Kenwood Commons, LLC et al v. Guild Investment Group, LLC

Filing 30

ORDER granting 29 Letter Motion to Adjourn Conference. Granted. The Trustee is asked to file the withdrawal/dismissal of the appeal by 5/24/24. So Ordered. (Signed by Judge Kenneth M. Karas on 5/8/24) (yv)

Case 7:23-cv-02288-KMK Document 29 Filed 05/08/24 Page 1 of 2
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KATHLEEN M . AIELLO
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May 8, 2024
BYECF
The Honorable Judge Kenneth M. Karas
United States District Court
Southern District of New York
300 Quarropas Street, Chambers 533
White Plains, New York 10601-4150
RE:

Kenwood Commons, LLC, v. Guild Investment Group, LLC (Case No. 23 CV 02288
(KMK)); On Appeal From In re Kenwood Commons, LLC, Debtor; U.S.B.C.
S.D.N.Y. (Case No. 22-35169 (SHL))

Dear Honorable Judge Karas,
We are counsel for Fred Stevens (the "Trustee" or the "Appellant"), Chapter 7 Trustee of
the estate of Kenwood Commons, LLC (the "Debtor"), which case is pending before the
Honorable Judge Sean H. Lane, in the United States Bankruptcy Court for the Southern District
of New York (the "Bankruptcy Court"). We write to the Court with regard to the abovereferenced appeal of a Bankruptcy Court decision (the "Appeal").
By way of background, the Debtor filed a bankruptcy petition under Chapter 11 of the
Bankruptcy Code on March 28, 2022 (the "Petition Date"). The Debtor continued to be a debtorin-possession, operating and maintaining its own business and property until July 7, 2023 (the
"Conversion Date"), when the Debtor' s case was converted from Chapter 11 to Chapter 7 and
Mr. Stevens was appointed as the Debtor's Chapter 7 Trustee. After the Petition Date but before
the Conversion Date, the Bankruptcy Court entered the Order Granting Application by
Prepetition Secured Lender for an Order Authorizing it to Continue State Court Foreclosure
Action in Accordance with 11 USC § 362(d)(3), dated February 7, 2023 (the "Bankruptcy
Court Order") [Bankr. Dkt. 90]. On or around February 21 , 2023 , the Debtor filed a notice of
appeal of the Bankruptcy Court Order, commencing the instant Appeal [Bankr. Dkt. 94].
According to the docket for this Appeal, it appears that both parties had fully briefed the Appeal
by June 13, 2023, prior to the Trustee ' s appointment.
Upon the request of the Trustee, the oral argument on the Appeal was adjourned from
January 11 , 2024 to March 14, 2024 and is now set for oral argument on May 13, 2024 (the
"Hearing"). The Trustee ' s adjournment requests were premised on a process undertaken by the
Trustee in the Debtor's bankruptcy case to address the disposition of the Debtor' s litigation
claims, including this Appeal. More specifically, on March 4, 2024, the Trustee filed the

Case 7:23-cv-02288-KMK Document 29 Filed 05/08/24 Page 2 of 2

Kenwood Commons, LLC v. Guild Investment Group, LLC
Case No. 23-CV-02288 (KMK)
May 8, 2024
Page -2-

Trustee 's Motion to Sell Estate 's Claims and Rights of Action, or Abandon Such Claims and
Rights of Action, and to Dismiss All Pending Adversary Proceedings without Prejudice [Bkr.
Dkt. No. 24 7] (the "Sale Motion"). In the Sale Motion, the Trustee sought, inter alia, to dismiss
the instant Appeal. The Trustee received and accepted a qualified offer to purchase the assets
along the terms set forth in the Sale Motion. On April 11, 2024, the Bankruptcy Court held a
hearing on the Trustee's Sale Motion, which was approved over objection. On April 17, 2024,
the Bankruptcy Court entered the Order Authorizing the Trustee to Sell the Estate's Right, Title,
and Interest In and to All Claims and Rights of Action Against Various Parties Pursuant to 11
USC.§ 363(b), or, if No Parties Submit Acceptable Offers to Purchase Such Claims, Approving
the Trustee 's Abandonment of All Such Claims and Any Remaining Property of the Estate
Pursuant to 11 USC. § 554(a) [Bkr. Dkt. No. 258] (the "Sale Order"). The Sale Order became
final and unappealable on May 1, 2024.
On May 2; 2024 at 12:01 a.m. (EST), the Trustee closed on the Sale' of the Estate Claims
to Guild Ventures LLC (the "Purchaser") as authorized by the Sale Order immediately upon
dissolution of the stay of the Sale Order pursuant to Fed. R. Bankr. P. 6004(h). Consequently,
the Purchaser is now the owner of all claims asserted by the Debtor or its bankruptcy estate in the
Adversary Proceedings, among others, including the claims underlying this Appeal. The Trustee
has submitted a request to the Bankruptcy Court to close all Adversary Proceedings and matters
of record related to claims now owned by the Purchaser and is awaiting entry of that Dismissal
Order.
Therefore, the Appellant respectfully requests that the Hearing be removed from the
Court's docket and hearing calendar and the Trustee will take steps to formally withdraw or
dismiss the Appeal.
We thank the Court in advance for its attention to this matter and consideration of this
request. Please contact the undersigned counsel if the Court has any questions regarding this
Appeal or the request set forth herein.
Granted. The Trustee is asked to file the
withdrawal/dismissal of the appeal by 5/24/24.

Respectfully,

Isl Kathleen Aiello
Kathleen Aiello
cc (by ECF and Email):
Fred Stevens, Chapter 7 Trustee
Joseph Moldovan, Attorney for Appellee
David Kozlowski, Attorney for Appellee
Gary D. Bressler, Counsel for United States Fire Insurance Company
Michael R. Morano, Counsel for United States Fire Insurance Company