13 Entered 12/19/13 12:21:59 Desc
Main Document Page 1 of 5

-2-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
Plaintiff, the Litigation Trust for the Trust Beneficiaries of SNTL Corporation and
Certain Affiliates (the “Trust”), filed an opposition to the Motion (the “Opposition”).
Chase filed a reply to the Opposition (the “Reply”).
This matter was heard on December 6, 2013 at 10:00 a.m. in Courtroom 303 (the
“Hearing”).
Having considered the Motion, the Opposition, the Reply, the pleadings filed by
the parties in support of the Motion, Opposition and Reply and the oral arguments and
demonstrative exhibits submitted by counsel at the Hearing, I find my original tentative
ruling to be correct, with one exception as set forth below. (All defined terms used
below are as defined in that tentative ruling.) The tentative ruling is set forth as an
exhibit hereto.
I had tentatively ruled that the Trust had leave to amend Count Five only with
respect to the Later Recognized NOLs. However, after listening to the arguments of
counsel at the hearing, I will allow the Trust to replead restitution with respect to the
time value of the portion of Pre-Effective Date NOL utilization that is ultimately turned
around. Plaintiff argued that not all interest on the Pre-Effective NOLS was covered by
the Plan: the portion of the tax liability savings that is ultimately offset by the
Turnaround Amount is not covered by Plan § 4.1(c) and thus does not bear interest
between its utilization and ultimate offset. (For instance, if Chase realizes $100 in tax
savings from the NOLs in 2003 and $10 of that will result in tax liability (that will be
included in the Turnaround Amount) in 2013, the Distributable NOL Utilization Value is
$90 and, under Plan § 4.1(c), Chase will pay interest on that $90. Section 4.1(c) does
not cover interest on the remaining $10 for the period between utilization and
turnaround.) A reading of Plan § 4.1(c) confirms that interest on NOL utilization that is
ultimately turned around is not covered by the Plan.
For the reasons set forth above and in my tentative ruling filed in conjunction with
this memorandum of opinion,
The Motion is GRANTED as to Count One without leave to amend.
Case 1:13-ap-01099-GM Doc 55 Filed 12/19/13 Entered 12/19/13 12:21:59 Desc
Main Document Page 2 of 5

-3-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
The Motion is GRANTED as to Count Five with leave to amend to a Claim for
Restitution with respect only to (i) the Later Recognized NOLs and (ii) the time value of
the portion of Pre-Effective Date NOL utilization that is ultimately turned around.
The Motion is DENIED as to Counts Two, Three, Four and Six.
###
Date: December 19, 2013
Case 1:13-ap-01099-GM Doc 55 Filed 12/19/13 Entered 12/19/13 12:21:59 Desc
Main Document Page 3 of 5

-4-
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
EXHIBIT 1
Case 1:13-ap-01099-GM Doc 55 Filed 12/19/13 Entered 12/19/13 12:21:59 Desc
Main Document Page 4 of 5

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.
June 2012 F 9021-1.1.NOTICE.ENTERED.ORDER
NOTICE OF ENTERED ORDER AND SERVICE LIST
Notice is given by the court that a judgment or order entitled (specify): MEMORANDUM OF OPINION
GRANTING IN PART AND DENYING IN PART DEFENDANTS JPMORGAN CHASE BANK N.A. AND
JPMORGAN CHASE & CO.’S MOTION TO DISMISS THE COMPLAINT (Docket #20) was entered on the
date indicated as AEntered@ on the first page of this judgment or order and will be served in the manner
stated below:
1. SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF) B Pursuant to controlling
General Orders and LBRs, the foregoing document was served on the following persons by the court via
NEF and hyperlink to the judgment or order. As of December 13, 2013, the following persons are
currently on the Electronic Mail Notice List for this bankruptcy case or adversary proceeding to receive
NEF transmission at the email addresses stated below.
Craig H Averch caverch@whitecase.com
United States Trustee (SV) ustpregion16.wh.ecf@usdoj.gov
Eric D Winston ericwinston@quinnemanuel.com
Service information continued on attached
page
2. SERVED BY THE COURT VIA UNITED STATES MAIL: A copy of this notice and a true copy of this
judgment or order was sent by United States mail, first class, postage prepaid, to the following persons
and/or entities at the addresses indicated below:
Service information continued on attached
page
3. TO BE SERVED BY THE LODGING PARTY: Within 72 hours after receipt of a copy of this judgment
or order which bears an AEntered@ stamp, the party lodging the judgment or order will serve a complete
copy bearing an AEntered@ stamp by United States mail, overnight mail, facsimile transmission or email
and file a proof of service of the entered order on the following persons and/or entities at the addresses,
facsimile transmission numbers, and/or email addresses stated below:
Service information continued on attached
page
Case 1:13-ap-01099-GM Doc 55 Filed 12/19/13 Entered 12/19/13 12:21:59 Desc
Main Document Page 5 of 5