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).
______________________________________/
Memorandum on Valuation of Fairfield Property
_________________
Prior to her Chapter 11 filing, debtor Judy Kim owned 16,800 square foot commercial building
at 299 Campus Court, Fairfield, California. The senior deed of trust holder on this property, BMR
Funding, LLC, also held a junior deed of trust on Kim’s residence at 4000 Jameson Canyon Rd.,
American Canyon, California, securing the same debt. The obligation came due in 2009, and Kim was
unable to refinance. This caused her bankruptcy filing.
Kim’s plan of reorganization, which the court confirmed last September, calls for valuation of
the two properties. BMR is to receive amortized payments on two notes, one secured by each property.
The valuation of the commercial building in Fairfield is now before the court.
The Fairfield property has long been problematical for Kim. It has never been close to fully
leased, and at times has had essentially no tenants at all. The only way Kim was able to show
feasibility for her plan was to show that her niece, a medical doctor, would move her practice to the
property. Although the postpetition payments to BMR have been made, nothing has happened to make
the property usable as a medical office. The court is concerned that Kim is hoping for an unfairly high
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Entered on Docket
January 20, 2011
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 09-13736 Doc# 203 Filed: 01/20/11 Entered: 01/20/11 13:49:16 Page 1 of
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value to the property so that she could walk away from it, relieving her niece of the obligation to move
her practice and leaving Kim’s home in American Canyon free of BMR’s lien or at least subject to a
small lien. Such a result would not be fair to BMR.
Kim has introduced expert testimony that the Fairfield property is worth $1.86 million.
However, that opinion is based in part on the assumption, based on Kim’s representations, that the
niece’s lease is an arm’s length transaction. That is not at all the case. Kim was unable to find any
tenant for most of the property, and her first plan was not confirmed for that reason. The niece has
come forward in an attempt by family members to rescue Kim. The court found the appraiser’s
testimony that this fact would have no effect on his valuation less than convincing.
BMR asserts that the property is worth $1.4 million and would bring about $1.2 million in a
forced or foreclosure sale. However, it produced evidence of an unaccepted offer to purchase the
property by a third party for $1.5 million. Given this testimony, which amounts to an admission
against interest, the court cannot see its way clear to find a lesser value. Accordingly, the court values
the Fairfield property at $1.5 million.
Counsel for Kims shall submit an appropriate order which counsel for BMR has approved as to
form.
Dated: January 20, 2011
SAlan Jaroslovsky
U.S. Bankruptcy Judge
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Case: 09-13736 Doc# 203 Filed: 01/20/11 Entered: 01/20/11 13:49:16 Page 2 of
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