Case Number: EC054118    Hearing Date: July 25, 2014    Dept: NCD

TENTATIVE RULING (7-25-14)
#16
EC 054118
NARA BANK v. PAYLESS WHOLESALE

Motion of Court Appointed Receiver David P. Stapleton for an Order Authorizing Sale of Receivership Property

TENTATIVE:
Motion is DENIED for failure, apparently, to provide appropriate notice of this hearing or of the sale. Upon a showing of proper notice, the Court would expect to grant the motion.

SUMMARY OF FACTS:
The action is a collection action brought by plaintiff Nara Bank against defendants Payless Wholesale, Rimoun Mansour, and Adib Sirope alleging that defendants failed to pay sums due under a Business Loan Agreement, Promissory Note, and Commercial Security Agreement, which was personally guaranteed by the individuals. Plaintiff also brought claims against defendants’ wives, Salwa Mansour and Nina Homsi, for fraudulent transfer. Defendants Payless Wholesale, Adib Sirope and Salwa Mansour have had default judgment entered against them. Defendant Nina Homsi has been dismissed. On June 7, 2011, plaintiff Nara Bank filed a Stipulation for Entry of Judgment as to Rimoun Mansour providing that judgment in the matter could be entered in the sum of $600,000.

On December 13, 2013, the court granted a motion appointing a receiver to take possession and control of the liquor license and all parts of the business property run as a Liquor Store by judgment debtor Rimoun Mansour. The Receiver, David P. Stapleton, has filed his receiver’s bond and an Initial Inventory and Report.

ANALYSIS:
Procedural
No Proof of Service
There is no proof of service of the moving papers on any party, including the judgment debtor. The motion indicates that service will be made on the judgment debtor and interested parties so that they can file objections. [See Stapleton Decl., para. 8]. This motion was filed only sixteen court days prior to the date set for hearing, so it appears doubtful that the motion can be served on sufficient notice.

Under CCP § 568.5:
“A receiver may, pursuant to an order of the court, sell real or personal property in the receiver’s possession upon the notice and in the manner prescribed by Article 6 (commencing with Section 701.510) of Chapter 3 of Division 2 of Title 9. The sale is not final until confirmed by the court.”

In any case under CRC Rule 3.1300, “(a) Unless otherwise ordered or specifically provided by law, all moving and supporting papers must be served and filed in accordance with Code of Civil Procedure section 1005.” Under subdivision (c), “Proof of service of the moving papers must be filed no later than five calendar days before the time appointed for the hearing.”

Here, unless proof of service is provided at least five calendar days prior to the hearing, showing personal service of the motion on or before July 2, 2014, and appropriate notice of sale pursuant to statute, the motion cannot properly be considered by the court at this time.

Substantive
Here, the receiver proposes to sell Hughie’s Liquor, including its liquor license, furniture, fixtures, equipment, tradename, goodwill, lease, leasehold improvements, inventory of stock in trade and a covenant not to compete, as is, to Hughie’s Liquor, Inc. for $180,000 all cash. A copy of the Business Purchase Contract and Joint Escrow Instructions is attached as Exhibit 4.

The declaration of the receiver indicates that he hired a commercial real estate broker who specializes in the sale of liquor stores and markets, that he marketed the property for 45 days, generating significant interest, gave potential buyers a date by which they had to submit offers, and that the broker and receiver then reviewed each of the offers, narrowing them down to the two best and highest, and soliciting best and final offers, of which the $180,000 cash offer was the best made and accepted. [Stapleton Decl., para. 3]. The receiver states that “It is my professional opinion that $180,000 in cash is not only a fair and reasonable sales price for the Property, but the best offer I am likely to receive for the Property.” [Stapleton Decl., para. 3]. The court may require further evidence at the hearing regarding these valuation issues before approving the transaction.

There is no opposition filed here, and no argument that the price being offered is not in fact within the reasonable range to be expected to be obtained with respect to these assets.