In Re: SK Foods, L.P.

Filing 17

ORDER signed by Senior Judge Lawrence K. Karlton on 11/25/2013 ORDERING the judgment of the Bankruptcy Court, granting summary judgment to BMO, is hereby AFFIRMED. CASE CLOSED. (Waggoner, D)

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UNITED STATES DISTRICT COURT

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EASTERN DISTRICT OF CALIFORNIA

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CSSS, L.P., d/b/a CENTRAL
VALLEY SHIPPERS,

No.

CIV. S-13-522 LKK

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Appellant,
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ORDER
v.

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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.,
Defendants.

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On February 13, 2013, the Bankruptcy Judge granted the Bank

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of Montreal’s (“BMO”) un-opposed motion for summary judgment

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against CSSS, LLP, dba CVS (“CVS”).

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CVS appeals.

For the reasons that follow, the court will affirm the
bankruptcy court’s order.
I.

BACKGROUND

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On August 21, 2009, the Trustee in the SK Foods, Inc.

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bankruptcy case filed an adversary proceeding against CSSS, LLP
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dba Central Valley Shippers (“CVS”) “to avoid and recover” a

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“fraudulent conveyance” of the “drum line” from SK Foods, Inc. to

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CVS.

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The Drum Line transfer was evidenced by sale documents dated

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December 1, 2008, five months before SK Foods filed for

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bankruptcy.

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transferred the “Drum Line” to CVS in exchange for a worthless,

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unsecured $350,000 promissory note.

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made in connection with the note, and no payments of any kind

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Appellant’s Excerpts of Record (“ER”) (ECF No. 10-1) 1.1

ER 2 ¶¶ 9 & 14.

The Complaint alleges that SK Foods

There was no down payment

were ever made on the note.

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On September 23, 2009, CVS filed its Answer to the adversary

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Complaint.

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(ECF No. 11-3).

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was substituted in for the Trustee as plaintiff.

BMO’s Supplemental Excerpts of Record (“BMO SER”) 12
On April 14, 2011, the Bank of Montreal (“BMO”)
ER 70.

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A.

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CVS failed to oppose the summary judgment motion because, it

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asserts, it was unrepresented by counsel and therefore prohibited

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from filing papers in court.

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brief look at the lawyers representing CVS.

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relevant because in rendering summary judgment, the Bankruptcy

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Court was plainly exasperated by the “revolving door” of CVS

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lawyers in and out of his courtroom.

The CVS Lawyers.



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The court therefore begins with a
This look is

On September 23, 2009, the date CVS filed its Answer,

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it was represented by Larry J. Lichtenegger, Esq. (The

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Law Office of Larry J. Lichtenegger).

See BMO SER 12

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Sharp v. CSSS (In re SK Foods, L.P.), Adv. Proc. 9-2543 (Bankr.
E.D. Cal.) (Bardwill, Bankr. J.).

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(CVS Answer).


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On May 19, 2010, Andrea M. Miller, Esq. (Negeley

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Meredith & Miller, Inc.), replaced Lichtenegger as

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CVS’s lawyer.


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Bankr. ECF No. 134.

On August 30, 2011, Kelly A. Woodruff (Farella Braun +
Martel LLP), replaced Miller as CVS’s lawyer.



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On September 24, 2012, Holly L. Hostrop, Esq. (Law

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Office of Holly L. Hostrop), replaced Woodruff as CVS’s

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lawyer.2

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“[S]taring in early December 2012,” Hostrop provided written

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notice to CVS that she planned to withdraw as its counsel.

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SER 556 ¶ 4 (Declaration of Holly L. Hostrop dated January 2,

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2013).

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as counsel for CVS.

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for a hearing on January 16, 2013.4

BMO

On January 2, 2013, Hostrop filed her motion to withdraw
ER 108.3

The withdrawal motion was noticed
On January 8, 2013, BMO

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In fact, the move from Woodruff to Hostrop was not quite that
simple or clear-cut. On April 11, 2012, Woodruff filed a motion
to withdraw as counsel for a host of Salyer entities, and the
motion was granted on May 11, 2012. Bankr. ECF Nos. 339 (motion)
& 352 (order). CVS was not among the Salyer entities listed in
the withdrawal motion. However, this appears to have been an
oversight. The Bankruptcy Court and all parties apparently
believed that Woodruff withdrew as counsel for CVS.
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Like Woodruff before her, Hostrop inadvertently omitted CVS
from the list of entities she would no longer represent. Id.
However, she clarified that this was an oversight and that her
motion included CVS. The Bankruptcy Court order granting the
withdrawal listed CVS among the entities no longer being
represented by Hostrop. Bankr. ECF No. 479.
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The motion papers designate February 13, 2013 as the hearing
date, but a successful ex parte Application To Shorten Time moved
the hearing date to January 16, 2013. See Bankr. ECF No. 461
(Order Shortening Time).

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filed its response to the withdrawal motion.

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BMO did not object to the withdrawal, but noting that CVS would

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be unable to file pleadings if its counsel withdrew without

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substituting in new counsel, BMO requested that no delay should

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result from the withdrawal.

Bankr. ECF No. 462.

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B.

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On January 11, 2013 BMO filed its motion for summary

The Summary Judgment Motion.

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judgment against CVS.

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represented by counsel, namely, Ms. Hostrop.

ER 118.

On that date, CVS was still
The motion advised

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CVS that an opposition was due on January 30, 2013, pursuant to

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the Bankruptcy Court’s local rules.

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No. 469 (notice of motion).

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summary judgment motion would be due after counsel had withdrawn,

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CVS (which, to repeat, was then represented by counsel), did

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nothing to protect its position.

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days between BMO’s notice of the summary judgment motion, and the

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order granting Hostrop’s motion to withdraw, CVS – while still

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represented by Hostrop – took no action to protect its position,

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seek an extension or a continuance or to otherwise address the

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pending summary judgment motion.

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ECF No. 10 at 12; Bankr. ECF

Even though the opposition to the

Indeed, during the seven (7)

On January 17, 2013, the Bankruptcy Court granted Hostrop’s

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motion to withdraw as counsel to CVS.

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was substituted in to replace Hostrop.

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ER 146.

No other attorney

CVS’s January 30, 2013 deadline for filing an opposition to

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the motion for summary judgment came and went, with CVS taking no

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action.

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summary judgment hearing, Wednesday, February 13, 2013.

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date, Kimberly A. Wright, Esq. (Law Office of Kimberly A. Wright,

In fact, CVS maintained silence until the date of the

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On that

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Esq.), made an appearance as CVS’s new attorney.

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notice made no reference to the summary judgment motion scheduled

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for that day, made no request for an extension or a stay for that

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hearing, made no reference to CVS’s failure to respond to the

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summary judgment motion, and proffered no evidence that might

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have precluded the summary judgment.

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concurrent filing addressing the pending motion.

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ER 162.

The

Nor did Wright make any

Instead, Wright simply appeared at the summary judgment
hearing that day.

ER 211 (transcript of proceedings).

Judge

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Bardwill asked whether CVS “consents or takes issue with the

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Court’s tentative.”

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to it.”

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Judge Bardwill heard BMO’s counsel’s views on Wright’s tardy

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appearance in the case, and then stated:

Id.

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Wright responded, “I’d like to respond

She never got the chance to respond however, as

I'm inclined not to hear argument.
Miss
Wright, whether you're kind of in the 11th
hour.
There has been a revolving door of
people in and out of the case. It's been to
the detriment of the moving party
in this
case.
There was no opposition filed – no
opposition whatsoever filed to the motion for
summary.
At this time, I'm going to adopt
the tentative as the final and that will be
done by a minute order.
The motion will be
granted.

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Id.

ER 212.

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The Bankruptcy Court thereupon granted BMO’s motion for

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summary judgment, adopted the court’s reasoned tentative order as

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the final order, entered judgment for BMO, and denied as moot

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BMO’s motion to strike CVS’s answer (which was requested so that

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a default judgment could be entered).

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(civil minute order), 170 (judgment), 171 (notice of entry of

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judgment).
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ER 164 (minutes), 169

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II.
1.

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ISSUES ON APPEAL

Whether the Bankruptcy Court abused its discretion

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by not granting an extension of time for CVS to oppose the

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summary judgment motion and not finding that CVS’s failure to

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oppose the motion was due to excusable neglect.
2.

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summary judgment to BMO.
3.

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Whether the Bankruptcy Court erred in awarding BMO

a $1.5 million judgment against CVS.

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Whether the Bankruptcy Court erred in granting

III. STANDARDS
A.

Standard of Review.
1.

Summary judgment.

When reviewing the factual findings and legal conclusions of

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the bankruptcy court, the district court applies the same

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standard of review that the Court of Appeals uses when reviewing

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bankruptcy court findings and conclusions.

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re Olshan), 356 F.3d 1078, 1083 (9th Cir. 2004) (in reviewing

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bankruptcy court decisions, the Court of Appeals uses “the same

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standard of review applied by the district court”).

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like the Court of Appeals, this court

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Neilson v. U.S. (In

Accordingly,

review[s] de novo the bankruptcy court's
conclusions
of
law,
including
its
interpretation of the Bankruptcy Code.
We
review
the
bankruptcy
court's
factual
findings for clear error.
Under this
standard, we accept findings of fact made by
the bankruptcy court unless these findings
leave the definite and firm conviction that a
mistake has been committed by the bankruptcy
judge.

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Rains v. Flinn (In re Rains), 428 F.3d 893, 900 (9th Cir. 2005);

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Fed. R. Bankr. P. 8013 (bankruptcy court’s findings of fact, on
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appeal to the district court, “shall not be set aside unless

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clearly erroneous”).

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2.

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The denial of a request for a continuance of
summary judgment pending further discovery is
reviewed for an abuse of discretion. … A
district court abuses its discretion only if
the party requesting a continuance can show
that allowing additional discovery would have
precluded summary judgment.

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Continuance.

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Michelman v. Lincoln Nat. Life Ins. Co., 685 F.3d 887, 892 (9th

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Cir. 2012).

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B.

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Summary judgment is appropriate “if the movant shows that

Summary Judgment.

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there is no genuine dispute as to any material fact and the

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movant is entitled to judgment as a matter of law.”

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P. 56(a); Ricci v. DeStefano, 557 U.S. 557, 586 (2009) (it is the

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movant’s burden “to demonstrate that there is ‘no genuine issue

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as to any material fact’ and that the movant is ‘entitled to

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judgment as a matter of law’”); Walls v. Central Contra Costa

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Transit Authority, 653 F.3d 963, 966 (9th Cir. 2011) (per curiam)

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(same).

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Fed. R. Civ.

Consequently, “[s]ummary judgment must be denied” if the

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court “determines that a ‘genuine dispute as to [a] material

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fact’ precludes immediate entry of judgment as a matter of law.”

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Ortiz v. Jordan, 562 U.S. ___, 131 S. Ct. 884, 891 (2011),

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quoting Fed. R. Civ. P. 56(a); Comite de Jornaleros de Redondo

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Beach v. City of Redondo Beach, 657 F.3d 936, 942 (9th Cir. 2011)

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(en banc) (same), cert. denied, 132 S. Ct. 1566 (2012).

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Under summary judgment practice, the moving party bears the

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initial responsibility of informing the district court of the

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basis for its motion, and “citing to particular parts of the

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materials in the record,” Fed. R. Civ. P. 56(c)(1)(A), that show

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“that a fact cannot be ... disputed.”

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Nursing Home Pension Fund, Local 144 v. Oracle Corp. (In re

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Oracle Corp. Securities Litigation), 627 F.3d 376, 387 (9th Cir.

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2010) (“The moving party initially bears the burden of proving

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the absence of a genuine issue of material fact”) (citing Celotex

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Fed. R. Civ. P. 56(c)(1);

v. Catrett, 477 U.S. 317, 323 (1986)).
A wrinkle arises when the non-moving party will bear the

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burden of proof at trial. In that case, “the moving party need

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only prove that there is an absence of evidence to support the

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non-moving party’s case.” Oracle Corp., 627 F.3d at 387.

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If the moving party meets its initial responsibility, the

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burden then shifts to the non-moving party to establish the

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existence of a genuine issue of material fact.

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Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585-86 (1986);

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Oracle Corp., 627 F.3d at 387 (where the moving party meets its

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burden, “the burden then shifts to the non-moving party to

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designate specific facts demonstrating the existence of genuine

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issues for trial”).

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rely upon the denials of its pleadings, but must tender evidence

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of specific facts in the form of affidavits and/or other

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admissible materials in support of its contention that the

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dispute exists.

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Matsushita Elec.

In doing so, the non-moving party may not

Fed. R. Civ. P. 56(c)(1)(A).

“In evaluating the evidence to determine whether there
is a genuine issue of fact,” the court draws “all reasonable
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inferences supported by the evidence in favor of the non-moving

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party.”

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considers inferences “supported by the evidence,” it is the non-

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moving party’s obligation to produce a factual predicate as a

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basis for such inferences.

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Lines, 810 F.2d 898, 902 (9th Cir. 1987).

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“must do more than simply show that there is some metaphysical

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doubt as to the material facts ....

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whole could not lead a rational trier of fact to find for the

Walls, 653 F.3d at 966.

Because the court only

See Richards v. Nielsen Freight
The opposing party

Where the record taken as a

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nonmoving party, there is no ‘genuine issue for trial.’”

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Matsushita, 475 U.S. at 586-87 (citations omitted).

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IV.

ANALYSIS

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A.

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CVS complains that at the summary judgment hearing, the

Extension.

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Bankruptcy Court “refused to … entertain a request for

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continuance.”

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fact no such “request” was ever made in the Bankruptcy Court, CVS

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argues that the court “should have sua sponte continued the

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hearing to allow CVS’ new counsel an opportunity to respond to

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the MSJ on the merits.”

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to CVS, the Bankruptcy Court “abused its discretion” by not

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hearing argument, and by not granting a continuance sua sponte.

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ECF No. 10 at 17.

However, acknowledging that in

ECF No. 10 at 18.

In summary, according

Unsurprisingly, CVS cites no authority for these

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propositions.

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(neither when it learned that its former counsel was withdrawing,

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nor after it hired new counsel), did not ask for a continuance at

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the hearing, did not seek leave to file a late opposition, and

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did not seek reconsideration on the grounds that a continuance

CVS did not file a request for a continuance

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was necessary.

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position, other than show up, apparently unprepared, at the

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hearing, and then file this appeal.

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In short, CVS did nothing to protect its

The question for this court is whether the Bankruptcy Court

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abused its discretion.

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CVS’s argument is premised upon its assertion that it “had no

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ability” to respond to the summary judgment motion because it was

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a corporation without legal counsel.

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Ms. Hostrop had recently moved to withdraw as counsel, Defendant

This court concludes that it did not.

ECF No. 10 at 12 (“As

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was without counsel and was unable to prepare or file an

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opposition to the MSJ by the deadline”) & 17 (“When the MSJ was

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pending and CVS had not yet retained an attorney for this action,

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it had no ability to file papers or appear in court”).

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CVS’s premise is false.

At the time the summary judgment

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motion was filed, January 11, 2013, CVS was represented by

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counsel.

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representation of CVS, only the court’s order could do that.

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E.D. Cal. R. 182(d) (“The authority and duty of the attorney of

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record shall continue until relieved by order of the Court”);

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Cal. Prof. Conduct R. 3-700(A)(1) (“If permission for termination

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of employment is required by the rules of a tribunal, a member

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shall not withdraw from employment in a proceeding before that

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tribunal without its permission”).

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Counsel’s motion to withdraw as counsel did not end her
See

Therefore, contrary to its assertion, CVS was able to

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respond to the summary motion.

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counsel, could have requested an extension of the opposition

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deadline and/or a continuance of the hearing to give it an

At a minimum, CVS, through its

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opportunity to obtain replacement counsel.5

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It did nothing.6

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CVS did not do so.

CVS obtained replacement counsel – Ms. Wright – over the

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weekend of February 8-10, 2013.

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point, CVS was in default on the summary judgment motion, not

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having filed an opposition or a Statement of Non-Opposition.

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Over the next two full business days before the February 13, 2013

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hearing, CVS again did nothing.

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by new counsel, CVS still did not seek a continuance from the

See ECF No. 10 at 17.

At that

Although it was then represented

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court or request one from opposing counsel.

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leave to file a late opposition, even though such a procedure is

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specifically permitted under the Bankruptcy Rules.

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Bankr. P. 9006(b)(1)(2) (enlargement of time after the deadline

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has passed, if “excusable neglect” is shown).

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Nor did CVS seek

See Fed. R.

Instead, CVS’s new attorney waited until the day of the
hearing to file her notice of appearance.

She did not, even

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The court notes that CVS does not assert, nor offer any
evidence, that departing counsel abandoned it with a summary
judgment motion pending against it. This court will not simply
assume that a member of the bar, in good standing, has abandoned
her client, without so much as an allegation or a shred of
evidence pointing to such a possibility. Accordingly, this court
is left with no explanation for why counsel withdrew without
taking any action to protect her client from the pending summary
judgment motion.

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Of course, there is no guarantee that the Bankruptcy Court
would have granted a requested extension or continuance.
However, the denial of such an apparently reasonable request, had
it been made, in light of the impending departure of CVS’s
attorney at the same time an opposition to the summary judgment
motion was due, would be viewed in a very different light on
appeal than CVS’s failure to take any action to protect its
position.

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then, file a request for a continuance, nor a request to file a

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late opposition, nor did she file anything to show that the

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continuance would have made a difference in the outcome of the

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summary judgment motion.

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and found herself cut off by the judge after she stated that she

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wanted to “respond” to the summary judgment motion.

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She simply showed up at the hearing,

CVS asserts that the bankruptcy court was not permitted to

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grant summary judgment “‘simply because a party fails to file an

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opposition or violates a local rule,’” quoting Ahanchian v. Xenon

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Pictures, Inc., 624 F.3d 1253, 1258 (9th Cir. 2010).

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rule in the Ninth Circuit, however that is not what happened

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here.

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That is the

In Ahanchian, the plaintiff faced an “unreasonably strained

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deadline[]” for responding to a summary judgment motion of only

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eight (8) days, three of them being over the Labor Day weekend,

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and during which plaintiff’s lead counsel was travelling out of

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town.

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response time was unreasonably short here.

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plaintiff asked defendant to stipulate to a one-week extension of

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the opposition due date and a corresponding one-week continuance

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of the hearing date, but defendant refused.

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assert that it sought a stipulated extension or continuance here.

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The very next day, the Ahanchian plaintiff filed an ex parte

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application, pursuant to the local rules, seeking the one-week

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extension, and reciting good cause for the request.7

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Ahanchian, 624 F.3d at 1257.

CVS does not assert that the
The Ahanchian

Id.

CVS does not

Id.

CVS

“(1)defendants had waited until the last day to file their
motions, choosing to file four days before the Labor Day weekend,
and with knowledge of pending depositions; (2) the accompanying
motions and exhibits amounted to 1,000 pages of materials; (3)
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made no application for an extension or a continuance of the

2

hearing here.

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opposition late, together with an application for permission to

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make the late filing.8

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opposition here, and did not seek to file a late opposition.9

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Ultimately, the Ahanchian plaintiff filed its

Id.

CVS never filed or offered an

In short, CVS gave the Bankruptcy Court no basis for

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continuing the summary judgment hearing, or permitting CVS to

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file a late opposition.

There is no basis for finding that the

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Ahanchian's lead counsel had left the state on August 25 on a
prescheduled trip and would not be returning until September 2
[the day the opposition was due]; and (4) Ahanchian, who was
needed to respond to the motion, was also out of town over Labor
Day weekend.” Ahanchian, 624 F.3d at 1257.
8

Despite the time pressure, plaintiff in Ahanchian tried to file
on time. The late filing was the result of a miscalculation on
the part of plaintiff’s counsel, compounded by a technological
problem beyond his control. Ahanchian, 624 F.3d at 1257 n.4
& 1262.
9

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CVS’s new counsel cannot claim that she was unaware of her
right to seek leave to file a late opposition. In this very
adversary proceeding, counsel filed a motion seeking exactly this
relief on behalf “respondents” F. Scott Salyer and Monterey
Peninsula Farming, LLC. Bankr. ECF No. 523. There, she made
exactly the arguments to the Bankruptcy Court that she now makes
directly to this court:
Pursuant
to
Bankruptcy
Rule
9006(b)(2),
Respondents,
Frederick
Scott
Salyer
and
Monterey
Peninsula
Farming,
LLC,
(“Respondents”) hereby move for leave to file
a late response to Plaintiff’s Request for
Entry of Default Judgment.
This Motion is
made on the grounds that Respondents’ were
unrepresented by counsel when Plaintiff, Bank
of Montreal, filed its motion requesting
entry of default judgment.

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ECF No. 523 at 1-2.
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Bankruptcy Court abused its discretion in this matter.

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B.

3

On appeal, CVS asserts that somewhere in the record before

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the Bankruptcy Court, there is evidence creating genuine issues

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of material fact, thus precluding summary judgment.

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quotes Ahanchian here, asserting that the bankruptcy court “must

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‘analyze the record to determine whether any disputed material

8

fact [is] present.’”

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record before the Bankruptcy Court that puts any material fact

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The Grant of Summary Judgment.

CVS again

However, CVS identifies no evidence in the

genuinely in dispute.
In order to prevail on its summary judgment motion, BMO was

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required to show: (1) SK Foods transferred the Drum Line to CVS

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within two years before the date of the bankruptcy petition;

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(2) SK Foods “received less than a reasonably equivalent value in

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exchange” for the Drum Line; and (3) SK Foods was insolvent on

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the date of the transfer, or became insolvent by the transfer.

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11 U.S.C. § 548(a).

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transferred to CVS within two years of the bankruptcy petition

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date in exchange for the $350,000 unsecured promissory note.

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1.

CVS does not dispute that the Drum Line was

Reasonably equivalent value.

BMO established, through the Declaration of Shondale

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Seymour, CFO of SK Foods, that the $350,000 unsecured promissory

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note from CVS was worthless.

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No. 11-16) ¶¶ 11 & 12.

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make the interest payments on the note – the only payments due

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for the first five years of the note – nor the $350,000

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principal, when it came due in June 2013.

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BMO SER 424-25 (Seymour Decl.) (ECF

Seymour testified that CVS was unable to

BMO SER 425 ¶ 12.

CVS identifies no evidence in the record before the
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Bankruptcy Court to refute BMO’s showing that the promissory note

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was worthless.

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the Drum Line to CVS for $350,000, as reflected in the promissory

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note.

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to the sale documents themselves).

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evidence in the record before the Bankruptcy Judge tending to

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show that the promissory note had any value at all; rather, the

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only evidence shows that it was worthless.

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Instead, CVS simply repeats that “SK Foods sold

(ER pp. 27-42).”

Appellant’s Brief at 3 & 17 (citing only
In short, there was no

The promissory note, however, is just one side of the

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“reasonably equivalent value” equation.

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second requirement of Section 548(a)(1), BMO must show that the

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Drum Line itself is not worthless.

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promissory note would have been exchanged for the worthless Drum

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Line, a thing of reasonably equivalent – zero – value.

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showing here, while not as definitive as its showing on the

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promissory note, is sufficient to establish that the Drum Line

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had some value at the time of the transfer.

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In order to meet the

Otherwise, the worthless

BMO’s

The evidence in the record before the Bankruptcy Judge was

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that the Drum Line was instrumental in SK Foods’s business.

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41 (Shondale Decl.) ¶ 5.

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operational, the Drum Line “would sell for USD $1,500,000 as a

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used/reconditioned production line,” after a $400,000

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refurbishing, according to its manufacturer, K-Pack.

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No. 473 at BMO 89-90 (Declaration of Michael M. Carlson, Exh. B).

25

Even without any refurbishment, the Drum Line in its dismantled

26

state would still sell for “scrap.”10

BMO

Moreover, once restored and made

Bankr. ECF

In addition, the evidence

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10

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While CVS apparently equates “scrap” with “worthless,” nothing
in the evidence indicates that the scrap value of the Drum Line
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1

shows that whatever value the Drum Line has as “scrap,” its value

2

was higher just before it was transferred and shipped to New

3

Zealand.

4

value of the Drum Line was due to “shipping damage.”

5

BMO 100.

6

The manufacturer stated that part of the decrease in
Id., at

CVS relies on the declarations of F. Scott Salyer and Cary

7

Collins as evidence that the Drum Line was “lack[ing] in value.”

8

However, both declarations were given on April 4, 2013 (ER 189 &

9

202), after the Bankruptcy Court granted the summary judgment

10

motion.

They were not part of the record before the Bankruptcy

11

Court.

Moreover, CVS has not identified anywhere in the record

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actually before the Bankruptcy Court, where the assertions made

13

by Salyer and Collins could be found.

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that the Bankruptcy Court had an obligation to examine the record

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in search of genuine factual disputes, CVS has not, even now,

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identified any such facts in the record.11

17

Even if CVS is correct

Accordingly, BMO has met its burden of showing that the Drum

18

Line, having some value, was transferred to CVS for a bogus,

19

worthless, unsecured promissory note.

20

2.

21

SK Foods was insolvent.

BMO’s remaining burden is to show that SK Foods was

22

insolvent on the date the Drum Line was transferred to CVS.

23

met its burden through the declaration of Shondale Seymour, the

24

CFO of SK Foods, who testified, among other things, that “By

25

is zero.

26
27

11

BMO

In any event, neither self-serving declaration establishes that
the Drum Line had no value. At best, they can be read to say
that the Drum Line was worth its scrap value.

28
16

1

March 2008, it was obvious that SK Foods was insolvent.”

2

ECF No. 473 at ¶ 13.

3

Bankr.

CVS has identified no evidence in the record before the

4

Bankruptcy Court to put this fact in dispute.

5

points to its September 25, 2009 legal brief, which, it says,

6

argues that Seymour is untrustworthy.

7

CVS’s brief are not “evidence,” and cannot overcome the

8

evidentiary showing the BMO has made on this issue.

9

C.

10

Instead, CVS

However, arguments made in

Judgment for $1.5 million.

The Complaint seeks a judgment “for the fair market value of

11

the Drum Line plus pre-judgment interest.”

12

on the manufacturer’s assertion of value (ECF No. 10-1 at 202),

13

the Bankruptcy Judge granted BMO a judgment for $1.5 million.

14

ER 7 ¶ 39.

Relying

Plaintiff objects to the $1.5 million valuation because it

15

conflicts with the “sale” price of $350,000 as stated on the

16

promissory note.

17

point of the adversary proceeding, as established by BMO, is that

18

the promissory note was worthless, an instrument of the

19

fraudulent transfer; there is no basis for relying upon it as the

20

true valuation of the Drum Line.

21

$1.5 million, after refurbishment, is enough to base the judgment

22

upon.

Plaintiff’s argument is absurd.

23
24

The whole

The manufacturer’s valuation of

V. CONCLUSION
CVS failed to do what was required to oppose BMO’s motion

25

for summary judgment.

26

represented by counsel and had the opportunity to oppose, seek a

27

continuance, or request leave to file a late opposition.

28

Bankruptcy Court accordingly did not abuse its discretion in

It sat on its hands when it was

17

The

1

failing to grant CVS a continuance sua sponte.

2

summary judgment motion before the Bankruptcy Judge was

3

meritorious, and no evidence in the record before the Bankruptcy

4

Court put any material fact genuinely in dispute.

5
6

Moreover, BMO’s

Accordingly, the judgment of the Bankruptcy Court, granting
summary judgment to BMO, is hereby AFFIRMED.

7

IT IS SO ORDERED.

8

DATED:

November 22, 2013.

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