LA Slauson Swapmeet Inc

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UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
LOS ANGELES DIVISION
In re:
LA SLAUSON SWAPMEET INC.,
Debtor(s).
Case No.: 2:12-bk-10801-NB
CHAPTER 11
ORDER:
(1) TO SHOW CAUSE WHY THIS CASE
SHOULD NOT BE DISMISSED OR
CONVERTED TO CHAPTER 7, OR
WHY THE COURT SHOULD NOT
APPOINT A CHAPTER 11 TRUSTEE;
(2) TO SHOW CAUSE WHY THE
DEBTOR SHOULD NOT BE
SANCTIONED FOR NON-
COMPLIANCE WITH THIS COURT’S
ORDERS; AND
(3) RESCHEDULING HEARINGS
Date: April 5, 2012
Time: 3:00 p.m.
Courtroom: 1545
On March 6, 2012 at or around 2:00 p.m., the Court held a continued status
conference in this case and a hearing on, among other things, the application for
employment (the “Employment Application”) filed by the proposed counsel for the
above-referenced debtor (“Debtor”). Appearances were as noted on the record. For
the reasons stated on the record, the Employment Application will be denied by
FILED & ENTERED
MAR 07 2012
CLERK U.S. BANKRUPTCY COURT
Central District of California
BY DEPUTY CLERK	sumlin
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separate order and the Court further rules as follows:
IT IS ORDERED that the Court will hold a hearing AT THE ABOVE-
REFERENCED TIME AND PLACE, at which time Debtor must show cause:
(1) why the Court should not dismiss or convert this case under 11 U.S.C.
§ 1112(b), or appoint a chapter 11 trustee in this case under 11 U.S.C.
§ 1104(a), or grant alternative or additional relief to address the concerns
identified at the above-referenced hearing on March 6, 2012; and
(2) why the Court should not sanction Debtor for failure to comply with the
Court’s previously issued order (Dkt. 65-1) which provides, among other
things, that pursuant to 11 U.S.C. § 361:
(a) Debtor is prohibited from undertaking any use of property of the estate
except on specified conditions,
(b) Debtor shall preserve and protect any property that it is not authorized to
use, and hold such property for turnover to Kayla Properties, LLC, Ethan
26, LLC, Leader Group Enterprises, LLC, Pacific Star Properties, LLC, Wall
Street Enterprises, LLC, and SSR, LLC (collectively, “Landlords”) or for
such other disposition as the Court may order in the future, and
(c) Debtor shall provide weekly accountings to Landlords, including bank
records (the “Adequate Protection Order”).
IT IS FURTHER ORDERED that Rochell Herzog (Bar No. 269660) is required to
convey copies of this Order and the Adequate Protection Order to Debtor no later than
March 7, 2012 at 5:00 p.m. and such copies shall be visibly marked in such a way as to
prominently highlight the provisions of paragraphs “(1)” and “(2)” above and the
provisions of the Adequate Protection Order summarized in paragraph “(2)” above as
well as the provisions below for non-interference with Landlords’ collection of all
payments (“Rents”) relating to the use or occupancy of the premises at issue.
IT IS FURTHER ORDERED that in view of the possibility that any party in
interest may wish to be heard on the above matters, and in view of the Court’s denial of
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Debtor’s application to employ counsel and the consequent need for some person other
than Debtor’s proposed counsel to provide notice, a copy of this Order shall be served
by Landlords via U.S. mail on all persons listed on the Mailing Matrix in this case (which
can be downloaded from the Court’s CM/ECF system) on or before March 7, 2012;
IT IS FURTHER ORDERED that the deadline for the U.S. Trustee, Landlords,
and any other party in interest to file and serve on Debtor and Debtor’s counsel of
record any papers that they may wish to file in response to this Order is March 13,
2012.
IT IS FURTHER ORDERED that the deadline for Debtor to file and serve any
responses it may have to this Order and to any papers filed by the U.S. Trustee,
Landlords, or any other party in interest is March 29, 2012.
IT IS FURTHER ORDERED that the hearing on Debtor’s motion for
reconsideration (Dkt. 55) of this Court’s order granting Landlords’ motion for relief from
the automatic stay, and any amendments thereto, is continued to the above-referenced
time and place.
IT IS FURTHER ORDERED as follows, in order to provide additional protection
of Landlords’ interests pursuant to 11 U.S.C. § 361, and in addition to the provisions of
the Adequate Protection Order:
(a) Trust Account: Landlords shall establish a trust account, held by counsel for
Landlords (the “Trust Account”), to collect and hold Rents;
(b) Landlords’ Communications With Subtenants: Landlords may provide a copy
and/or summary of this Order to any or all subtenants of the premises at issue
(including any and all premises that Landlords assert are included within any
rental agreements between them and Debtor, whether or not Debtor disputes
such inclusion) (collectively, the “Premises”), and may otherwise communicate
with such subtenants consistent with the provisions of this Order and with
maintaining the status quo pending resolution of the disputes between
Landlords and Debtor;
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(c) Payments by Subtenants: Landlords may direct any or all subtenants of the
Premises to make all future payments of Rents directly to the Trust Account, in
accordance with any applicable nonbankruptcy law.
(d) Termination of Directions to Subtenants: the direction to subtenants in the
immediately preceding paragraph shall continue until such direction is
terminated by either (i) notice by Landlords terminating such direction or (ii) an
order of this Court or another Court of competent jurisdiction and authority;
(e) No Prejudice to Subtenants: Landlords’ direction to such subtenants shall be
structured so as not to impose any burden on such subtenants – for example,
if Landlords wish funds to be wired or debited via an ACH transaction, then
any costs beyond what such subtenants customarily pay shall be absorbed by
Landlords;
(f) Non-Interference by Debtor: Debtor shall not interfere with Landlords’
communications with subtenants or collection of Rents as authorized in this
Order;
(g) Funds Held by Estate: Debtor shall not be required to turn over to the Trust
Account any funds presently held as property of the bankruptcy estate, but
Debtor shall continue to protect, preserve, and hold such funds pursuant to the
provisions of the Adequate Protection Order;
(h) Security Deposits: Debtor shall remain responsible for return of any security
deposits claimed by any subtenants of the Premises, provided that no
distribution shall be made to any subtenant who is an affiliate or insider of
Debtor (as those terms are defined in 11 U.S.C. § 101(2) & (31)) unless
authorized by further order of this Court, and provided further than any return
of security deposits to subtenants shall comply with all applicable provisions of
the Bankruptcy Code and applicable rules;
(i) Authorized Expenditures: Landlords are hereby authorized to release funds
from the Trust Account to pay any expenses that Landlords and Debtor agree
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are necessary to maintain the Premises or otherwise maintain the status quo,
and in the event that they are unable to agree, they are directed to follow the
dispute resolution procedures set forth below;
(j) Preservation of Remaining Funds: Landlords shall not make any other
distributions from the Trust Account unless and until directed to do so by an
order of this Court, or of a nonbankruptcy Court of competent jurisdiction and
authority (in the event that Debtor is no longer a debtor under the Bankruptcy
Code, 11 U.S.C. § 101 et seq., or that the automatic stay has been modified
so as not to preclude any such order by a nonbankruptcy Court);
(k) Accounting: Landlords shall provide such accountings as Debtor reasonably
may request, not more often than once per week, which may include but shall
not be limited to printouts of online bank records relating to the Trust Account
(or the equivalent, if such printouts are not available or would reveal
confidential information regarding other funds held in trust by counsel for
Landlords);
(l) Dispute Resolution, or Modification: any parties in interest who are unable to
consensually resolve disputes regarding this Order, or who wish to modify the
terms of this Order, are directed to meet and confer regarding a date and time
for a telephonic hearing and then telephone chambers (at 213-894-6098) to
arrange such hearing.
###
United States Bankruptcy Judge
DATED: March 7, 2012
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This form is mandatory. It has been approved for use by the Un ited States Bankruptcy Court for the Central District of California.
August 2010 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) ORDER: TO SHOW CAUSE WHY
THIS CASE SHOULD NOT BE DISMISSED OR CONVERTED TO CHAPTER 7, OR WHY THE COURT
SHOULD NOT APPOINT A CHAPTER 11 TRUSTEE; TO SHOW CAUSE WHY THE DEBTOR
SHOULD NOT BE SANCTIONED FOR NON-COMPLIANCE WITH THIS COURT’S ORDERS; AND
RESCHEDULING HEARINGS was entered on the date indicated as “Entered” on the first page of this
judgment or order and will be served in the manner indicated below:
I. SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (ANEF@) B Pursuant to controlling
General Order(s) and Local Bankruptcy Rule(s), the foregoing document was served on the following
person(s) by the court via NEF and hyperlink to the judgment or order. As of 3/7/12, the following
person(s) are currently on the Electronic Mail Notice List for this bankruptcy case or adversary proceeding
to receive NEF transmission at the email address(es) indicated below.
• Gene W Choe maria@choicelaw.org
• Russell Clementson russell.clementson@usdoj.gov
• Joseph A Eisenberg jae@jmbm.com
• Alexis M McGinness amm@jmbm.com, vr@jmbm.com;fc3@jmbm.com
• United States Trustee (LA) ustpregion16.la.ecf@usdoj.gov
Service information continued on attached page
II. SERVED BY THE COURT VIA U.S. 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 person(s) and/or
entity(ies) at the address(es) indicated below:
Debtor’s Proposed Counsel:
Rochell Herzog
3250 Wilshire Blvd Ste 1200
Los Angeles, CA 90010
Debtor:
LA Slauson Swapmeet Inc
1600 W Slauson Avenue
Los Angeles, CA 90047
Service information continued on attached page
III. 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 U.S. Mail, overnight mail, facsimile transmission or email and file a
proof of service of the entered order on the following person(s) and/or entity(ies) at the address(es),
facsimile transmission number(s), and/or email address(es) indicated below:
Service information continued on attached page
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