466 B.R. 492
Bankr. C.D. Cal.2012Background
- Debtor Hassen Imports Partnership owns ten California properties and leases seven to WCM and WCF.
- City seeks a determination that Debtor's holdings constitute a 'single asset real estate' under §101(51B).
- Debtor argues properties are not a single project because non-contiguous, separately used properties exist and uses are not unified.
- CorePointe loans secured by multiple properties and interrelated financing are discussed as potential evidence of a single project.
- Properties are in Covina and West Covina; some are used for dealerships, others are vacant or leased for non-dealership purposes.
- Court held evidentiary hearings; after briefing, denied the City’s motion that the Debtor constitutes a single asset real estate entity.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Do the Debtor's properties constitute a single project under §101(51B)? | City: properties are jointly used to support WCM/WCF dealership operations. | Hassen: no single project; properties are used independently and are not all essential to a unified scheme. | No single project; properties not jointly used as a single asset. |
| Is there a common plan or scheme linking the properties in Debtor's operation? | City: interrelated ownership, financing, insurance, and leases show a common plan to support dealerships. | Debtor: no cohesive common scheme; some properties are unused or destined for future redevelopment; intercompany relationships are not enough. | No proven common plan or scheme linking all properties. |
| Do de minimis non-use or vacant properties affect the single project analysis? | City: non-use is de minimis given overall portfolio and development plans. | Debtor: non-use defeats the unitary project; language of §101(51B) requires actual current common use. | De minimis non-use argument rejected; but still no single project found due to lack of current common use. |
Key Cases Cited
- In re The McGreals, 201 B.R. 736 (Bankr.E.D.Penn.1996) (common plan required; mere ownership or proximity insufficient for single project)
- In re Meeks, 349 B.R. 19 (Bankr.E.D.Cal.2006) (moving party bears burden on § 101(51B) factors)