Bank of Montreal v. California Franchise Tax Board et al

Filing 33

ORDER signed by Judge Lawrence K. Karlton on 6/6/2012 REMANDING case to USBC - Eastern District of CA with instructions to vacate the stays or explain why stays should remain in place in light of Salyer's guilty pleas. This action is TERMINATED. (Marciel, M)

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UNITED STATES DISTRICT COURT
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EASTERN DISTRICT OF CALIFORNIA
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In re:
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SK FOODS, L.P., a California
limited partnership,

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Debtors.
/

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BRADLEY D. SHARP, et al.,

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Plaintiffs,

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v.

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CIV. NO. S-11-1839 LKK

FRED SALYER IRREVOCABLE
TRUST, et al.,

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Defendants.
/

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In re:
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SK FOODS, L.P., a California
limited partnership,

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Debtors.
/

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BRADLEY D. SHARP, et al.,
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Plaintiffs,
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v.

CIV. NO. S-11-1840 LKK

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SKF AVIATION, LLC, et al.,
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Defendants.
/

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In re:

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SK FOODS, L.P., a California
limited partnership,

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Debtors.
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/
BRADLEY D. SHARP, et al.,

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Plaintiffs,
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v.

CIV. NO. S-11-1841 LKK

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SCOTT SALYER, as trustee of
the Scott Salyer Revocable
Trust, et al.,

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Defendants.
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In re:
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SK FOODS, L.P., a California
limited partnership,

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Debtors.
/

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BRADLEY D. SHARP, et al.,

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Plaintiffs,

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v.

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CIV. NO. S-11-1842 LKK

SSC FARMS 1, LLC, et al.,
Defendants.

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/
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In re:

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SK FOODS, L.P., a California
limited partnership,

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Debtors.
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BANK OF MONTREAL, as
Administrative Agent, successor
by Assignment to Debtors SK Foods,
L.P. and RHM Industrial
Specialty Foods, Inc, a
California corporation, d/b/a
Colusa County Canning Co.,

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2

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Appellant,

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v.

CIV. NO. S-11-1845 LKK

SCOTT SALYER, et al.,

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Appellees.
/

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In re:

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SK FOODS, L.P., a California
limited partnership,

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Debtors.
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BANK OF MONTREAL, as
Administrative Agent, successor
by Assignment to Debtors SK Foods,
L.P. and RHM Industrial
Specialty Foods, Inc, a
California corporation, d/b/a
Colusa County Canning Co.,

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Appellant,
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v.

CIV. NO. S-11-1846 LKK

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INTERNAL REVENUE SERVICE, et al.,
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Appellees.
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In re:
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SK FOODS, L.P., a California
limited partnership, et al.,

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Debtors.

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BANK OF MONTREAL, as
Administrative Agent, successor
by Assignment to Debtors SK Foods,
L.P. and RHM Industrial
Specialty Foods, Inc, a
California corporation, d/b/a
Colusa County Canning Co.,
Appellant,
v.

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CSSS, L.P.,
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CIV. NO. S-11-1847 LKK

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Appellee.
/

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In re:

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SK FOODS, L.P., a California
limited partnership, et al.,

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Debtors.
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BANK OF MONTREAL, as
Administrative Agent, successor
by Assignment to Debtors SK Foods,
L.P. and RHM Industrial
Specialty Foods, Inc, a
California corporation, d/b/a
Colusa County Canning Co.,

CIV. NO. S-11-1849 LKK

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Appellant,
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v.
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CALIFORNIA FRANCHISE TAX
BOARD, et al.,

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Appellees.
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In re:

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SK FOODS, L.P., a California
limited partnership, et al.,

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Debtors.
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BANK OF MONTREAL, as
Administrative Agent, successor
by Assignment to Debtors SK Foods,
L.P. and RHM Industrial
Specialty Foods, Inc, a
California corporation, d/b/a
Colusa County Canning Co.,

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Appellant,
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v.
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CALIFORNIA FRANCHISE TAX
BOARD, et al.,
Appellees.
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CIV. NO. S-11-1850 LKK

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In re:

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SK FOODS, L.P., a California
limited partnership, et al.,

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Debtors.
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BANK OF MONTREAL, as
Administrative Agent, successor
by Assignment to Debtors SK Foods,
L.P. and RHM Industrial
Specialty Foods, Inc, a
California corporation, d/b/a
Colusa County Canning Co.,

CIV. NO. S-11-1853 LKK

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Appellant,
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v.
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CARY SCOTT COLLINS, et al.,
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Appellees.
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In re:
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SK FOODS, L.P., a California
limited partnership, et al.,

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Debtors.

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BANK OF MONTREAL, as
Administrative Agent, successor
by Assignment to Debtors SK Foods,
L.P. and RHM Industrial
Specialty Foods, Inc, a
California corporation, d/b/a
Colusa County Canning Co.,
Appellant,

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v.

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CIV. NO. S-11-1855 LKK

CARY SCOTT COLLINS, et al.,
Appellees.

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O R D E R
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I.

BACKGROUND

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On June 28, 2011, the Bankruptcy Court implemented this

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court’s December 10, 2010 and April 14, 2011 remand orders1 by

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issuing stays in the above-referenced adversary proceedings. This

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court’s remand order, in turn, was predicated upon the pendency of

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the federal criminal prosecution against F. Scott Salyer,2 and the

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factors set forth in Keating v. Office of Thrift Supervision, 45

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F.3d 322, 324 (9th Cir. 1995).

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Salyer has now pled “guilty” in his criminal case, although

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the case is still pending, with sentencing yet to be determined.

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The Keating factors therefore do not appear to weigh in favor of

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a continued stay, especially those factors relating to the public

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interest in protecting the constitutionally protected right of

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presumed innocence, and the obligation of proof, which falls only

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on the prosecution.

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The court is aware that Salyer pled guilty under a procedure

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that permits him to withdraw his guilty plea if this court rejects

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the plea agreement reached by the prosecution and the defense.3

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The court is also aware, however, that both the government and

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Salyer are represented by highly competent counsel who know far

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more about this criminal case than does the court, including the

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respective likelihoods of success at trial. The remote chance that

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See SSC Farms I, LLC v. Sharp, 11-cv-1492-LKK (Dkt. Nos. 56
and 74).

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See U.S. v. Salyer, 10 Cr. 61 (E.D. Cal.).

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See Fed. R. Crim. P. 11(c)(3) & 11(c)(5)(B).
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this court would reject the sentencing range under these conditions

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does not appear sufficient to justify a continued stay of the

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Bankruptcy Court proceedings.

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Accordingly, these matters are remanded to the Bankruptcy

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Court with instructions to vacate the stays, or to explain why the

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stays should remain in place in light of Salyer’s guilty pleas.

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IT IS SO ORDERED.

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DATED:

June 6, 2012.

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