General Electric Capital Corporation et al v. Ten Forward Dining, Inc. et al

Filing 195

ORDER signed by Judge John A. Mendez on 11/27/2013 ORDERING that the Receiver's 181 Ex Parte Application for Authority to Employ Legal Counsel to Assist in Administration of Receivership Estate is GRANTED. KRP's 191 motion to strike is DENIED. (Zignago, K.)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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GENERAL ELECTRIC CAPITAL
CORPORATION, et al.,

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Plaintiffs,
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v.

No.
ORDER
PARTE
KOBRA
LLC’S

2:09-cv-03296 JAM-AC
GRANTING THE RECEIVER’S EX
APPLICATION AND DENYING
RESTAURANT PROPERTIES,
MOTION TO STRIKE

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TEN FORWARD DINING, INC., et
al.,

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Defendants.

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This matter is before the Court on Receiver Bellann Raile’s

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(the “Receiver”) Ex Parte Application for Authority to Employ

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Legal Counsel to Assist in Administration of Receivership Estate

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(Doc. #181). 1

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opposes the application (Doc. #183).

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Corporation, CEF Funding II, LLC, and CEF Funding V, LLC’s

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(“Plaintiffs”) and the Receiver filed replies (Doc. ##190, 192).

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KRP filed objections and a motion to strike Plaintiffs’ reply

Defendant Kobra Restaurant Properties, LLC (“KRP”)
General Electric Capital

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The motions were determined to be suitable for decision without
oral argument. E.D. Cal. L.R. 230(g). No hearing was scheduled.
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(Doc. #191).

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parte application is granted in its entirety and KRP’s motion to

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strike is denied.

For the reasons mentioned below, the Receiver’s ex

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I.

FACTUAL ALLEGATIONS AND PROCEDURAL BACKGROUND

This action originated when Plaintiffs filed their Complaint

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on November 29, 2009, alleging that Defendants Ten Forward

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Dining; Delightful Dining, Inc.; TGIA Restaurants, Inc.; Kobra

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Restaurant Properties, LLC; and Abolghassem Alizadeh defaulted on

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or breached seven written loan contracts made with Plaintiffs

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(Doc. #1).

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either obtained summary judgment against each named entity or

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voluntarily dismissed outstanding claims.

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Court granted Plaintiffs’ motions for entry of judgment and

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appointment of a receiver (Doc. #169). On July 31, 2013, the

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Court appointed Bellann Raile of Cordes & Company as the post-

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judgment receiver for the purposes of carrying out the final

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judgment.

Through the course of the litigation, Plaintiffs have

On July 5, 2013, the

Order Appointing Receiver (“Order”), Doc. #176, at 2.

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II.

OPINION

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A.

Legal Standard

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Pursuant to the Order, the Receiver has the power to sell

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all or any portion of the collateral—two pieces of real property—

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to satisfy the judgment.

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the Receiver was granted various other rights, including the

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right to demand, collect, and receive all rents, profits, and

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income derived from the collateral and to retain any person,

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firm, and attorneys subject to prior authorization of this Court,

Order at 2.

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In addition to this power,

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as required under Local Rule 232(g).

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232(g) provides that “[a] receiver shall not employ an attorney,

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accountant, or investigator without first obtaining an order of

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the Court authorizing such employment, which order may set forth

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a tentative basis for computation of compensation.”

Order 3-4.

Local Rule

L.R. 232(g).

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B.

Discussion

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In this case, the Receiver seeks to engage Bruce Cornelius,

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of counsel to the law firm of Belzer & Murray LLP, to assist her

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with the preparation of all necessary legal documents and

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pleadings to conduct public sales and to obtain direction from

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the Court when faced with opposition to any proposed actions.

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Parte Application, Doc. #181, at 2.

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seeks “legal assistance to present to this Court all appropriate

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motions to approve the sale of the Properties in general

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accordance with the rules of the Court and the powers granted to

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her as Receiver.”

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unless employment of legal counsel is expressly conditioned on

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Plaintiffs’ committing to pay the entire cost of counsel because

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it believes that legal counsel is not necessary to collect rent

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on the triple-net leases.

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Id.

Ex

In addition, the Receiver

KRP opposes the Receiver’s application

Opp. at 10-11.

However, as the Receiver clarifies in her reply, she seeks

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legal counsel not to collect rent, which she concedes is a

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limited task, but to assist her in the marketing and selling of

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the collateral.

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this reason in its opposition.

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forth a reasonable rate of compensation at an hourly billing rate

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of $375 or less as may be charged by other members of the firm.

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Ex Parte Application at 4.

See Receiver Reply at 2.

KRP does not address

Furthermore, the application sets

KRP also argues that the attorneys’
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fees should not be paid from the collateral.

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of how to allocate the fees is not currently before the Court.

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Therefore, the Court finds that employing legal counsel is

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appropriate in this case to assist the Receiver with legal

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matters related to the marketing and selling of the collateral.

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Accordingly, the Court grants the Receiver authority to engage

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legal counsel.

However, the issue

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C.

Plaintiffs’ Reply and KRP’s Objections and Motion

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On November 4, 2011, the Court ordered “Receiver Bellann

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Raile to file a reply in response to Defendants opposition no

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later than Friday, November 8, 2013.”

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On November 8, 2013, Plaintiffs filed a reply (Doc. #190) and KRP

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filed objections to Plaintiffs’ reply and moved to strike a

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portion of the reply (Doc. #191).

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give Plaintiffs leave to file a reply or give KRP leave to file

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objections.

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Plaintiffs’ reply or KRP’s objections and therefore, the Court

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denies KRP’s motion to strike as moot.

Minute Order, Doc. #184.

However, the Court did not

Accordingly, the Court has not considered

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III.

ORDER

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The Receiver’s Ex Parte Application for Authority to Employ

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Legal Counsel to Assist in Administration of Receivership Estate

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is GRANTED.

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KRP’s motion to strike is denied.

IT IS SO ORDERED.
Dated: November 27, 2013

____________________________
JOHN A. MENDEZ,
UNITED STATES DISTRICT JUDGE

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