In re: JIM SLEMONS HAWAII, INC. v. UST - UNITED STATES TRUSTEE, HONOLULU and CONTINENTAL INVESTMENT COMPANY, LTD.

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
In re: JIM SLEMONS HAWAII, INC.,
Debtor,
JIM SLEMONS HAWAII, INC.,
Appellant,
v.
UST - UNITED STATES TRUSTEE,
HONOLULU and CONTINENTAL
INVESTMENT COMPANY, LTD.,
Appellees.
No. 11-60071
BAP No. 10-1284
MEMORANDUM*
Appeal from the Ninth Circuit
Bankruptcy Appellate Panel
Pappas, Dunn, and Jury, Bankruptcy Judges, Presiding
Submitted October 10, 2013**
Honolulu, Hawaii
Before: KOZINSKI, Chief Judge, and FISHER and WATFORD, Circuit Judges.
FILED
OCT 21 2013
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
* This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
** The panel unanimously concludes this case is suitable for decision
without oral argument. See Fed. R. App. P. 34(a)(2).

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1. The bankruptcy court properly granted Continental’s motion to terminate
the lease. To avoid termination, debtor had to assume the lease, which it could do
only by filing a formal motion requesting court approval, stating particular
grounds, and providing Continental with adequate notice and opportunity for a
hearing. See Sea Harvest Corp. v. Riviera Land Co., 868 F.2d 1077, 1079 (9th Cir.
1989); Fed. R. Bankr. P. 9014. Debtor did not file such a motion. It did file a
motion to pay only a certain portion of rent due, but as a matter of law that motion
did not suffice to effectuate an assumption of the lease. See Sea Harvest, 868 F.2d
at 1079. The bankruptcy court did not abuse its discretion by denying debtor’s set-
aside motion. Debtor filed the motion thirty-three days after entry of judgment,
well after the fourteen-day deadline set by Federal Rule of Bankruptcy Procedure
9023.
2. The bankruptcy court properly granted Continental’s administrative rent
motion. Even though debtor failed to assume the lease, it was required to pay rent
until the lease was formally terminated. See 11 U.S.C. § 365(d)(3); In re At Home
Corp., 392 F.3d 1064, 1068 (9th Cir. 2004). The bankruptcy court also properly
denied debtor’s offset and sublessee rent motions. Debtor failed to rebut evidence
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showing that its account had been fully credited and that Continental permissibly
collected subrents pursuant to a prior agreement between debtor and Continental.
3. The bankruptcy court did not abuse its discretion by dismissing debtor’s
Chapter 11 case for cause under 11 U.S.C. § 1112(b). Debtor’s failure to assume
its lease with Continental resulted in a “diminution of the estate,” and without that
asset there was an “absence of a reasonable likelihood of rehabilitation.”
§ 1112(b)(4)(A).
4. The bankruptcy court retained ancillary jurisdiction after dismissing the
bankruptcy case, which authorized the court to decide the attorney’s fees motion
and to enforce its earlier order granting administrative rent. See In re Taylor, 884
F.2d 478, 481 (9th Cir. 1989); In re Univ. Farming Indus., 873 F.2d 1334, 1335
(9th Cir. 1989).
5. We lack jurisdiction to review the bankruptcy court’s order denying the
attorney’s fees motion because debtor’s notice of appeal was untimely. The June
29, 2010, order denying fees was a final order. See In re Yermakov, 718 F.2d
1465, 1468–69 (9th Cir. 1983). Debtor filed its notice of appeal well after the
fourteen-day jurisdictional deadline imposed by Rule 8002 had passed. See Fed.
R. Bankr. P. 8002; In re Wiersma, 483 F.3d 933, 938 (9th Cir. 2007). Even if
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debtor’s appeal was timely—which it was not—the bankruptcy court did not abuse
its discretion by denying debtor’s motion for attorney’s fees.
6. The bankruptcy court did not abuse its discretion by rejecting debtor’s
challenge to Judge Faris’s impartiality. A “reasonable person with knowledge of
all the facts” would not conclude Judge Faris’s impartiality “might reasonably be
questioned” because there is no credible evidence of extrajudicial bias. In re Focus
Media, Inc., 378 F.3d 916, 929 (9th Cir. 2004). Debtor also failed to show that the
bankruptcy court’s rulings were the product of “deep-seated favoritism or
antagonism that [made] fair judgment impossible.” Liteky v. United States, 510
U.S. 540, 555 (1994).
AFFIRMED in part, DISMISSED in part.
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