In re: Ramin Pourteymour, SC-22-1008-GFB SC-22-1009-GFB SC-22-1010-GFB

Background

Debtor Ramin Pourteymour owned two primary La Jolla properties ("Blackgold" and "Box Canyon") financed by three loans from First Foundation Bank (FFB); following lost rental income he stopped payments and filed Chapter 11 in Nov. 2020.
The parties litigated valuation; FFB obtained relief from stay and foreclosed on Blackgold, acquiring title via credit bid of its junior lien.
After foreclosure FFB moved to compel Debtor to account for and turn over rents from Blackgold and to compel rejection of an alleged postpetition lease; Debtor opposed and then moved to dismiss under § 1112(b), proposing to pay many creditors from non‑estate funds upon dismissal.
The bankruptcy court found cause to dismiss (loss of Blackgold materially impaired reorganization), rejected Debtor’s proposed structured dismissals as potentially violating Jevic, and concluded dismissal (not conversion) was in creditors’ and the estate’s best interests; it entered a straight dismissal under § 349 and denied FFB’s motions as moot.
FFB appealed, arguing the dismissal was in substance a prohibited structured dismissal because it relied on Debtor’s pledge to pay some unsecured creditors and thereby deviated from the Code’s priority scheme.

Issues

Issue	Plaintiff's Argument (FFB)	Defendant's Argument (Debtor)	Held
Whether the Dismissal Order violated Jevic by effectuating a structured dismissal that departs from Bankruptcy Code priority	Dismissal was conditioned on payments to some unsecured creditors (implied or in substance), creating an impermissible structured dismissal	Order is a straight dismissal under § 349; any post‑dismissal payments are voluntary/non‑court‑imposed	Dismissal did not violate Jevic; the written order was a straight dismissal and did not condition dismissal on payments
Whether the bankruptcy court abused its discretion in dismissing rather than converting under § 1112(b)	Dismissal improperly relied on Debtor’s pledge to pay creditors and thus was substantively defective	Loss of Blackgold made reorganization infeasible; dismissal (over conversion) best served creditors and estate given facts	No abuse of discretion: court found cause and properly balanced conversion vs. dismissal factors, choosing dismissal
Whether Debtor’s statements or conduct converted the straight dismissal into an implied structured dismissal	Debtor’s post‑dismissal conduct and court comments show payments were required or relied upon, creating an implied condition	Oral remarks and Debtor’s promises do not alter the written dismissal order; written order controls	Court’s oral comments do not override the written order; no implied conditioning on payments was found
Whether FFB was entitled to relief compelling turnover of rents or rejection of a postpetition lease	FFB asserted entitlement to accumulated rents (§ 542) and voidability of the lease (§ 549/§ 365)	Debtor argued FFB lacked standing to invoke those remedies and that dismissal revested estate property to him	Motions were moot after dismissal; court correctly denied them as moot (property revested and FFB retains state‑law remedies)

Key Cases Cited

Czyzewski v. Jevic Holdings Corp., 137 S. Ct. 973 (2017) (bankruptcy court may not approve a structured dismissal that distributes estate property in a way that departs from statutory priority without affected creditors’ consent)
Law v. Siegel, 571 U.S. 415 (2014) (bankruptcy courts cannot override statutory priority rules or alter the Code’s balance)
Nash v. Kester (In re Nash), 765 F.2d 1410 (9th Cir. 1985) (dismissal revests estate property in debtor under § 349)
Rawson v. Calmar S.S. Corp., 304 F.2d 202 (9th Cir. 1962) (written findings and orders supersede trial court’s oral comments)
Sullivan v. Harnisch (In re Sullivan), 522 B.R. 604 (9th Cir. BAP 2014) (standard of review: dismissal under § 1112(b) reviewed for abuse of discretion)
Brennan v. Opus Bank, 796 F.3d 1125 (9th Cir. 2015) (mootness reviewed de novo)