Minesen Company, The v. Army Morale, Welfare, and Recreation Fund et al
Filing
34
ORDER DISMISSING APPEALS FROM THE BANKRUPTCY COURT'S MEMORANDUM OF DECISION REGARDING ASSUMPTION EXECUTORY CONTRACTS AND LEASES re 1 , 5 , 6 - Signed by JUDGE LESLIE E. KOBAYASHI on 2/27/2023. The Clerk's Office is DIRECTED to close this case on March 14, 2023, unless a timely motion for reconsideration of the instant Order is filed. (eta)
Case 1:21-cv-00478-LEK-WRP Document 34 Filed 02/27/23 Page 1 of 20
PageID.3680
UNITED STATES DISTRICT COURT
DISTRICT OF HAWAII
THE MINESEN COMPANY,
CIV. NO. 21-00478 LEK-WRP
Debtor/Appellant/
Cross-Appellee,
vs.
ARMY MORALE, WELFARE, AND
RECREATION FUND,
Creditor/Appellee/
Cross-Appellant,
and
PANGOLIN LLC,
Creditor/Party-inInterest/Appellee/
Cross-Appellant.
ORDER DISMISSING APPEALS FROM THE BANKRUPTCY COURT’S MEMORANDUM
OF DECISION REGARDING ASSUMPTION EXECUTORY CONTRACTS AND LEASES
On November 17, 2021, the bankruptcy court issued its
Memorandum of Decision Regarding Assumption of Executory
Contracts and Leases (“11/17/21 Decision”) in In re the Minesen
Company, Case No. 19-00849 (“BK 19-849” or “the Bankruptcy
Case”).
[BK 19-849, 11/17/21 Decision, filed 11/17/21 (dkt.
no. 505).1]
The bankruptcy court issued the 11/17/21 Decision
The 11/17/21 Decision is also available as Appendix 1 in
Debtor-Appellant the Minesen Company’s Appendix (Excerpts of
Records) to Opening Brief (Appendices “1” - “51”) (“Minesen
Appendix”). [Minesen Appendix 1, filed 2/7/22 (dkt. no. 12-1).]
1
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PageID.3681
after an evidentiary hearing held on June 2, 3, and 7, 2021,
July 28 and 29, 2021, and August 2, 4, 12, 18, and 19, 2021.
[Minesen App’x 1 (11/17/21 Decision) at PageID.258.]
On December 2, 2021, the bankruptcy court transmitted
Debtor-Appellant The Minesen Company’s (“Minesen”) notice of
appeal of the 11/17/21 Decision (“Appeal”).
[Notice of
Transmittal to District Court, filed 12/2/21 (dkt. no. 1)
(“Minesen Transmittal Notice”).]
On December 15, 2021, the
bankruptcy court transmitted: Creditor-Appellee/Cross-Appellant
Army Morale, Welfare, and Recreation Fund’s (“MWR”) notice of
cross-appeal of the 11/17/21 Decision (“MWR Cross-Appeal”); and
Creditor/Party-in-Interest/Cross-Appellant Pangolin LLC’s
(“Pangolin”) notice of cross-appeal of the 11/17/21 Decision
(“Pangolin Cross-Appeal”).
[Transmittal of Documents for
Pending Appeal, filed 12/15/21 (dkt. no. 5) (“MWR Transmittal
Notice”); Transmittal of Documents for Pending Appeal, filed
12/15/21 (dkt. no. 6) (“Pangolin Transmittal Notice”).]
Minesen filed its Opening Brief on February 7, 2022
(“Minesen Brief”).
[Dkt. no. 11.]
Pangolin filed its Combined
Responsive Brief in the Appeal and Opening Brief in Cross-Appeal
(“Pangolin Brief”) on March 7, 2022, and MWR filed the CreditorAppellee’s Responsive/Cross-Appellant’s Opening Brief (“MWR
Brief”) on March 21, 2022.
[Dkt. nos. 20, 21.]
Minesen filed
its Combined Reply Brief and Answering Brief on May 5, 2022
2
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PageID.3682
(“Minesen Response Brief”), and Pangolin filed a joinder in the
Minesen Response Brief on May 9, 2022.
[Dkt. nos. 24, 25.]
On
May 19, 2022, MWR filed the Creditor Appellee’s
Responsive/Cross-Appellant’s Reply Brief (“MWR Response Brief”).
[Dkt. no. 26.]
The Court finds these matters suitable for disposition
without a hearing pursuant to Rule LR7.1(c) of the Local Rules
of Practice for the United States District Court for the
District of Hawaii (“Local Rules”).
For the reasons set forth
below, Minesen’s Appeal, the MWR Cross-Appeal, and the Pangolin
Cross-Appeal are dismissed for lack of appellate jurisdiction.
BACKGROUND
The Bankruptcy Case is the Chapter 11 proceeding
initiated by Minesen on July 4, 2019.
See Minesen Transmittal
Notice, dkt. no. 1-3 (docket sheet for BK 19-849); see also
BK 19-849, Voluntary Petition for Non-Individuals Filing for
Bankruptcy, filed 7/4/19 (dkt. no. 1).
At the time of the 11/17/21 Decision, Minesen was
operating the Inn at Schofield Barracks (“the Inn”), which is a
hotel located on the United States Army’s (“the Army”) Schofield
Barracks installation.
at PageID.258.
See Minesen App’x 1 (11/17/21 Decision)
In connection with its operation of the Inn,
Minesen entered into the following agreements:
3
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PageID.3683
1.
Contract No. NAFBA3-93-C-001 between Minesen
and US Army Morale, Welfare and Recreation
Fund, a Non-Appropriated Fund
Instrumentality, dated January 14, 1993 (the
“MWR Contract”);
2.
Amendment/Modification No. P00018 to the MWR
Contract, dated April 18, 2017 (the “MWR
Contract Modification”);
3.
Lease No. DACA84-1-91-14 between the United
States of America through the Secretary of
the Army, as lessor, and Minesen, as lessee,
dated February 1, 1993 (the “Lease”);
4.
Lease No. DACA84-1-17-121, between the
Secretary of the Army, as lessor, and
Minesen, as lessee (the “Picnic Area
Lease”); and
5.
Memorandum of Agreement between the 25th
Infantry Division (Light)/US Army Garrison
Hawaii; US Army Community and Family Support
Center; and Minesen, effective May 11, 1994
(the “Operating Agreement”).
[Id. at PageID.257 (emphases and citations omitted).]
These
agreements will be referred to collectively as “the Contracts.”
Minesen is both the debtor and the debtor-in-possession and, as
the debtor-in-possession, Minesen filed a motion to assume the
Contracts, pursuant to 11 U.S.C. § 365.2
2
See Minesen App’x 1
Section 365(d)(2) states:
In a case under chapter 9, 11, 12, or 13 of this
title, the trustee may assume or reject an
executory contract or unexpired lease of
residential real property or of personal property
of the debtor at any time before the confirmation
of a plan but the court, on the request of any
party to such contract or lease, may order the
(. . . continued)
4
Case 1:21-cv-00478-LEK-WRP Document 34 Filed 02/27/23 Page 5 of 20
PageID.3684
(11/17/21 Decision) at PageID.256 & n.1; see also BK 19-849,
Minesen’s Motion for Order Authorizing Assumption of Executory
Contracts and Leases, filed 10/21/19 (dkt. no. 100) (“Assumption
Motion”).
Section 365(b)(1) contains certain requirements that
must be met prior to the assumption of a debtor’s executory
contract or unexpired lease that has been in default.
Further,
§ 365(c)(1) sets forth certain circumstances under which a
debtor’s executory contract or unexpired lease cannot be
assumed.
Under § 365, MWR had the burden to establish any
material defaults in the Contracts and that proper notice of the
defaults was given.
If MWR carried its burden, the burden
shifted to Minesen to establish that: it either had already
cured the defaults or would cure the defaults promptly; and
there was adequate assurance of Minesen’s future performance.
See Minesen App’x 1 (11/17/21 Decision) at PageID.259-63
(summarizing the applicable legal standards).
The bankruptcy court found that Minesen was in default
under the Contracts because of the following material breaches:
failing to pay its electric bills, leaving an outstanding amount
trustee to determine within a specified period of
time whether to assume or reject such contract or
lease.
Under 11 U.S.C. § 1107(a), a debtor-in-possession has the power
of a trustee for purposes of § 365. See Minesen App’x 1
(11/17/21 Decision) at PageID.260.
5
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PageID.3685
of $561,538.89 through June 2021; [id. at PageID.277;] selling
distilled spirits at the Inn; [id. at PageID.279;] selling beer
and wine, without a liquor license, at the Inn; [id. at
PageID.282;] failing to obtain MWR’s consent before entering
into a subrogation transaction with Pangolin3 that the bankruptcy
court found constituted a refinancing of Minesen’s loan from
First Hawaiian Bank (“FHB”), which was a loan that MWR had
previously consented to; [id. at PageID.288-89;] failing to make
required deposits in its replacement reserve account (“RRA”);4
[id. at PageID.289-90;] and charging guests $1,097,438.95 more
than the approved room rates, in addition to charging guests
“$9,027 in excess of the maximum lodging portion of the
transient lodging allowance,” [id. at PageID.294].
However, the
bankruptcy court found that, even after curing these defaults,
Minesen was “likely [to] generate substantial . . . profits from
operating the Inn during the remaining term of the MWR
Contract.”
[Id. at PageID.297-98.}
Thus, the bankruptcy court
found that Minesen’s proposed assumption of the Contracts was a
At the time of the 11/17/21 Decision, Pangolin managed the
Inn, pursuant to a contract with Minesen. See Minesen App’x 1
(11/17/21 Decision) at PageID.284. “Pangolin is wholly owned by
Max Jensen, who also owns 95% of Minesen’s stock.” [Id.]
3
The bankruptcy court did not make any findings as to the
specific amount of the total shortfall in the RRA account
because MWR only timely submitted evidence of one year - 2018,
when the shortfall was $397,564.52. See Minesen App’x 1
(11/17/21 Decision) at PageID.292.
4
6
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PageID.3686
reasonable exercise of business judgment and was in the
bankruptcy estate’s best interest.
[Id. at PageID.297.]
As part of the business judgment analysis, the
bankruptcy court ruled that the Inn is not “government quarters”
under the current Joint Travel Regulations (“JTR”).
PageID.297-306.]
[Id. at
Thus, an official military traveler was no
longer required to obtain a statement of nonavailability (“SNA”)
from the Inn in order to obtain full reimbursement for a stay at
another accommodation.
See id. at PageID.299-300 (describing
the practice under the prior version of the Joint Federal Travel
Regulations, and describing the legal challenge to the 1997
change to the regulation).
The bankruptcy court ruled that Minesen was required
to:
-immediately pay its outstanding electricity bills;
-immediately cease all sales of alcoholic beverages, unless
Minesen received the permissions required under the
Contracts and either a liquor license from the Honolulu
Liquor Commission or a written statement by the commission
that it does not require a license;
-provide all reports, or objections to the requirement of
specific reports, within twenty-eight days after MWR
provided Minesen with a list of all outstanding or
noncompliant reports;
-within twenty-eight days after MWR provided Minesen with a
statement of all funds that MWR asserts Minesen is required
to deposit to the RRA, deposit any portion of the claimed
amount that is undisputed and file a statement identifying
any portion of the amount that is disputed; and
7
Case 1:21-cv-00478-LEK-WRP Document 34 Filed 02/27/23 Page 8 of 20
PageID.3687
-immediately pay to MWR the $1,097,438.95 in room overcharges
and take reasonable steps to refund to guests charges that
exceeded the maximum lodging portion of the transient
lodging allowance.
[Id. at PageID.307-10.]
In addition, Pangolin was required to
“immediately release (or convert to equity) all claims against
Minesen arising out of its repayment of the First Hawaiian Bank
loan.”
[Id. at PageID.308-09.]
These will be referred to
collectively as “the Required Cures.”
The bankruptcy court found that Minesen was
financially able to perform under the Contracts and, if Minesen
made the cure payments required in the 11/17/21 Decision, it
would constitute adequate assurance of Minesen’s future
performance.
[Id. at PageID.310-11.]
Minesen’s Assumption
Motion was granted, conditioned upon the completion of the
Required Cures, and the bankruptcy court set a January 24, 2022
hearing regarding the status of cures.
I.
[Id. at PageID.311-12.]
Minesen’s Appeal
Minesen argues: it was not required to deposit four
percent of its annual revenues in the RRA because it spent more
than that amount each year on the type of work on the Inn that
the RRA was intended to pay for; MWR should have been barred
from asserting defaults for which it did not give Minesen prepetition notice; the bankruptcy court erred in ruling that
Minesen’s sale of alcoholic beverages without a liquor license
8
Case 1:21-cv-00478-LEK-WRP Document 34 Filed 02/27/23 Page 9 of 20
PageID.3688
constitutes a default; the bankruptcy court erred in concluding
that an official military traveler does not need a SNA from the
Inn to obtain maximum reimbursement at another hotel; the
bankruptcy court erred in concluding that the Inn is not
“government quarters” under the current JTR; the bankruptcy
court erred when it made Pangolin’s release or conversion to
equity of its claims against Minesen related to the FHB loan one
of the Required Cures; the bankruptcy court erred when it
ordered Minesen to pay the $1,097,438.95 in room overcharges to
MWR; and the bankruptcy court should not have allowed MWR to
submit post-decision evidence about the purported under-funding
of the RRA because MWR failed to produce timely evidence prior
to the evidentiary hearing.
II.
Pangolin Appeal
Pangolin argues its repayment of Minesen’s FBH loan
and the resulting subrogation agreement between Minesen and
Pangolin did not constitute a refinancing under the MWR
Contract.
Further, even if there was a refinancing without
MWR’s consent, the bankruptcy court erred in ruling that the
necessary cure was for Pangolin to release or convert to equity
its claims against Minesen arising from Pangolin’s repayment of
Minesen’s FHB loan.
9
Case 1:21-cv-00478-LEK-WRP Document 34 Filed 02/27/23 Page 10 of 20
PageID.3689
III. MWR Appeal
MWR argues that, under § 365(c)(1), Minesen could not
assume the Contracts because MWR did not waive the rights under
the Anti-Assignment Act of 41 U.S.C. § 6305.5
Further, the
bankruptcy court erred in concluding that Minesen’s assumption
of the Contracts was proper because MWR argues Minesen cannot
cure its non-monetary defaults and Minesen cannot provide
adequate assurance of its future performance of its obligations
under the Contracts.
IV.
Further Proceedings in BK 19-849
While the appeals in the instant case were pending,
MWR informally suggested that the oral argument on the appeals
before this Court be delayed until the bankruptcy court resolved
two pending matters.
See Minute Order - EO: Court Order
Vacating the Oral Argument Scheduled for October 7, 2022 and
Directing the Parties to File Position Statements Regarding the
5
Section 6305(a) states:
The party to whom the Federal Government gives a
contract or order may not transfer the contract
or order, or any interest in the contract or
order, to another party. A purported transfer in
violation of this subsection annuls the contract
or order so far as the Federal Government is
concerned, except that all rights of action for
breach of contract are reserved to the Federal
Government.
10
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PageID.3690
Effect of the Matters Taken Under Advisement by the Bankruptcy
Court on September 12, 2022, filed 9/26/22 (dkt. no. 29), at
PageID.3624.
The first matter was MWR’s motion seeking the
appointment of a trustee over Minesen’s bankruptcy estate, filed
on June 23, 2022.
[BK 19-849, Motion to Appoint Chapter 11
Trustee, filed 6/23/22 (dkt. no. 640) (“Appointment Motion”).]
MWR argues the Appointment Motion was necessary because Minesen
failed to complete the Required Cures and Minesen also committed
other defaults.
[MWR’s Position Statement Pursuant to Court’s
Order [Doc. No. 29], filed 10/6/22 (dkt. no. 30) (“MWR
Statement”), at 4-5.]
Minesen asserts that, although it
believes there are errors in the 11/17/21 Decision, it has taken
steps to comply with some aspects of the decision.
[Minesen’s
Position Statement in Response to Court’s Minute Order, filed
10/11/22 (dkt. no. 31) (“Minesen Statement”),6 at 2.]
The bankruptcy court held a hearing on the Appointment
Motion on August 1, 2022, but the hearing was continued so that
the motion could be heard together with the hearing on the
confirmation of Minesen’s Second Amended Plan of Reorganization
of the Debtor Pursuant to Chapter 11 of the Bankruptcy Code
Pangolin filed a joinder in the Minesen Statement on
October 12, 2022. [Dkt. no. 32.]
6
11
Case 1:21-cv-00478-LEK-WRP Document 34 Filed 02/27/23 Page 12 of 20
(“Second Amended Plan”).7
PageID.3691
See BK 19-849, Minutes for hearing
held 08/01/2022, filed 8/1/22 (dkt. no. 713); see also id.,
Second Amended Plan, filed 8/1/22 (dkt. no. 710).
The bankruptcy court held a hearing on September 12,
2022, and both the Appointment Motion and the confirmation of
the Second Amended Plan were taken under advisement.
See
BK 19-849, Minutes for hearing held 09/12/2022, filed 9/12/22
(dkt. no. 745).
The bankruptcy court subsequently granted MWR’s
Appointment Motion and approved Dane Field as the trustee of
Minesen’s bankruptcy estate (“the Trustee”).
See id., Order
Granting Motion to Appoint a Trustee, filed 10/3/22 (dkt.
no. 755) (“Appointment Order”); Order Approving Appointment of
Trustee, filed 10/12/22 (dkt. no. 767).
Minesen argues MWR’s
Appointment Motion was granted for reasons other than the ones
that MWR cited in the motion.
[Minesen’s Position Statement at
2.]
The bankruptcy court scheduled a further hearing on
the Second Amended Plan for January 30, 2023.
See BK 19-849,
Notice of Hearing, filed 10/3/22 (dkt. no. 756).
was later continued to April 3, 2023.
filed 1/20/23 (dkt. no. 820).
The hearing
See id., Clerk’s Notice,
MWR has objected to the
The confirmation of the Second Amended Plan is the second
matter that MWR suggests warrants a continuance of the oral
argument on the appeals before this Court.
7
12
Case 1:21-cv-00478-LEK-WRP Document 34 Filed 02/27/23 Page 13 of 20
confirmation of Minesen’s Second Amended Plan.
PageID.3692
See id., MWR’s
Objection to the Minesen Company’s Amended Plan of
Reorganization of the Debtor Pursuant to Chapter 11 of the
Bankruptcy Code [Dkt. No. 710], filed 8/29/22 (dkt. no. 734).
MWR points out that the three arguments it has raised
in its objections to the confirmation of the Second Amended Plan
are also raised in the MWR Cross-Appeal.
7.]
[MWR Statement at 6-
MWR argues that, with the Trustee’s involvement, the plan
may be reshaped and, if the parties can reach an agreement
regarding Minesen’s reorganization, the instant appeals may
become moot.
[Id. at 7.]
However, MWR states that, if the
bankruptcy court confirms the Second Amended Plan, MWR “may file
an emergency motion to stay pending appeal and seek leave to
amend its cross-appeal briefing to both supplement the record as
to the previously raised arguments and to oppose plan
confirmation on the grounds not yet before this Court.”
[Id.]
Minesen represents that the Second Amended Plan
complies with all of the Required Cures in the 11/17/21
Decision.
See Minesen Statement at 3.
DISCUSSION
At the outset, the Court notes that each of the
parties has recognized a jurisdictional issue.
Both MWR and
Minesen point out that the 11/17/21 Decision was not intended to
be a final order.
See MWR Statement at 2-3 (citing MWR
13
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PageID.3693
Statement, Exh. 1 at 19:6-12);8 Minesen Statement at 7 (same).
The MWR Brief alluded to the possible lack of jurisdiction over
Minesen’s Appeal because the 11/17/21 Decision is not a final
judgment or order, and MWR stated that, in filing the MWR CrossAppeal and responding to Minesen’s Appeal, MWR “does not waive
its rights to seek dismissal of this appeal for lack of
jurisdiction.”
[MWR Brief at 4 & n.1.]
Pangolin noted “there
is some indication that the [11/17/21] Decision may be an
interlocutory order, and is being treated as such by the
Bankruptcy Court.”
[Pangolin Brief at 1.]
In response to the
MWR Brief and the Pangolin Brief, Minesen also acknowledged that
the bankruptcy court expressed doubts about whether the 11/17/21
Decision was an appealable final order and that the subsequent
developments in BK 19-849 “may significantly impact the issues
presented in this appeal.”
[Minesen Response Brief at 1.]
Minesen therefore “reserve[d] the right to seek dismissal of
this appeal for lack of jurisdiction or on any other applicable
grounds.”
[Id.]
Exhibit 1 to the MWR Statement is the Transcript of Motion
for Relief from Memorandum Decision Hearing, held on June 13,
2022 in BK 19-849 (“6/13/22 Trans.”). [Dkt. no. 30-1.] The
hearing addressed MWR’s motion seeking relief from the 11/17/21
Decision. See BK 19-849, MWR’s Motion for Relief from the
Court’s Memorandum of Decision [Dkt. No. 505], filed 4/29/22
(dkt. no. 596) (“Motion for Relief from Decision”).
8
14
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PageID.3694
No party has filed a motion to dismiss for lack of
jurisdiction.
Nevertheless, this Court must sua sponte
determine whether subject matter jurisdiction exits.
See
Arbaugh v. Y&H Corp., 546 U.S. 500, 514 (2006) (stating that,
because subject-matter jurisdiction “involves a court’s power to
hear a case,” the federal courts “have an independent obligation
to determine whether subject-matter jurisdiction exists, even in
the absence of a challenge from any party” (quotation marks and
citations omitted)).
Minesen originally argued that appellate jurisdiction
under 28 U.S.C. § 158(a)9 was proper because the 11/17/21
Decision was a final order approving the assumption of executory
contracts.
See Minesen Brief at 3-4 (citing In re Victoria
Station Inc., 875 F.2d 1380, 1382 (9th Cir. 1989)).
In that
case, the Ninth Circuit stated: “A final order addressing the
assumption of a lease pursuant to section 365(d)(4) is
reviewable as a separate and discrete matter.”
In re Victoria
28 U.S.C. § 158(a) states, in relevant part: “The district
courts of the United States shall have jurisdiction to hear
appeals (1) from final judgments, orders, and decrees; . . . of
bankruptcy judges entered in cases and proceedings referred to
the bankruptcy judges under section 157 of this title.”
9
15
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PageID.3695
Station Inc., 875 F.2d 1380, 1382 (9th Cir. 1989) (citing In re
Victoria Station, Inc., 840 F.2d 682, 683–84 (9th Cir. 1988)).10
In Victoria Station II, the bankruptcy court approved
the assumption and assignment of the lease on property owned by
Willamette Waterfront, Ltd. (“Willamette”), and the Bankruptcy
Appellate Panel (“BAP”) affirmed the bankruptcy court’s order.
875 F.2d at 1381-82.
The Ninth Circuit affirmed.
Id. at 1386.
There is no indication in Victoria Station II that the order
approving the assumption of the Willamette lease was
conditional, like the 11/17/21 Decision is.
Victoria Station I is also instructive.
In that case,
the Ninth Circuit held that it had jurisdiction over the BAP’s
order determining that the debtor’s motion to assume the lease
with lessor Robert Turgeon (“Turgeon”) was untimely because the
order decided a discrete issue.
683-84.
Victoria Station I, 840 F.2d at
The bankruptcy court ruled that the Turgeon lease was
automatically rejected because of the untimely filing of the
debtor’s motion to assume the lease.
The BAP reversed the
decision, ruling that the debtor’s motion was timely under
§ 365(d)(4).
Victoria Station I, 840 F.2d at 683.
875 F.2d 1380 will be referred to as “Victoria
Station II,” and 840 F.2d 682 will be referred to as “Victoria
Station I.”
10
16
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PageID.3696
Similarly, In re Arizona Appetito’s Stores, Inc.
(“Appetito”) involved a Chapter 11 debtor-in-possession’s motion
to amend its prior motion to reject a ground lease and to allow
it to assume the lease.
893 F.2d 216, 217 (9th Cir. 1990).
The
bankruptcy court deemed the ground lease rejected because the
motion to amend was untimely, and the district court affirmed
the bankruptcy court’s decision.
Id. at 217-18.
The Ninth
Circuit cited Victoria Station I when noting that the district
court had jurisdiction to review the bankruptcy court’s order.
Id. at 218 (citing In re Victoria Station, Inc., 840 F.2d 682,
684 (9th Cir. 1988)).
Victoria Station I and Appetito do not support the
existence of jurisdiction over the appeals from the 11/17/21
Decision in the instant case.
“Both of those cases . . .
involved appellate review of denials of motions to assume as
untimely.
Thus, absent appellate review, the parties’
respective rights regarding their leases were fully resolved the leases were deemed rejected.”
In re Treasure Isles HC,
Inc., 462 B.R. 645, 647 (B.A.P. 6th Cir. 2011) (emphasis in
original).
That is not the case with the 11/17/21 Decision.
The bankruptcy court conditionally granted Minesen’s Assumption
Motion, contingent upon the completion of the Required Cures,
and the bankruptcy court set a further hearing “to address the
status of Minesen’s cure.”
[Minesen App’x 1 (11/17/21 Decision)
17
Case 1:21-cv-00478-LEK-WRP Document 34 Filed 02/27/23 Page 18 of 20
at PageID.311-12.]
PageID.3697
This Court therefore concludes that the
11/17/21 Decision is not a final order or decree.
The bankruptcy court’s post-appeal statements about
the 11/17/21 Decision and the post-appeal proceedings in
BK 19-849 also support this Court’s conclusion.
During the
June 13, 2022 hearing on MWR’s Motion for Relief from Decision,
the bankruptcy court stated:
. . . Well, the first question in my mind
has to be my own jurisdiction. I don’t think the
notice of appeal, or the notices of appeal
changed my jurisdiction because I certainly
didn’t intend for the memorandum decision to be
an appealable final judgment. It left a lot of
issues open for further decision. So it wasn’t
intended to wrap up all the issues related to the
assumption or rejection of this contract.
So I think I can go forward without regard
to the appeal. Even if the order were final, I
think I still have jurisdiction to enforce that
order, and that’s essentially what’s been going
on all this time. Getting the cures handled, to
the extent they could be handled, and that’s sort
of what the order was intended to do to get -- to
see if the defaults could be cured and, if so,
allow assumption of the contract.
[MWR Statement, Exh. 1 (6/13/22 Trans.) at 19 (emphases added).]
The bankruptcy court’s statements indicate that the granting of
the Assumption Motion would not become a final ruling until the
Required Cures were completed.
That had not been done by the
time that the instant appeals were taken.
Further, MWR’s April 29, 2022 Motion for Relief from
Decision sought reconsideration of, and relief from, the
18
Case 1:21-cv-00478-LEK-WRP Document 34 Filed 02/27/23 Page 19 of 20
11/17/21 Decision.
Decision at 10.
PageID.3698
See BK 19-849, Motion for Relief from
In that motion, MWR acknowledged that, since
the 11/17/21 Decision was issued, “the parties have discussed
Minesen’s progress towards compliance with the Court during
three status conferences held on January 24, 2022, March 7, and
March 28.”
[Id. at 2.]
These subsequent proceedings also
indicate that neither the parties nor the bankruptcy court
treated the 11/17/21 Decision as a final order or decree.
Because the bankruptcy court’s 11/17/21 Decision was
not a final judgment, order, or decree, the parties’ appeals
must be dismissed because this Court lacks subject matter
jurisdiction over them.
See 28 U.S.C. § 158(a)(1).
This Court
makes no findings or conclusions regarding the merits of the
appeals.
CONCLUSION
For the foregoing reasons, Minesen’s appeal from the
bankruptcy court’s November 17, 2021 Memorandum of Decision
Regarding Assumption of Executory Contracts and Leases,
transmitted on December 2, 2021, and MWR’s and Pangolin’s
respective cross-appeals from the 11/17/21 Decision, both
transmitted on December 15, 2021, are HEREBY DISMISSED.
The
Clerk’s Office is DIRECTED to close this case on March 14, 2023,
unless a timely motion for reconsideration of the instant Order
is filed.
19
Case 1:21-cv-00478-LEK-WRP Document 34 Filed 02/27/23 Page 20 of 20
PageID.3699
IT IS SO ORDERED.
DATED AT HONOLULU, HAWAII, February 27, 2023.
THE MINESEN COMPANY VS. ARMY MORALE, WELFARE, AND RECREATION
FUND, ET AL.; CIV. NO. 21-00478 LEK-WRP; ORDER DISMISSING
APPEALS FROM THE BANKRUPTCY COURT’S MEMORANDUM OF DECISION
REGARDING ASSUMPTION EXECUTORY CONTRACTS AND LEASES
20
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