Any Mountain, LTD

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UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
In re
ANY MOUNTAIN, INC., No. 04-12989
Debtor(s).
______________________________________/
Memorandum on Motion for Reconsideration
_________________
The estate of Chapter 11 debtor in possession Any Mountain, Inc., includes a valuable leasehold
interest in the commercial real property at 2350 Junipero Serra Boulevard, Daly City, California. The
landlord is Vasilios Glimidakis.
Any Mountain filed its Chapter 11 petition on December 23, 2004. In it schedule of executory
contracts and unexpired leases, it listed several commercial leases and identifies Glimidakis as the
landlord at “Daly City property, lease expires July 2005, 3 5 year options.” Any Mountain had only one
lease in Daly City.
Bankruptcy Code § 365(d)(4), as it provided at the time, required a Chapter 11 debtor in
possession to assume or reject a commercial lease within 60 days of filing unless the court fixed a
different date within those sixty days; if the debtor failed to obtain an extension, the section provided that
the lease is deemed rejected and the debtor is required to immediately surrender possession to the
landlord.
On February 19, 2005, Any Mountain filed a motion for additional time to assume or reject all of
Entered on Docket
January 11, 2006
GLORIA L. FRANKLIN, CLERK
U.S BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
Case: 04-12989 Doc# 325 Filed: 01/11/06 Entered: 01/11/06 11:41:39 Page 1 of
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its commercial leases. The motion included the Daly City lease, although it again did not specifically
identify the property. However, it identified as the landlord “Financial Investment Mgt,” which was the
notice party designated by the landlord in the lease. Along with the motion, Any Mountain filed a notice
of hearing and a certificate of service showing that both Financial Investment Mgt and Glimidakis were
served. In addition, both were specifically identified in the certificate of service as “landlords.” At the
hearing on March 19, 2005, the court granted the motion and extended the time to assume or reject to
April 22, 2005.
Any Mountain made further motions with the same notice on April 9, 2005 and May 20, 2005.
The court granted both motions.
On July 6, 2005, Any Mountain made a motion to assume and assign several leases, including the
Daly City lease. Glimidakis was again identified as a landlord, although this time one number in his
street address was changed in error.
The original buyer of the lease rights decided that it did not want the Daly City lease. A
representative of Any Mountain then contacted both Glimidakis’ real estate broker and a sublessee to
see if they were interested in the obtaining the lease rights. The sub-lessee expressed an interest and a
sale was noticed, at which time another party appeared and outbid the sub-lessee. The sale resulted in a
net benefit to the estate of $380,000.00.
Because the successful bidder was not the party who was noticed, the court required Any
Mountain to give Glimidakis an opportunity to object if he felt the buyer was not creditworthy.
Glimidakis then appeared for the first time, arguing that he should be given an opportunity to bid and that
he had some legitimate objection to the buyer. The court ruled that Glimidakis had no standing to seek to
reopen the bidding and that the buyer was sound enough to give Glimidakis adequate assurance of future
performance. It then granted Any Mountain’s motion to assume the lease and assign it to the high bidder.
Glimidakis filed a notice of appeal. He then filed a motion for a stay pending appeal and a
motion for reconsideration arguing, for the first time, that the lease expired by operation of § 365(d)(4)
due to inadequate notice and had been forfeited. The court now addresses only the notice issue, having
Case: 04-12989 Doc# 325 Filed: 01/11/06 Entered: 01/11/06 11:41:39 Page 2 of
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separately dealt with the stay pending appeal.
The result Glimidakis now seeks is very harsh, and abhorrent to any court of equity. He would
have the estate forfeit $380,000.00 to his windfall, even though he admits that the lease was never in
default. Nonetheless, the court would be compelled to this result if Glimidakis had been denied due
process to which he was entitled. However, a review of the facts and the law establishes that
Glimidakis was fairly noticed and that his due process rights have not been violated.
Once a party has knowledge of a bankruptcy, he has some responsibility to act diligently to
determine how it affects him. In re Coastal Alaska Lines, Inc., 920 F.2d 1428, 1430-31 (9th Cir. 1990).
While the motions regarding the lease in question were somewhat vague, Glimidakis was specifically
given notice as a landlord and was identified as such. He could have easily reviewed the list of
executory contracts and unexpired leases and determined that Any Mountain had only one commercial
lease in Daly City so the motion must affect his rights in that property. The slight investigation needed to
determine all of the relevant facts means that Glimidakis was afforded due process.
More importantly, however, is the fact that due process rights are not involved where a debtor is
seeking merely to extend the time to assume or reject a commercial lease, because the debtor is seeking
only to maintain the status quo. In re Victoria Station Inc., 875 F.2d 1380, 1385-86 (9th Cir. 1989).
Although Glimidakis was in fact given fair notice, an inadvertent failure to do so would still not result in
the forfeiture Glimidakis seeks.
For the foregoing reasons, Glimidakis’ motion for reconsideration will be denied. Counsel for
Any Mountain shall submit an appropriate form of order.
Dated: January 11, 2006
SAlan Jaroslovsky
U.S. Bankruptcy Judge
Case: 04-12989 Doc# 325 Filed: 01/11/06 Entered: 01/11/06 11:41:39 Page 3 of
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