Judy Inok Kim

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
JUDY INOK KIM, 	No. 09-13736
Debtor(s).
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Memorandum After Confirmation Hearing
_________________
Along with her sister and brother-in-law, Kim owns a 16,800 square foot commercial building
at 299 Campus Court, Fairfield, California. The senior deed of trust holder on the Fairfield property,
BMR Funding, LLC, also holds a junior deed of trust on the Kim’s residence at 4000 Jameson Canyon
Rd.,American Canyon, California, securing the same debt. The obligation is now all due and payable,
and Kim is unable to refinance. The Chapter 11 plan of debtor Judy Kim is now before the court. It
provides for monthly payments to BMR over the next 30 years. BMR objects.
Kim’s plan calls for writing down BMR’s lien to the value of the Fairfield property and
amortizing the debt over 30 years at a market rate of interest. BMR has raised numerous technical and
procedural objections which appear either to have no merit at all or to be easily resolved. However,
the linchpin of the plan is rental income to be generated by the Fairfield property. 	In the six years
Kim has owned the property, she has never been able to generate anything like the income necessary to
make the payments called for by her plan. The property was vacant when Kim filed her Chapter 11
petition. The best she can offer at this time is a month-to-month tenant for only a portion of the
Entered on Docket
July 19, 2010
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 09-13736 Doc# 105 Filed: 07/19/10 Entered: 07/19/10 12:49:02 Page 1 of
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premises who may be operating its business illegally and has received a letter from the City of
Fairfield stating that its business license is revoked. She has not met her burden of showing that her
plan is feasible and will not result in liquidation as required by § 1129(a)(11) of the Bankruptcy
Code.
In addition, Kim has not demonstrated that the plan is fair and equitable as to BMR, as required
by § 1129(b)(1) of the Code. 	BMR’s note is now all due and payable, yet under the plan it would not
be paid in full for the next 30 years. The plan shifts the risk of further loss if the current economic
crisis deepens - a distinct possibility for commercial real estate - from Kim to BMR. 	A plan of
reorganization may not unfairly shift the risk of failure to the secured creditor. In re Monarch Beach
Venture, Ltd., 166 B.R. 428, 436 (C.D.Cal.1993); In re Consul Rest. Corp., 146 B.R. 979
(Bankr.D.Minn.1992); In re Miami Center Assocs. Ltd., 144 B.R. 937 (Bankr.S.D.Fla.1992). 	The
court cannot conceive of an interest rate which would properly compensate BMR for bearing this risk,
let alone a rate Kim can afford to pay.
For the foregoing reasons, the court will deny confirmation of Kim’s plan. Counsel for BMR
shall submit an appropriate form of order.
Dated: July 19, 2010
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 09-13736 Doc# 105 Filed: 07/19/10 Entered: 07/19/10 12:49:02 Page 2 of
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