Art and Architecture Books of the 21st Century and 400 S. La Brea, LLC, a California limited liabilit

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
ASH\ 2444010.1
Sulmeyer
Kupetz,
 A Professional Corporation
333 SOUTH HOPE STREET, THIRTY
-FIFTH FLOOR
LOS A
NGELES, CALIFORNIA 90071
-1406
TEL 213.626.2311 • FAX 213.629.4520
Victor A. Sahn (CA Bar No. 97299)
vsahn@sulmeyerlaw.com
Daniel A. Lev (CA Bar No. 129622)
dlev@sulmeyerlaw.com
Asa S. Hami (CA Bar No. 210728)
ahami@sulmeyerlaw.com
SulmeyerKupetz
A Professional Corporation
333 South Hope Street, Thirty-Fifth Floor
Los Angeles, California 90071-1406
Telephone: 213.626.2311
Facsimile: 213.629.4520
Attorneys for Official Committee of Unsecured Creditors
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
LOS ANGELES DIVISION
In re
ART AND ARCHITECTURE BOOKS OF
THE 21st CENTURY, a California
corporation,
Debtor.
Case No. 2:13-bk-14135-RK
Chapter 11
ORDER APPROVING “STIPULATION
TO CONFER STANDING AND
AUTHORITY ON OFFICIAL
COMMITTEE OF UNSECURED
CREDITORS TO PURSUE AND
PROSECUTE ACTION AND CLAIMS
FOR RELIEF AGAINST BEN JEWELRY,
INC., DBA SOUTH BEVERLY-
WILSHIRE JEWELRY & LOAN, AND
DBA THE DINA COLLECTION, ON
BEHALF AND FOR THE BENEFIT OF
THE BANKRUPTCY ESTATE”
[Stipulation at Docket No. 902]
//
//
//
FILED & ENTERED
MAR 09 2015
CLERK U.S. BANKRUPTCY COURT
Central District of California
BY DEPUTY CLERK	bakchell
CHANGES MADE BY COURT
Case 2:13-bk-14135-RK Doc 949 Filed 03/09/15 Entered 03/09/15 16:53:16 Desc
Main Document Page 1 of 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
ASH\ 2444010.1 2
Sulmeyer
Kupetz,
 A Professional Corporation
333 SOUTH HOPE STREET, THIRTY
-FIFTH FLOOR
LOS ANGELES, CALIFORNIA 90071
-1406
TEL 213.626.2311 • FAX 213.629.4520
Pending before the court are the “Stipulation to Confer Standing and Authority on
Official Committee of Unsecured Creditors to Pursue and Prosecute Action and Claims for
Relief Against Ben Jewelry, Inc., dba South Beverly-Wilshire Jewelry & Loan, and dba
The Dina Collection, on Behalf and for the Benefit of the Bankruptcy Estate” (the
“Stipulation”), entered by and between the Official Committee of Unsecured Creditors in
the above-captioned case, on the one hand, and Art and Architecture Books of the 21st
Century, the above-captioned debtor and debtor in possession, on the other hand, and the
objection thereto by Ben Jewelry, Inc. The court set the Stipulation for hearing by on
March 10, 2015, in light of the objection. However, having now considered the
stipulation, objection, and reply, the court determines that oral argument is not necessary,
dispenses with oral argument, vacates the hearing set for March 10, 2015, and rules on the
Stipulation and approves it.
The court determines that the Stipulation to allow the Committee to prosecute
claims on behalf of the bankruptcy estate strictly for the benefit of the estate is appropriate
under the circumstances. As described in the Stipulation, Debtor’s current bankruptcy
counsel formerly represented Ben Jewelry in an unrelated matter, and good cause is shown
to allow the Committee to bring these claims for the estate. The cases cited by the parties,
Seaplace Shipping Ltd. v. Parekh (In re Parmetex, Inc.), 199 F.3d 1029, 1030-1031 (9th
Cir. 1999) and In re Spaulding Composites Co., 207 B.R. 899, 903-904 (9th Cir. BAP
1997) recognize the bankruptcy court’s authority to authorize suit by creditors or the
creditors’ committee to litigate claims on behalf of the bankruptcy trustee or debtor-in-
possession in Chapter 11. The Bankruptcy Appellate Panel of the Ninth Circuit in
Spaulding Composites Co. further recognized that this creditor authorization to proceed on
behalf of the estate may be allowed through stipulated representation and that such
authorization may be retroactive, though the better practice is advance approval. 207 B.R.
at 904-905. The cases cited by the objecting party, Ben Jewelry, Inc., do not support its
objection to the stipulation. In re Summers, 332 F.3d 1240 (9th Cir. 2003)(case inapposite
to this case as that case involved determination that bankruptcy trustee in wife’s Chapter 7
Case 2:13-bk-14135-RK Doc 949 Filed 03/09/15 Entered 03/09/15 16:53:16 Desc
Main Document Page 2 of 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
ASH\ 2444010.1 3
Sulmeyer
Kupetz,
 A Professional Corporation
333 SOUTH HOPE STREET, THIRTY
-FIFTH FLOOR
LOS ANGELES, CALIFORNIA 90071
-1406
TEL 213.626.2311 • FAX 213.629.4520
bankruptcy case could not claim that the property of the estate included nondebtor
husband’s interest in joint tenancy property); People ex rel. Younger v. Andrus, 608 F.2d
1247 (9th Cir 1979)(case inapposite to this case because that case involved a failure of the
allegedly aggrieved party to claim environmental injury for purposes of the National
Environmental Policy Act and did not involve derivative standing as in this case); In re
Folks, 211 B.R. 378 (9th Cir. BAP 1997)(case factually distinguishable from this case
because the claim in that case belonging to the bankruptcy estate of a corporate Chapter 7
debtor was abandoned to creditor which had standing to sue, but statute of limitations on
claim barred suit); In re Curry and Sorensen, Inc., 57 B.R. 824 (9th Cir. BAP 1986)(case
factually distinguishable because the creditors lacked standing to sue because they had not
sought or obtained court authorization or the estate’s consent to assert fraudulent transfer
claims on behalf of the Chapter 11 bankruptcy estate; the case does not support Ben
Jewelry, Inc.’s argument that its consent to suit is required here).
Ben Jewelry, Inc., argues that counsel for Debtor should sign the Stipulation rather
than the Debtor’s principal pursuant to Rule 11(a) of the Federal Rules of Civil Procedure;
see also, Rule 9011(a) of the Federal Rules of Bankruptcy Procedure; Local Bankruptcy
Rule 9011-2. While normally an entity must appear through counsel, the court determines
that the circumstances here justify a departure from the general rule requiring counsel’s
signature because current counsel for debtor-in-possession may have ethical concerns due
to prior representation of Ben Jewelry, Inc., in an unrelated matter. Therefore, the court
determines that debtor’s principal, the 100-percent shareholder and president, may be
allowed to sign a pleading for the limited purpose of allowing another party to represent
the interests of the bankruptcy estate in litigation. Local Bankruptcy Rule 1001-1(d)
(recognizing the court’s discretion to waive the application of local bankruptcy rules or
make additional orders as it deems appropriate in the interests of justice); see also, Rule
1001 of the Federal Rules of Bankruptcy Procedure (“These rules shall be construed to
secure the just, speedy and inexpensive determination of every case and proceeding.”);
Rule 1 of the Federal Rules of Civil Procedure (substantially similar language). The court
Case 2:13-bk-14135-RK Doc 949 Filed 03/09/15 Entered 03/09/15 16:53:16 Desc
Main Document Page 3 of 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
ASH\ 2444010.1 4
Sulmeyer
Kupetz,
 A Professional Corporation
333 SOUTH HOPE STREET, THIRTY
-FIFTH FLOOR
LOS ANGELES, CALIFORNIA 90071
-1406
TEL 213.626.2311 • FAX 213.629.4520
deems it appropriate to allow the debtor’s principal to sign the stipulation in order to avoid
the unnecessary expense of retaining independent counsel for this limited purpose and to
protect the interests of the estate through the conduct of litigation. This authorization in no
way detracts from the ability of Ben Jewelry, Inc. to defend its interests in the litigation or
diminishes the obligations of the Committee to the estate in representing its interests in the
litigation.
Therefore, the court determines that good cause is shown here, and the Stipulation
is approved, effective as of February 18, 2015.
IT IS SO ORDERED.
###
Date: March 9, 2015
Case 2:13-bk-14135-RK Doc 949 Filed 03/09/15 Entered 03/09/15 16:53:16 Desc
Main Document Page 4 of 4