Jordan Gene Pearlman

1

NOT FOR PUBLICATION

UNITED STATES BANKRUPTCY APPELLATE PANEL
OF THE NINTH CIRCUIT

In re:
JORDAN GENE PEARLMAN,
Debtor.
BAP No. CC-26-1051-CNG

Bk. No. 1:25-bk-11678-VK

MEMORANDUM
∗

PETER BROWN KLEIDMAN,
Appellant,

v.

JORDAN GENE PEARLMAN,
Appellee.

Appeal from the United States Bankruptcy Court
for the Central District of California
Victoria S. Kaufman, Bankruptcy Judge, Presiding

Before: CORBIT, NIEMANN, and GAN, Bankruptcy Judges.

INTRODUCTION
Peter Brown Kleidman, creditor in this no-asset chapter 7
1
case
appeals the bankruptcy court’s order partially overruling his objections to

∗
This disposition is not appropriate for publication. Although it may be cited for
whatever persuasive value it may have, see Fed. R. App. P. 32.1, it has no precedential
value, see 9th Cir. BAP Rule 8024-1.
1
Unless specified otherwise, all chapter and section references are to the
Bankruptcy Code, 11 U.S.C. §§ 101–1532, all “Rule” references are to the Federal Rules of
Bankruptcy Procedure, all “Civil Rule” references are to the Federal Rules of Civil Procedure,
and all “CCP” references are to the California Code of Civil Procedure.
FILED

AUG 11 2026

SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT

2

debtor Jordan Gene Pearlman’s claim of exemptions. Pearlman asserts that
the bankruptcy court erred in entering the order because it did not have
jurisdiction and because Pearlman’s Apple watch should not be classified
and exempted as jewelry. Because we discern no error, we AFFIRM.
FACTS
2

A. Prepetition
Pearlman is a film director, writer and producer. Pearlman and
Kleidman were business associates. In 2007, Kleidman and Pearlman
entered into several agreements related to the financing and operation of
Cinessence, LLC (“Cinessence”). The “2007 Amendment and Fourth
Addendum to Operating Agreement for Cinessence, LLC” (the
“Agreement”) indicated that Kleidman would continue funding
Cinessence (controlled by Pearlman) subject to certain terms and
collateralized by “all assets” of Pearlman.
3

In 2012, after an alleged breach of a guarantee agreement between the
parties, Kleidman filed a complaint in a New York state court against
Pearlman and Cinessence. In January 2020, Kleidman obtained a judgment

2
We have taken judicial notice of the bankruptcy court docket and various
documents filed through the electronic docketing system. See O'Rourke v. Seaboard Sur.
Co. (In re E.R. Fegert, Inc.), 887 F.2d 955, 957-58 (9th Cir. 1989); Atwood v. Chase Manhattan
Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th Cir. BAP 2003).
3
The Agreement referenced several other documents that were either signed
contemporaneously or previously. Those documents included a promissory note in the
initial amount of $5,000,000, two lines of credit, the original operating agreement, three
previous addendums, a security agreement (“Security Agreement”), and Pearlman’s
personal guarantee.

3

against Pearlman and Cinessence for more than $36 million (“Judgment”).
For years thereafter, Kleidman attempted unsuccessfully to collect on the
Judgment.
In April 2015, Pearlman married Elizabeth Hunter. Kleidman
believed that Pearlman’s and Hunter’s premarital agreement was entered
into specifically to shield most of their community property assets from
execution under the Judgment. Consequently, and as part of his ongoing
collection efforts, Kleidman filed two complaints against Pearlman and
Hunter asserting, among other claims, fraudulent transfer causes of action.
Kleidman filed one such complaint in New York and another complaint in
California.
B. Pearlman’s bankruptcy case
On September 11, 2025, while both fraudulent transfer actions were
pending, Pearlman filed a chapter 7 petition. Notwithstanding notice of the
bankruptcy case, Kleidman filed an ex parte motion in the New York action
seeking leave to serve Hunter with process using alternative means. The
New York court granted the motion and Kleidman effectuated service on
Hunter.
Because Kleidman had not sought leave of the bankruptcy court to
continue the action in New York, Pearlman believed that Kleidman’s
actions violated the automatic stay. Pearlman filed a motion seeking
sanctions for the alleged stay violation. Kleidman opposed the motion.

4

Kleidman asserted that his state court actions were solely against Hunter
and not against Pearlman and, thus, did not violate the automatic stay.
In December 2025, after a hearing, the bankruptcy court held that
Kleidman violated the automatic stay. The bankruptcy court awarded
Pearlman fees and costs caused by Kleidman’s stay violation. The award
was affirmed on appeal.
C. Kleidman’s objection to Pearlman’s exemption claims
While the stay violation litigation was pending, Kleidman filed an
objection to Pearlman’s claimed exemptions. Kleidman asserted Pearlman’s
claimed exemptions should not be allowed for a variety of reasons, two are
at issue in this appeal.
First, Kleidman argued that the property was not property of the
estate and therefore, the bankruptcy court had no jurisdiction or authority
to determine the right to exempt such property. Kleidman contended that
the Security Agreement gave him a security interest in all of Pearlman’s
personal property.
4
Therefore, Kleidman asserted that his debt was
“secured by property of the estate,” and pursuant to § 521(a)(2) Pearlman
was required to file a statement of intention within 30 days of filing his
petition. Because Pearlman failed to do so, Kleidman asserted that by
operation of § 362(h), Pearlman’s “property was no longer property of the
estate, [and] Debtor cannot claim any exemptions with respect thereto.”

4
Pearlman did not list any interest in any real property on his schedules.

5

Kleidman attached both a copy of the Judgment and the Security
Agreement to his motion.
Additionally, and in the alternative, Kleidman asserted that
Pearlman’s exemptions should be disallowed because the property interest
sought to be exempted did not fit within the exemption category selected.
Specifically, Kleidman argued that Pearlman’s Apple watch was not
jewelry and, thus, Pearlman could not exempt it pursuant to
CCP § 703.140(b)(4). Kleidman explained that the “American Heritage
Dictionary define[d] jewelry as, “Ornaments, such as bracelets, necklaces,
or rings.” Kleidman maintained that an Apple watch was not an ornament,
so he insisted that Pearlman’s exemption as to the Apple watch “should be
rejected.”
Pearlman disagreed. As to the jurisdictional issue and the alleged
consequence of not completing the statement of intention, Pearlman first
argued that Kleidman only had a “purported security interest,” and
regardless, the property exempted was “after-acquired ‘consumer goods’
[which] are precluded from being subject to a security agreement under
California Commercial Code § 9204(b).” Pearlman also argued that the
statement of intention had no application as it was a business, rather than a
consumer debt. Therefore, Pearlman asserted that the “filing or the non-
filing of a Statement of Intentions” had nothing “to do with the validity of a
claimed exemption.” Finally, Pearlman argued that lien rights were “not

6

affected by an exemption, unless a separate proceeding, such as a § 522(f)
motion” was brought.
As to the Apple watch, Pearlman asserted that other California courts
had found that a watch could be considered jewelry for exemption
purposes.
5
Therefore, Pearlman continued, the bankruptcy court should
allow the exemption. Pearlman further argued that even if the watch was
not considered jewelry, it could be exempted under another exemption
category such as “household goods” or a “tool of the trade.”
After a hearing, the bankruptcy court adopted its tentative ruling
which held, inter alia, that the “existence of a lien is not relevant to
determining whether a debtor is entitled to an exemption listed in their
schedules” and “[u]nder the [California] exemption provisions a watch can
be fairly characterized as jewelry.” The bankruptcy court entered an order
consistent with its tentative ruling (“Exemption Order”).
Kleidman timely appealed the Exemption Order.
JURISDICTION
The bankruptcy court had jurisdiction under 28 U.S.C. §§ 1334 and
157(b)(2)(B). We have jurisdiction under 28 U.S.C. § 158.
ISSUES
Whether the bankruptcy court had jurisdiction to determine the
exemption issue.

5
Pearlman cited In re Gilman, 608 B.R. 714, 723 (Bankr. C.D. Cal. 2019) ( quoting In
re Millington’s Estate, 63 Cal.App. 498 (2013)) in support.

7

Whether the bankruptcy court erred in determining the Apple watch
was subject to a valid exemption.
STANDARDS OF REVIEW
Review of the bankruptcy court’s finding that it had jurisdiction is
de novo. Piombo Corp. v. Castlerock Props. (In re Castlerock Props.), 781 F.2d
159, 161 (9th Cir.1986). “The right of a debtor to claim an exemption is a
question of law we review de novo.” Elliott v. Weil (In re Elliott), 523 B.R.
188, 191 (9th Cir. BAP 2014). The bankruptcy court’s interpretation of state
exemption laws is also reviewed de novo. Calderon v. Lang (In re Calderon),
507 B.R. 724, 728 (9th Cir. BAP 2014). “De novo review requires that we
consider a matter anew, as if no decision had been made previously.”
Francis v. Wallace (In re Francis), 505 B.R. 914, 917 (9th Cir. BAP 2014).
We review the bankruptcy court’s findings of fact with respect to a
claimed exemption for clear error. In re Elliott, 523 B.R. at 191. Factual
findings are clearly erroneous if they are illogical, implausible, or without
support in the record. Retz v. Samson (In re Retz), 606 F.3d 1189, 1196 (9th
Cir. 2010). If two views of the evidence are possible, the court’s choice
between them cannot be clearly erroneous. Anderson v. City of Bessemer City,
470 U.S. 564, 574 (1985).

8

DISCUSSION
A. The bankruptcy court had jurisdiction to issue a final decision on
Pearlman’s scheduled exemptions.
Kleidman argues the bankruptcy court erred because it did not have
jurisdiction to issue a final order on Pearlman’s exemptions because his
personal property was no longer property of the bankruptcy estate.
Kleidman’s assertion, however, is without merit and this “appeal stems
from [Kleidman’s] failure to understand . . . the term ‘exemption’ within a
bankruptcy case.” Wade v. Stevens (In re Wade), BAP No. NC-15-1031-
DJuTa, 2015 WL 6736177, at *2 (9th Cir. BAP Nov. 3, 2015), aff’d, 671 F.
App’x 688 (9th Cir. 2016).
1. Ruling on exemptions is a core proceeding.
In determining the scope of a bankruptcy court’s jurisdiction, our
analysis begins with the statutory scheme because the “jurisdiction of the
bankruptcy courts, like that of other federal courts, is grounded in, and
limited by, statute.” Celotex Corp. v. Edwards, 514 U.S. 300, 307 (1995).
Bankruptcy courts, via referral from the district courts, “may hear and
determine all cases under title 11 and all core proceedings arising under
title 11, or arising in a case under title 11.” 28 U.S.C. § 157(b)(1). The
Bankruptcy Code contains a non-exclusive list of core bankruptcy
proceedings. “The proceedings listed include matters affecting the
administration of the estate, . . . and other proceedings affecting the
liquidation of the assets of the estate or the adjustment of the debtor-

9

creditor relationship.” Battle Ground Plaza, LLC v. Ray (In re Ray), 624 F.3d
1124, 1131 (9th Cir. 2010) (citing 28 U.S.C. § 157(b)(2)(A), (K), (O)). Included
in the list of core proceedings is the bankruptcy court’s determination of
“exemptions from property of the estate.” 28 U.S.C. § 157(b)(2)(B). Because
the exemption litigation was a core proceeding, it was a proper exercise of
the bankruptcy court’s jurisdiction.
2. Exempt property remains part of the bankruptcy estate unless
and until the bankruptcy court orders the property exempt.
When a bankruptcy petition is filed, “all legal or equitable interests of
the debtor in property” become the property of the bankruptcy estate and
are available for distribution to creditors. Rousey v. Jacoway, 544 U.S. 320,
325 (2005) (quoting § 541(a)(1)). However, to allow debtors a financial fresh
start after bankruptcy, the Bankruptcy Code permits debtors to shield, or
exempt, certain interests in property from administration in the bankruptcy
case. § 522(b), (d).
Exemptions are not automatic. Rather, the debtor must file a list of
property that he claims as exempt. Rule 4003(a). A party in interest may
then file an objection to the list of property claimed as exempt within 30
days after the meeting of creditors held under § 341(a) is concluded or
within 30 days after any amendment to the list or supplemental schedules
is filed, whichever is later. Rule 4003(b)(1). If a party in interest does not
object during the objections period “the property claimed as exempt on
such list is exempt.” § 522(l).

10

Based on the foregoing, claimed exempt property remains part of the
bankruptcy estate until the exemption is allowed either because the
statutory time had expired and there was no objection, or the court issues a
ruling allowing the exemption. See Owen v. Owen, 500 U.S. 305, 308 (1991)
(explaining interest in property is withdrawn from the bankruptcy estate
only where an exemption is allowed); see also In re Varney, 449 B.R. 411, 417
(Bankr. D. Idaho 2011) (explaining “even potentially exempt assets
nonetheless become property of the estate upon the commencement of the
bankruptcy case”); In re McAlister, 56 B.R. 164, 166 (Bankr. D. Or. 1985)
(noting “even exempt property must initially be regarded as property of
the estate and then claimed and distributed as exempt”).
Consequently, until the bankruptcy court issued its Exemption
Order, all of Pearlman’s legal and equitable interests in property at the time
of the petition were property of the bankruptcy estate.
3. Because Pearlman did not schedule any secured debts and the
bankruptcy court did not determine that Kleidman was a
secured creditor, § 362(h)(1) was inapplicable.
Kleidman’s primary argument for reversal rests on his assertion that
pursuant to § 362(h)(1), the bankruptcy court lacked jurisdiction to rule on
Pearlman’s claimed exemptions. Kleidman fails “to understand that the
term ‘exemption’ within a bankruptcy case has a different and more
limited effect than does the term in a state court context.” In re Wade, 2015
WL 6736177, at *2.

11

Pursuant to § 521(a)(2), an individual debtor in a case pending under
chapter 7 liable on a debt scheduled as secured by property of the estate must,
within the specified time frame, file a statement of intention indicating
whether the debtor intends to retain, redeem, or surrender property of the
estate subject to a creditor’s lien.
6
The consequence of failing to comply
with § 521(a)(2) is that pursuant to § 362(h), all personal property of the
chapter 7 debtor that secures the scheduled debt, and not just scheduled
property, is removed from bankruptcy estate and placed outside the
protections of the automatic stay.
7
§ 362(h); Samson v. W. Capital Partners,

6
Specifically, § 521(a)(2) provides in relevant part:
(a) The debtor shall−
. . . .
(2) if an individual debtor’s schedule of assets and liabilities includes debts
which are secured by property of the estate—
(A) within thirty days after the date of the filing of a petition under chapter
7 of this title or on or before the date of the meeting of creditors, whichever is
earlier . . . file with the clerk a statement of his intention with respect to the
retention or surrender of such property and, if applicable, specifying that such
property is claimed as exempt, that the debtor intends to redeem such property,
or that the debtor intends to reaffirm debts secured by such property.
7
Specifically, § 362(h) provides in relevant part
(1) In a case in which the debtor is an individual, the stay provided by
subsection (a) is terminated with respect to personal property of the estate or of
the debtor securing in whole or in part a claim, or subject to an unexpired lease,
and such personal property shall no longer be property of the estate if the debtor
fails within the applicable time set by section 521(a)(2)—
(A) to file timely any statement of intention required under section
521(a)(2) with respect to such personal property or to indicate in such
statement that the debtor will either surrender such personal property or
retain it and, if retaining such personal property, either redeem such
personal property pursuant to section 722, enter into an agreement of the
kind specified in section 524(c) applicable to the debt secured by such

12

LLC (In re Blixseth), 454 B.R. 92 (9th Cir. BAP 2011), aff’d, 684 F.3d 865 (9th
Cir. 2012).
Thus, the “combined effect of §§ 362(h) and 521(a)(2) is to lift the stay
and remove personal property from the estate when no timely statement of
intention is filed and a trustee fails to timely file a motion to determine the
value or benefit of the property. The result may be harsh but is not
absurd.” In re Blixseth, 454 B.R. at 98.
According to Kleidman, because Pearlman filed a blank statement of
intention, all of Kleidman’s personal property was removed from the estate
and “the bankruptcy court ha[d ] no jurisdiction to apply exemptions
thereon.” While the § 362(h) argument may have been relevant as to
whether he had to seek relief from the automatic stay to pursue a state
court collection action, it has little relevance to this appeal.
Here, Pearlman did not schedule any secured debt. While Kleidman
disputes the facts as presented by Pearlman in his bankruptcy schedules,
Kleidman did not seek a determination by the bankruptcy court of his
status as a secured creditor, and the bankruptcy court made no finding that
Kleidman had a security interest in Pearlman’s personal property. Thus,

personal property, or assume such unexpired lease pursuant to section
365(p) if the trustee does not do so, as applicable; and
(B) to take timely the action specified in such statement, as it may be
amended before expiration of the period for taking action, unless such statement
specifies the debtor's intention to reaffirm such debt on the original contract
terms and the creditor refuses to agree to the reaffirmation on such terms.

13

the bankruptcy court did not make an error in determining that § 362(h)(1)
did not divest it of jurisdiction and was inapplicable to the determination
of Pearlman’s exempt property.
Therefore, based on the foregoing, the Exemption Order was a proper
exercise of the bankruptcy court’s jurisdiction.
B. The bankruptcy court did not commit error in allowing Pearlman to
exempt the value of the Apple watch as jewelry.
Pearlman sought to exempt $1,200 in jewelry. Pearlman identified the
items of jewelry as an Apple watch, a Hermes bracelet, and a small silver
cross. The relevant California statute states that a debtor may exempt “[t] he
debtor’s aggregate interest, not to exceed one thousand seven hundred fifty
dollars ($1,750) in value, in jewelry held primarily for the personal, family,
or household use of the debtor or a dependent of the debtor.” CCP
§ 703.140(b)(4). Thus, the only restrictions under the applicable statute are
(1) a limitation on the value of the jewelry that can be exempted, and (2) a
requirement that the jewelry be primarily for personal, family, or
household use.
Kleidman argues on appeal that the bankruptcy court erred in
determining Pearlman’s Apple watch could be exempted as jewelry.
Kleidman argues that the watch is not jewelry, rather it is a luxury item in
the form of a wearable mini-computer. Kleidman further asserts that the
case relied upon by the bankruptcy court, In re Frazier, 104 B.R. 255, 260–61

14

(Bankr. N.D. Cal. 1989), is no longer good law because it was a “1989 case,
decided well before Apple watches were introduced.”
In Frazier, the court found that despite creditor’s assertions to the
contrary, the debtor’s “watch collection could be fairly characterized,
alternately, as jewelry, an heirloom, wearing apparel or personal
effects . . . [because] there [was] no evidence that the watch collection [was]
not ordinarily and reasonably necessary for the debtor’s personal use.” In
re Frazier, 104 B.R. at 260-61.
Here, the bankruptcy court noted that Pearlman was seeking to
exempt an interest in jewelry with a total value less than that allowed by
the California exemption statute. The bankruptcy court additionally
adopted and applied Frazier’s holding. Beyond disagreeing with the
bankruptcy court’s determination, Kleidman provides no basis for us to
determine that the bankruptcy court’s findings are clearly erroneous or that
Frazier is no longer good law. From the record, we determine that the
bankruptcy court did not clearly error in finding that regardless of
advancements in technology, Pearlman’s Apple watch was for his personal
use and qualified as exempt jewelry pursuant to CCP § 703.140(b)(4).
8

8
To the extent that both parties debate whether Kleidman has a security interest
in the Apple watch, that issue was not decided by the bankruptcy court and we decline
to address it. See United States v. Weitzenhoff, 35 F.3d 1275, 1287 (9th Cir. 1993)
(“Resolving doubtful questions of law is the distinct and exclusive province of the trial
judge.”) (internal quotation marks omitted).

15

CONCLUSION
For the reasons set forth above, we AFFIRM.