Premier Cru Master Complaint Thread (MERGED)

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Victor Hong
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#6801 Post by Victor Hong » October 13th, 2017, 3:52 am

John Morris wrote:
Mike Miller wrote:Well, they sue you (or me) in California. Hoping for 1) a default judgment; 2) that my transactions cost in presenting my meritorious defenses, if any, exceed my settlement costs: or 3) that at the very least my defeviency claim is disallowed allowing you other guys to chop up my $0.07 recovery among the multitudes.
If you live in Texas, can they get personal jurisdiction over you in California?
I believe that the bankruptcy proceeding is in the US federal court system, thereby with jurisdiction in Texas (.....despite Texas being Texas pileon ).
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#6802 Post by Art K u o » October 24th, 2017, 5:21 pm

Mike Miller wrote:Zealously representing his client??!!
zealously representing client is not the same thing as zealously running up legal fees....
the line separating being obnoxious and sarcatic is not as thick as you think... especially on the internet.

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#6803 Post by Mike Miller » October 24th, 2017, 7:28 pm

I have privately contacted all who contacted me via PM about my response.

If any Federal practitioners, especially bankruptcy practitioners are on the board, please check me on this. Would venue on a clawback action against a non-insider for less than $12,850 be governed by 28 USC 1409(b)

28 U.S. Code § 1409 - Venue of proceedings arising under title 11 or arising in or related to cases under title 11

(a) Except as otherwise provided in subsections (b) and (d), a proceeding arising under title 11 or arising in or related to a case under title 11 may be commenced in the district court in which such case is pending.

(b) Except as provided in subsection (d) of this section, a trustee in a case under title 11 may commence a proceeding arising in or related to such case to recover a money judgment of or property worth less than $1,000 or a consumer debt of less than $15,000, or a debt (excluding a consumer debt) against a noninsider of less than $10,000, only in the district court for the district in which the defendant resides.

(c) Except as provided in subsection (b) of this section, a trustee in a case under title 11 may commence a proceeding arising in or related to such case as statutory successor to the debtor or creditors under section 541 or 544(b) of title 11in the district court for the district where the State or Federal court sits in which, under applicable nonbankruptcy venue provisions, the debtor or creditors, as the case may be, may have commenced an action on which such proceeding is based if the case under title 11 had not been commenced.

(d) A trustee may commence a proceeding arising under title 11 or arising in or related to a case under title 11 based on a claim arising after the commencement of such case from the operation of the business of the debtor only in the district court for the district where a State or Federal court sits in which, under applicable nonbankruptcy venue provisions, an action on such claim may have been brought.
(e) A proceeding arising under title 11 or arising in or related to a case under title 11, based on a claim arising after the commencement of such case from the operation of the business of the debtor, may be commenced against the representative of the estate in such case in the district court for the district where the State or Federal court sits in which the party commencing such proceeding may, under applicable nonbankruptcy venue provisions, have brought an action on such claim, or in the district court in which such case is pending.

For source of $12,850 versus $10,000, see http://bankruptcy.cooley.com/2016/02/ar ... il-1-2016/

Please PM your answers.

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#6804 Post by Don Cornwell » October 27th, 2017, 3:41 pm

Mike Miller wrote:I have privately contacted all who contacted me via PM about my response.

If any Federal practitioners, especially bankruptcy practitioners are on the board, please check me on this. Would venue on a clawback action against a non-insider for less than $12,850 be governed by 28 USC 1409(b)

28 U.S. Code § 1409 - Venue of proceedings arising under title 11 or arising in or related to cases under title 11

(a) Except as otherwise provided in subsections (b) and (d), a proceeding arising under title 11 or arising in or related to a case under title 11 may be commenced in the district court in which such case is pending.

(b) Except as provided in subsection (d) of this section, a trustee in a case under title 11 may commence a proceeding arising in or related to such case to recover a money judgment of or property worth less than $1,000 or a consumer debt of less than $15,000, or a debt (excluding a consumer debt) against a noninsider of less than $10,000, only in the district court for the district in which the defendant resides.

(c) Except as provided in subsection (b) of this section, a trustee in a case under title 11 may commence a proceeding arising in or related to such case as statutory successor to the debtor or creditors under section 541 or 544(b) of title 11in the district court for the district where the State or Federal court sits in which, under applicable nonbankruptcy venue provisions, the debtor or creditors, as the case may be, may have commenced an action on which such proceeding is based if the case under title 11 had not been commenced.

(d) A trustee may commence a proceeding arising under title 11 or arising in or related to a case under title 11 based on a claim arising after the commencement of such case from the operation of the business of the debtor only in the district court for the district where a State or Federal court sits in which, under applicable nonbankruptcy venue provisions, an action on such claim may have been brought.
(e) A proceeding arising under title 11 or arising in or related to a case under title 11, based on a claim arising after the commencement of such case from the operation of the business of the debtor, may be commenced against the representative of the estate in such case in the district court for the district where the State or Federal court sits in which the party commencing such proceeding may, under applicable nonbankruptcy venue provisions, have brought an action on such claim, or in the district court in which such case is pending.

For source of $12,850 versus $10,000, see http://bankruptcy.cooley.com/2016/02/ar ... il-1-2016/

Please PM your answers.
Mike:

I'm not a bankruptcy practitioner, I'm a litigator who has done some some preference and fraudulent transfer litigation in the Bankruptcy Court, but the answer to your question, at least in the Ninth Circuit, is YES.

In the Ninth Circuit, an action by a Bankruptcy Trustee to collect a preference claim under $12,850 must be commenced and prosecuted, pursuant to 28 USC Section 1409(b) in the Federal District Court of the district in which the defendant resides. The Ninth Circuit Bankruptcy Appellate Panel so held in a case decided in 1993 and it has never been overruled or even questioned in the Ninth Circuit. The case is In re LITTLE LAKE INDUSTRIES, INC., 158 B.R. 478, 484 (9th Cir. BAP 1993). The Bankruptcy Court case below, which was affirmed by the Ninth Circuit, is In re LITTLE LAKE INDUSTRIES, INC., 146 B.R. 463 (Bankr. N.D. Cal. 1992). Note however the discussion at the end of the Ninth Circuit case which discusses transfer of the action. Under Bankruptcy Rules 7087 and 7019, the Bankruptcy Court MAY order the case transferred to the correct judicial district. The Court also has the power to dismiss the action if the defendant files a motion challenging venue for the action pursuant to Rule 12(b)(3) of the Federal Rules of Civil Procedure.
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Premier Cru Master Complaint Thread (MERGED)

#6805 Post by David M. Jacobi » November 1st, 2017, 2:23 pm

I received via email, on Halloween no less, a love note from the firm representing the Trustee in the ongoing Fox Ortega (Premier Cru) bankruptcy. I received shipment of about $10K worth of wine (most of it ordered and in stock well before that - I foolishly was using Premier Cru to some extent as free storage!) during the 90 day window prior to the Ch. 7 filing. The Trustee has offered to settle his clawback claim for 50% of the original purchase price of the wine.

I believe this is the same 'premium' that the Court ordered certain customers to pay for wine that remained in the warehouse, paid for and tagged as ready for shipment. I know that I had a few cases of wine that were scheduled to be shipped and that Premier Cru somehow neglected to get out before the warehouse was shuttered after the Ch. 7 filing. I was able to redeem that wine and have it shipped to me by paying the Trustee some percentage of the original purchase price. Does anybody recall whether that was 50% or something less? I somehow think it was less, but the clawback letter I just received says that was the prior deal.

Has anyone done further digging to assess whether there is a reasonable basis for objection to the clawback claim? Seems to me if it is possible to resolve it for 50% or less than 50% on top of the purchase price, it's not such a bad deal. By now the retail value of the wine is higher than the original purchase price anyway, as Premier was selling quite a few things for pretty deep discounts for a number of years before it folded.

Has anyone countered the 50% offer with something less?

Thoughts anyone? I will tell you my immediate inclination is to just write a check and move on. Another thought is whether a claim made to AMEX might recoup some of the settlement amount - AMEX did refund me what was paid for wine that never materialized and could not be delivered - fortunately that was not much in my case.

You can pm me if you wish - I know it's a bit awkward airing this stuff in an open forum.

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#6806 Post by Arv R » November 2nd, 2017, 10:41 pm

I don't understand how these relatively small shipments are getting

a) put into the category of preference payments
b) treated as if they are over that 12k limit

These all seem like ordinary course of business transactions for an operating entity, not capital being extracted by owners/lenders to an enterprise....

It's amazing how Fox's shittiness hasn't gone away, even though he's rotting in jail.
R_@_0

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#6807 Post by ClarkstonMark » November 3rd, 2017, 8:55 am

David M. Jacobi wrote:I received via email, on Halloween no less, a love note from the firm representing the Trustee in the ongoing Fox Ortega (Premier Cru) bankruptcy. I received shipment of about $10K worth of wine (most of it ordered and in stock well before that - I foolishly was using Premier Cru to some extent as free storage!) during the 90 day window prior to the Ch. 7 filing. The Trustee has offered to settle his clawback claim for 50% of the original purchase price of the wine.

I believe this is the same 'premium' that the Court ordered certain customers to pay for wine that remained in the warehouse, paid for and tagged as ready for shipment. I know that I had a few cases of wine that were scheduled to be shipped and that Premier Cru somehow neglected to get out before the warehouse was shuttered after the Ch. 7 filing. I was able to redeem that wine and have it shipped to me by paying the Trustee some percentage of the original purchase price. Does anybody recall whether that was 50% or something less? I somehow think it was less, but the clawback letter I just received says that was the prior deal.

Has anyone done further digging to assess whether there is a reasonable basis for objection to the clawback claim? Seems to me if it is possible to resolve it for 50% or less than 50% on top of the purchase price, it's not such a bad deal. By now the retail value of the wine is higher than the original purchase price anyway, as Premier was selling quite a few things for pretty deep discounts for a number of years before it folded.

Has anyone countered the 50% offer with something less?

Thoughts anyone? I will tell you my immediate inclination is to just write a check and move on. Another thought is whether a claim made to AMEX might recoup some of the settlement amount - AMEX did refund me what was paid for wine that never materialized and could not be delivered - fortunately that was not much in my case.

You can pm me if you wish - I know it's a bit awkward airing this stuff in an open forum.
I would ignore any clawback email.
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#6808 Post by ClarkstonMark » November 3rd, 2017, 8:57 am

Arv R wrote:I don't understand how these relatively small shipments are getting

a) put into the category of preference payments
b) treated as if they are over that 12k limit

These all seem like ordinary course of business transactions for an operating entity, not capital being extracted by owners/lenders to an enterprise....

It's amazing how Fox's shittiness hasn't gone away, even though he's rotting in jail.
a) Maybe because wines were substituted. To me that is clearly showing preferential treatment.
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#6809 Post by David Glasser » November 3rd, 2017, 12:46 pm

My understanding is that it’s not just substitutes that are being clawed back.

And even for substitutes, that was PC's ordinary course of business for several years prior to the bankruptcy filing.

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#6810 Post by Steven Miller » November 3rd, 2017, 12:53 pm

ClarkstonMark wrote: a) Maybe because wines were substituted. To me that is clearly showing preferential treatment.
preferential to those who took action over those who did nothing?
tread lightly

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#6811 Post by Arv R » November 3rd, 2017, 1:13 pm

ClarkstonMark wrote:
David M. Jacobi wrote:I received via email, on Halloween no less, a love note from the firm representing the Trustee in the ongoing Fox Ortega (Premier Cru) bankruptcy. I received shipment of about $10K worth of wine (most of it ordered and in stock well before that - I foolishly was using Premier Cru to some extent as free storage!) during the 90 day window prior to the Ch. 7 filing. The Trustee has offered to settle his clawback claim for 50% of the original purchase price of the wine.

I believe this is the same 'premium' that the Court ordered certain customers to pay for wine that remained in the warehouse, paid for and tagged as ready for shipment. I know that I had a few cases of wine that were scheduled to be shipped and that Premier Cru somehow neglected to get out before the warehouse was shuttered after the Ch. 7 filing. I was able to redeem that wine and have it shipped to me by paying the Trustee some percentage of the original purchase price. Does anybody recall whether that was 50% or something less? I somehow think it was less, but the clawback letter I just received says that was the prior deal.

Has anyone done further digging to assess whether there is a reasonable basis for objection to the clawback claim? Seems to me if it is possible to resolve it for 50% or less than 50% on top of the purchase price, it's not such a bad deal. By now the retail value of the wine is higher than the original purchase price anyway, as Premier was selling quite a few things for pretty deep discounts for a number of years before it folded.

Has anyone countered the 50% offer with something less?

Thoughts anyone? I will tell you my immediate inclination is to just write a check and move on. Another thought is whether a claim made to AMEX might recoup some of the settlement amount - AMEX did refund me what was paid for wine that never materialized and could not be delivered - fortunately that was not much in my case.

You can pm me if you wish - I know it's a bit awkward airing this stuff in an open forum.
I would ignore any clawback email.
That too seems strange - legal notice by email. Or maybe its not really a notice and just a request, and the lawfirm is hoping to save the cost of certified letters / legal service?
R_@_0

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#6812 Post by todd waldmann » November 3rd, 2017, 1:14 pm

ClarkstonMark wrote:
David M. Jacobi wrote:I received via email, on Halloween no less, a love note from the firm representing the Trustee in the ongoing Fox Ortega (Premier Cru) bankruptcy. I received shipment of about $10K worth of wine (most of it ordered and in stock well before that - I foolishly was using Premier Cru to some extent as free storage!) during the 90 day window prior to the Ch. 7 filing. The Trustee has offered to settle his clawback claim for 50% of the original purchase price of the wine.

I believe this is the same 'premium' that the Court ordered certain customers to pay for wine that remained in the warehouse, paid for and tagged as ready for shipment. I know that I had a few cases of wine that were scheduled to be shipped and that Premier Cru somehow neglected to get out before the warehouse was shuttered after the Ch. 7 filing. I was able to redeem that wine and have it shipped to me by paying the Trustee some percentage of the original purchase price. Does anybody recall whether that was 50% or something less? I somehow think it was less, but the clawback letter I just received says that was the prior deal.

Has anyone done further digging to assess whether there is a reasonable basis for objection to the clawback claim? Seems to me if it is possible to resolve it for 50% or less than 50% on top of the purchase price, it's not such a bad deal. By now the retail value of the wine is higher than the original purchase price anyway, as Premier was selling quite a few things for pretty deep discounts for a number of years before it folded.

Has anyone countered the 50% offer with something less?

Thoughts anyone? I will tell you my immediate inclination is to just write a check and move on. Another thought is whether a claim made to AMEX might recoup some of the settlement amount - AMEX did refund me what was paid for wine that never materialized and could not be delivered - fortunately that was not much in my case.

You can pm me if you wish - I know it's a bit awkward airing this stuff in an open forum.
I would ignore any clawback email.
What are you basing your suggestion to ignore a clawback email on?
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#6813 Post by todd waldmann » November 3rd, 2017, 1:14 pm

Steven Miller wrote:
ClarkstonMark wrote: a) Maybe because wines were substituted. To me that is clearly showing preferential treatment.
preferential to those who took action over those who did nothing?
That was my assumption.
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#6814 Post by Don Cornwell » November 3rd, 2017, 1:22 pm

ClarkstonMark wrote:I would ignore any clawback email.
Forgive me, but that is really bad advice. These letters are coming from bankruptcy counsel for the Trustee, not some professional debt collection outfit. Believe me, if the amount of the claim exceeds $12,850 (so that venue in Oakland in proper) they will with almost 100% certainty follow up these letters with preference actions in the Bankruptcy Court
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#6815 Post by andrew messenger » November 3rd, 2017, 1:39 pm

Don, I received a letter claiming I had preferential treatment for $9700 in goods. They are requesting 1/2 of this amount as settlement. I already lost substantially more with PC. Are you saying since the amount of preferential treatment is under $10000, I should ignore the letter? Anyone with solid legal advice?

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#6816 Post by Larry Link » November 3rd, 2017, 3:13 pm

What if you offer to return 1/2 of the wine to them, at their shipping expense?

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#6817 Post by Don Cornwell » November 3rd, 2017, 3:34 pm

andrew messenger wrote:Don, I received a letter claiming I had preferential treatment for $9700 in goods. They are requesting 1/2 of this amount as settlement. I already lost substantially more with PC. Are you saying since the amount of preferential treatment is under $10000, I should ignore the letter? Anyone with solid legal advice?
Andrew:

I'm not in a position to give you legal advice on it, and I would urge you to consult with a local bankruptcy attorney. But, to be clear, no, I'm not saying you or anyone else should ignore the preference claim letters from the Trustee.

But I would urge you, and your bankruptcy counsel, when you respond to the letter from the Trustee's counsel (and perhaps make a counter-offer), to consider including an explicit reference to the provisions of 28 U.S. Code Section 1409(b) and In re LITTLE LAKE INDUSTRIES, INC., 158 B.R. 478, 484 (9th Cir. BAP 1993), which as I pointed out holds that the only proper venue for a preference action which is below the monetary threshold of $12,850 is the Federal District Court where you reside. The Trustee cannot properly sue you in Oakland for a $9,700 preference item unless you live within the Northern District of Calfornia.

Assuming that you and the Trustee do not reach a settlement of the preference claim, the Trustee may or may not choose to file a claim against you in your residence district.

Also, it is possible that the Trustee's counsel may try to sue you in the Bankruptcy proceedings in Oakland anyway, notwithstanding the provisions of Section 1409(b) and the Ninth Circuit case law (which is binding on the Bankruptcy Court here). Although it would be in my opinion unethical and improper for a Trustee to file a preference action in a court where they know the venue is improper, I've seen conduct like this before. The Chapter 7 Trustees are used to getting a lot of deference/latitude from the Bankruptcy Courts with respect to preference and fraudulent conveyance claims, and some Trustees and their counsel seem to think the Trustees are made of teflon and that they can get away with almost anything. You also have to recognize that to the extent someone traded in an unfilled futures order for goods in stock within 90 days of the bankruptcy, that conduct is not likely to generate any sympathy at all from a Bankruptcy Judge.

However, such a strategy could backfire badly here for the Trustee. If you have made very clear to the Trustee's counsel in writing that Section 1409(b) and the In Re Little Lake Industries decision require that you can only be sued in your residence district, and the Trustee commenced the preference action in Oakland anyway, the Bankruptcy Court may well choose to dismiss the case with prejudice pursuant to Rule 12(b)(3) rather than to transfer it to your residence district. You could theoretically also obtain an award of attorney's fees against the Trustee and/or his counsel pursuant to Rule 11 of the Federal Rules of Civil Procedure on the grounds that they knowingly sued you in the incorrect judicial district seeking to leverage a settlement because of the expense involved in defending the claim in Oakland. But, of course, the big disadvantage in this scenario would be that you would have to retain Bankruptcy counsel in the Oakland/SF area to deal with the improper filing of the preference proceeding here.
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#6818 Post by EricG » November 3rd, 2017, 7:01 pm

Don Cornwell wrote:
ClarkstonMark wrote:I would ignore any clawback email.
Forgive me, but that is really bad advice. These letters are coming from bankruptcy counsel for the Trustee, not some professional debt collection outfit. Believe me, if the amount of the claim exceeds $12,850 (so that venue in Oakland in proper) they will with almost 100% certainty follow up these letters with preference actions in the Bankruptcy Court
Don, what about matters less than $12,850?
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#6819 Post by Jamie Kutch » November 3rd, 2017, 8:17 pm

Tonight I received a clawback email from Wendel Rosen asking me for money.

If anyone can assist me, I can be reached at 917-270-8180 or jamie@kutchwines.com

I am happy to trade anyone's guidance or advice with wine, either mine or other.

I am grateful for anyone's help here. - Jamie
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#6820 Post by Don Cornwell » November 3rd, 2017, 9:56 pm

EricG wrote:
Don Cornwell wrote:
ClarkstonMark wrote:I would ignore any clawback email.
Forgive me, but that is really bad advice. These letters are coming from bankruptcy counsel for the Trustee, not some professional debt collection outfit. Believe me, if the amount of the claim exceeds $12,850 (so that venue in Oakland in proper) they will with almost 100% certainty follow up these letters with preference actions in the Bankruptcy Court
Don, what about matters less than $12,850?
The only thing that means is that if the claim is below $12,850 and above the minimum floor of $6,425 for a preference action under Section 547 of the Bankruptcy Code (11 U.S.C. Section 547), that the Bankruptcy Trustee must bring the preference claim in judicial district of your residence. Let's say hypothetically you live in the Middle District of North Carolina. Will the Bankruptcy Trustee commence an action against you there for say an $11,000 preference claim? Maybe not if you're the only person with a preference claim between $6,425 and $12,850 in your Federal District, but if you're one of many it's likely you will get sued. You also have to worry about the scenario where the Trustee refuses to follow the mandatory venue provisions and files suit in the Bankruptcy Court in Oakland anyway. Once you get served with the Complaint, you have no practical choice but to respond or a default judgment will be entered against you.
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#6821 Post by EricG » November 4th, 2017, 8:08 am

Don Cornwell wrote: The only thing that means is that if the claim is below $12,850 and above the minimum floor of $6,425 for a preference action under Section 547 of the Bankruptcy Code (11 U.S.C. Section 547), that the Bankruptcy Trustee must bring the preference claim in judicial district of your residence. Let's say hypothetically you live in the Middle District of North Carolina. Will the Bankruptcy Trustee commence an action against you there for say an $11,000 preference claim? Maybe not if you're the only person with a preference claim between $6,425 and $12,850 in your Federal District, but if you're one of many it's likely you will get sued. You also have to worry about the scenario where the Trustee refuses to follow the mandatory venue provisions and files suit in the Bankruptcy Court in Oakland anyway. Once you get served with the Complaint, you have no practical choice but to respond or a default judgment will be entered against you.
Thank you, Don. Appreciate the information and all that you do for this community.

Eric
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#6822 Post by A.Gillette » November 4th, 2017, 9:33 am

Don - you should be careful about interpreting the statute here. I haven’t looked at this issue in years, but the last time I did there was a significant circuit split as to whether the small dollar venue limitation applied to preference claims. I have no idea if that has been resolved by appellate courts or where bankruptcy courts in California have come out. To all readers - I’m not acting as your counsel in this post and I’m not giving you legal advice.
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#6823 Post by Frank Drew » November 4th, 2017, 4:21 pm

Remind me, what was the date of the bankruptcy filing?

I wouldn't normally be happy to be a minnow among all you whales, but for this issue I'm ok with it.
Last edited by Frank Drew on November 29th, 2017, 9:13 pm, edited 1 time in total.

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#6824 Post by Don Cornwell » November 4th, 2017, 4:40 pm

A.Gillette wrote:Don - you should be careful about interpreting the statute here. I haven’t looked at this issue in years, but the last time I did there was a significant circuit split as to whether the small dollar venue limitation applied to preference claims. I have no idea if that has been resolved by appellate courts or where bankruptcy courts in California have come out. To all readers - I’m not acting as your counsel in this post and I’m not giving you legal advice.
Alex:

I'm mindful of the different decisions on the 1409(b) issue in other Bankruptcy Courts outside of California, but this Bankruptcy Case is pending within the Ninth Circuit and In re LITTLE LAKE INDUSTRIES, INC., 158 B.R. 478, 484 (9th Cir. BAP 1993) is definitely good law in this Circuit. It has never been overruled or even questioned in the Ninth Circuit. It's binding here on the Bankruptcy Court if the Trustee attempted to file a preference claim below the $12,850 threshold amount against residents of other judicial districts.
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#6825 Post by Don Cornwell » November 4th, 2017, 4:41 pm

Frank Drew wrote:Remind me, what was the date of the bankruptcy filing?

I wouldn't normally be happy to be a minnow among all you whales, but for this issue I'm ok with it?
Frank:

January 8, 2016 was the BK filing date.
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#6826 Post by Frank Drew » November 4th, 2017, 6:46 pm

Thanks, Don. So they were shipping wines even after they filed, apparently.

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#6827 Post by Al Osterheld » November 4th, 2017, 7:31 pm

Frank Drew wrote:Thanks, Don. So they were shipping wines even after they filed, apparently.
In mid to late afternoon on the day they filed (1/08/16), all employees were sent home and the place was shuttered. There were shipments already in transit, but I'm pretty sure none after they closed the doors. I had a modest order scheduled to ship on the following Tuesday.

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#6828 Post by A.Gillette » November 4th, 2017, 8:09 pm

Don Cornwell wrote:
A.Gillette wrote:Don - you should be careful about interpreting the statute here. I haven’t looked at this issue in years, but the last time I did there was a significant circuit split as to whether the small dollar venue limitation applied to preference claims. I have no idea if that has been resolved by appellate courts or where bankruptcy courts in California have come out. To all readers - I’m not acting as your counsel in this post and I’m not giving you legal advice.
Alex:

I'm mindful of the different decisions on the 1409(b) issue in other Bankruptcy Courts outside of California, but this Bankruptcy Case is pending within the Ninth Circuit and In re LITTLE LAKE INDUSTRIES, INC., 158 B.R. 478, 484 (9th Cir. BAP 1993) is definitely good law in this Circuit. It has never been overruled or even questioned in the Ninth Circuit. It's binding here on the Bankruptcy Court if the Trustee attempted to file a preference claim below the $12,850 threshold amount against residents of other judicial districts.
I’m out. I don’t want anything to do with this nonsense. Sorry I posted. I’d urge anyone with money at issue to speak to counsel.
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#6829 Post by Steven Miller » November 22nd, 2017, 6:40 pm

For those being hassled for small amounts of $ here is how one "transferee" who received a much larger refund is caving:

The Compromise Terms
Under the proposed compromise, the trustee will release the Transferee from all claims in
exchange for his payment of $150,000.00 plus waiver of any claim he may assert against the Debtor's
estate.

Factual Background and Merits of Compromise
Within 90 days prior to the filing of the Debtor's bankruptcy petition on January 8, 2016, the
Debtor transferred refunds in the aggregate amount of $259,083.40 to the Transferee.

The trustee sued to recover the Transfers as avoidable preferences (Adv. Pro. I7-4031). The Transferee
raised numerous defenses, including challenges to the prima facie case which would bring the base
amount of the claim down to $235,118.23.

http://docs.bmcgroup.com/en/384/20171122-2.pdf

Here's another on selling wines to Spectrum currently in possession of JF Hillebrand France in Beaune, France,

https://docs.bmcgroup.com/en/384/20171122-1.pdf
Last edited by Steven Miller on November 22nd, 2017, 6:59 pm, edited 1 time in total.
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#6830 Post by Walter Nissen » November 22nd, 2017, 6:49 pm

Steven Miller wrote:For those being hassled for small amounts of $ here is how one "transferee" who received a much larger refund is caving:

The Compromise Terms
Under the proposed compromise, the trustee will release the Transferee from all claims in
exchange for his päyrirent of $ t i0,000.00 plus waiver of any claim he may assert against the Debtor's
estate.
The PDF says $150,000. So 58% of the amount. And it was cash, right, not wine?

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#6831 Post by Steven Miller » November 22nd, 2017, 6:57 pm

the cut & paste from the PDF got butchered !! I did some minor edits to bring it closer to the PDF which is the best place to read the details without said errors.

Yes, my understanding it was cash transfers both ways.
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#6832 Post by Arv R » November 23rd, 2017, 8:52 am

Its astounding to me that PC was paying anyone cash as the Foxenbunker was being encircled in those last days.

Can you imagine the shit show that Sears and JC Penney will be when they finally pull the plug?
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#6833 Post by Pat Martin » November 23rd, 2017, 11:30 am

Arv R wrote:Its astounding to me that PC was paying anyone cash as the Foxenbunker was being encircled in those last days.

Can you imagine the shit show that Sears and JC Penney will be when they finally pull the plug?
I had the same thought. Why send cash? Even shipping wine already paid for was a bit odd except that perhaps employees realized they too could be in legal jeopardy so they bent over backwards to be accommodating.
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#6834 Post by Don Cornwell » November 23rd, 2017, 3:04 pm

Arv R wrote:Its astounding to me that PC was paying anyone cash as the Foxenbunker was being encircled in those last days.

Can you imagine the shit show that Sears and JC Penney will be when they finally pull the plug?
The cash payments were likely made to people that Premier Cru was buying inventory from, i.e. wholesaler X was owed $259,000+ and Premier Cru wanted to buy another $200,000 worth of inventory that they thought they could turn quickly. In order to get the wholesaler to sell them the inventory they wanted (maybe on credit), they had to pay off the old debt. The wholesaler probably got burned on both ends if they extended further credit based on the cash payment within the 90 days before the bankruptcy filing.
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#6835 Post by Al Osterheld » November 23rd, 2017, 10:03 pm

I'm pretty sure this cash payment was a refund to a customer. Obviously, a significant customer and probably also an especially persuasive one.

-Al

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#6836 Post by Dale Bowers » November 29th, 2017, 7:28 pm

Only the lawyers ever benefit from a bankruptcy. https://docs.bmcgroup.com/en/384/20171129-1.pdf
Cheers!

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#6837 Post by John Morris » November 29th, 2017, 7:43 pm

Walter Nissen wrote:
Steven Miller wrote:For those being hassled for small amounts of $ here is how one "transferee" who received a much larger refund is caving:

The Compromise Terms
Under the proposed compromise, the trustee will release the Transferee from all claims in
exchange for his päyrirent of $ t i0,000.00 plus waiver of any claim he may assert against the Debtor's
estate.
The PDF says $150,000. So 58% of the amount. And it was cash, right, not wine?
For what it's worth, on the original Jan. 21, 2016 creditors schedule, Tananbaum, the person in question, was shown as having a $58,503 unsecured claim. Was he a distributor/importer, as Don suggested?
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#6838 Post by Al Osterheld » November 29th, 2017, 8:41 pm

I would imagine he has much better ways to make money and, that if he did decide to be a distributor or importer, that the claims and clawbacks would be through a company rather than through him as an individual.

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#6839 Post by Larry Link » November 29th, 2017, 9:34 pm

Dale Bowers wrote:Only the lawyers ever benefit from a bankruptcy. https://docs.bmcgroup.com/en/384/20171129-1.pdf
Agreed. There are $2.3M of unencumbered funds, and the IT guy, accountants and lawyers are looking to grab $1M of the pool.

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#6840 Post by Don Cornwell » November 30th, 2017, 12:18 am

Dale Bowers wrote:Only the lawyers ever benefit from a bankruptcy. https://docs.bmcgroup.com/en/384/20171129-1.pdf
It is pretty disgusting to me to see Brian Nishi getting paid $140,000 for 13 months of work for the Bankruptcy Trustee.
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#6841 Post by Steve Eisenhauer » November 30th, 2017, 6:15 am

My experience in the bankruptcy field when I practiced was that the only people who got money from the proceedings were professionals working the case - not creditors, unless they were very secured and there were substantial assets.

I am retired for many years, but my belief was always that there is a settlement point for any commercial matter that properly balances all the risks and rewards. Parties just have to be sane enough to recognize that point.
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#6842 Post by Al Osterheld » November 30th, 2017, 6:59 am

FWIW, I think $25k was withheld from the payment to Nishi pending resolution of a potential preferential transfer in the last 90 days (Fox gave him $25k in wine to pay off a loan Nishi had made).

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#6843 Post by Ken V » November 30th, 2017, 7:11 am

Al Osterheld wrote:FWIW, I think $25k was withheld from the payment to Nishi pending resolution of a potential preferential transfer in the last 90 days (Fox gave him $25k in wine to pay off a loan Nishi had made).

-Al
Wait, are you saying that the trustee had business dealing with the bankruptee in the period just before the bankruptcy? How could he then be appointed trustee?
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#6844 Post by J a y H a c k » November 30th, 2017, 7:22 am

Don Cornwell wrote: . . . The cash payments were likely made to people that Premier Cru was buying inventory from, i.e. wholesaler X was owed $259,000+ and Premier Cru wanted to buy another $200,000 worth of inventory that they thought they could turn quickly. In order to get the wholesaler to sell them the inventory they wanted (maybe on credit), they had to pay off the old debt. The wholesaler probably got burned on both ends if they extended further credit based on the cash payment within the 90 days before the bankruptcy filing.
Only if the wholesaler had a REALLY REALLY bad lawyer or PC paid $459,000, because $200,000 of any payment in your hypothetical would be a contemporaneous transfer for full value.
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#6845 Post by J a y H a c k » November 30th, 2017, 7:30 am

Steve Eisenhauer wrote:My experience in the bankruptcy field when I practiced was that the only people who got money from the proceedings were professionals working the case - not creditors, unless they were very secured and there were substantial assets. . .
That is true in many but not all cases, which is the fundamental flaw in bankruptcy case administration. However, my client just got a 20% dividend on an unsecured claim in Chapter 7, which was better than nothing but small consolation for a $500000+ loss. We had a case about 20 years ago where we represented a trustee and paid a 100% dividend plus interest to all creditors by suing the lawyers for the bankrupt company and proving that they had conspired to move money to Panama. The trustee, our client, was severely criticized in private by other trustees for making them look bad!
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#6846 Post by Al Osterheld » November 30th, 2017, 7:36 am

Ken V wrote:
Al Osterheld wrote:FWIW, I think $25k was withheld from the payment to Nishi pending resolution of a potential preferential transfer in the last 90 days (Fox gave him $25k in wine to pay off a loan Nishi had made).

-Al
Wait, are you saying that the trustee had business dealing with the bankruptee in the period just before the bankruptcy? How could he then be appointed trustee?
Nishi is the former PC IT guy that the trustee hired as a consultant because he understood the software and operations of the PC business. The presiding judge had to approve the trustee using Nishi's services.

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#6847 Post by Oliver McCrum » November 30th, 2017, 10:21 am

We just received a claw-back demand, for a payment for a wine invoice. Do any of you legal eagles have an opinion as to whether I should fight it?
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#6848 Post by Walter Nissen » November 30th, 2017, 10:52 am

Don Cornwell wrote:
Dale Bowers wrote:Only the lawyers ever benefit from a bankruptcy.
https://docs.bmcgroup.com/en/384/20171129-1.pdf
It is pretty disgusting to me to see Brian Nishi getting paid $140,000 for 13 months of work for the Bankruptcy Trustee.
Tech salaries in the Bay Area are spiraling out of control. The median home price in Berkeley is over $600 a square foot, meaning that a 1000 sq ft condo is about 55K a year inlcuding taxes and insurance. 140K for a year of full time work is basically the going rate.

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#6849 Post by Don Cornwell » November 30th, 2017, 1:55 pm

Walter Nissen wrote:
Don Cornwell wrote:
Dale Bowers wrote:Only the lawyers ever benefit from a bankruptcy.
https://docs.bmcgroup.com/en/384/20171129-1.pdf
It is pretty disgusting to me to see Brian Nishi getting paid $140,000 for 13 months of work for the Bankruptcy Trustee.
Tech salaries in the Bay Area are spiraling out of control. The median home price in Berkeley is over $600 a square foot, meaning that a 1000 sq ft condo is about 55K a year inlcuding taxes and insurance. 140K for a year of full time work is basically the going rate.
Walter:

I understand, but the tech salaries are completely irrelevant to my point.

The problem I have is that Brian Nishi was part of the fraud here. He was both a salesman for Premier Cru and their IT person. Brian knew exactly what was happening because he was the one person other than John Fox with access to the computer data. Brian Nishi continued to be involved in making sales for Premier Cru throughout his time there. Brian Nishi remained loyal to John Fox and stayed there for 20 years despite knowing that many of the wines that John Fox (and Brian Nishi) were selling to consumers Premier Cru didn't own.

As I explained in this thread a long time ago, and on the similar thread on the Parker Board long before Wine Berserkers started, Brian Nishi was the salesperson that I dealt with for many years. In 2007, I had my third pre-arrival burgundy order in as many years cancelled by Premier Cru. That order was for 12 bottles of 2002 Drouhin Musigny. Premier Cru offered the Drouhin wines months before anyone else in the world did. I later found out that at the time Premier Cru offered and sold the wine to me, Drouhin had neither sold nor made any commitments to deliver any 2002 Musigny to anyone. When Brian Nishi told me that Premier Cru wasn't going to be able to fill the order I insisted that PC had to find the wine and replace it, since I no longer could. Some months later Mr. Nishi informed me that PC could not obtain replacement wine for the order. I then basically cross-examined Brian Nishi on the phone. At that point I knew that PC had offered the Drouhin Musigny two or three months before Drouhin or its importers had sold or committed to sell the wine to anyone. I got Mr. Nishi to admit that was true. He also admitted that he had access to the computer system as the IT person at PC and that he knew at the time he originally accepted my order and charged my credit card that Premier Cru had no confirmed supply of the wine required to fill the order. Of course, he had failed to tell me that when I placed the order. I pointed out that was had happened was outright intentional fraud for which both he and Premier Cru could be sued. At that point, I concluded that the Premier Cru's whole operation was fraudulent and likely a Ponzi scheme. My outstanding orders were cancelled and refunded, and I stopped doing business with Premier Cru.

Like others, I posted about this on the old Mark Squires Bulletin Board and I tried to warn people, but I basically got stoned by the naysayers who insisted that I was wrong and that they allegedly always got whatever wines they ordered.

Years later, when the FBI started their investigation and asked for my assistance, I related my own experiences and pointed to Mr. Nishi's continuing involvement in sales as well as being Premier Cru's IT person. I was totally blown away when I read that the Trustee wanted to pay Brian Nishi to help him unravel what happened, when I thought Mr. Nishi was the one employee who would be facing serious criminal problems. I warned the FBI and the US Trustee's office, who were aware of the Trustee's desire to retain Mr. Nishi, but nothing was done and Nishi was retained with the Bankruptcy Court's approval.

So it is extremely galling for me to see him getting paid out of the Bankruptcy estate funds, when I think he should be sitting in the adjoining cell at Lompoc with Mr. Fox.
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#6850 Post by Walter Nissen » November 30th, 2017, 3:08 pm

Ah, I didn't realize he was involved in the business at that level. I thought I had read every post in this thread, but obviously I didn't retain the information about what you were saying about him. In that light, your disgust is entirely understandable, even if it no doubt would have cost far more to find someone else to go through the systems from scratch.

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