Motion for Summary Judgment in OLD NAVY, LLC VS. SF PACIFIC PLACE ACQUISITION LLC ET AL| Trellis.Law

On January 03, 2019 a Exhibit,Appendix was filed involving a dispute between Old Navy, Llc, , A Delaware Limited Liability, Sf Pacific Place Acquisition Llc, and Does 1 Through 100, Ponte Gadea California, Llc, Sf Pacific Place Acquisition Llc, for CONTRACT/WARRANTY in the District Court of San Francisco County.

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1 STROOCK & STROOCK & LAVAN LLP
CHRISTOPHER R. FREDRICH (State Bar No. 266471)
2 2029 Century Park East, 18th Floor ELECTRONICALLY
Los Ángeles, CA 90067-3086
3 Telephone: 310-556-5800 F I L E D
Superior Court of California,
Facsimile: 310-556-5959 County of San Francisco
4 Email: lacalendar@stroock.com
02/27/2020
5 Attorneys for Defendant and Cross-Complainant Clerk of the Court
BY: SANDRA SCHIRO
SF PACIFIC PLACE ACQUISITION LLC Deputy Clerk
6

9 SUPERIOR COURT OF THE STATE OF CALIFORNIA
10 FOR THE COUNTY OF SAN FRANCISCO
11

12 OLD NAVY, LLC, ) Case No. CGC 19-572527
)
13 Plaintiff, ) Assigned to the Hon. Garrett L. Wong
v. )
14 )
) APPENDIX OF NON-CALIFORNIA
15 SF PACIFIC PLACE ACQUISITION LLC and AUTHORITIES IN SUPPORT OF SF
)
PONTE GADEA CALIFORNIA, LLC, and PACIFIC PLACE ACQUISITION LLC’S
16 ) MOTION FOR SUMMARY JUDGMENT
DOES 1 through 100, ) OR, IN THE ALTERNATIVE, SUMMARY
17 ) ADJUDICATION
Defendants. )
18 ) [Notice of Motion and Motion for Summary
) Judgment, Declaration of Stephen E. Roulac
19 ) and Separate Statement of Undisputed Material
) Facts filed concurrently herewith]
20 )
SF PACIFIC PLACE ACQUISITION LLC, ) Complaint Filed: January 3, 2019
21 )
Cross-Complainant, Hearing Information:
22 ) Date: May 15, 2020
) Time: 9:30 a.m.
v. )
23 Dept. 302
)
OLD NAVY, LLC,
24 ) Reservation Id. No.: 01310515-02
Cross-Defendant. )
25 )
)
26 )
)
27

APPENDIX OF NON-CALIFORNIA AUTHORITIES ISO SF PACIFIC PLACE ACQUISITION LLC’S
MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION
NY 78011314
1 Defendant and Cross-Complainant SF Pacific Place Acquisition LLC (“SF Pacific”) hereby

2 submits a copy of the authorities that are cited in the Motion for Summary Judgment Or, In The

3 Alternative, Summary Adjudication that are not published in the official California case reporters

4 or otherwise readily available to the Court.

5 Ex. No.

6 1. In re Mortgage Fund ’08 LLC, 541 B.R. 467 (N.D. Cal. 2015).

9 Dated: February 27, 2020 STROOCK & STROOCK & LAVAN LLP
CHRISTOPHER R. FREDRICH
LLP

10
LAVAN

11
Los Angeles, California 90067-3086

By: /s/ Christopher R. Fredrich
2029 Century Park East

12
&

Christopher R. Fredrich
STROOCK

13
Attorneys for Defendant and Cross-Complainant
14 SF Pacific Place Acquisition LLC
15
STROOCK &

28
-2-
APPENDIX OF NON-CALIFORNIA AUTHORITIES ISO SF PACIFIC PLACE ACQUISITION LLC’S
MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION
NY 78011314
EXHIBIT 1
In re Mortgage Fund '08 LLC, 541 B.R. 467 (2015)
61 Bankr.Ct.Dec. 224

541 B.R. 467 West Headnotes (11)
United States Bankruptcy Court, N.D. California,
Oakland Division.
[1] Contracts
IN RE: MORTGAGE FUND '08 LLC, Debtor. Existence of ambiguity
Susan L. Uecker, Trustee of the Mortgage Under California law, if a contract is reasonably
Fund '08 Liquidating Trust, Plaintiff, susceptible to more than one interpretation, it is
v. ambiguous.
Robert L. Montgomery, Defendant.

Case No. 11–49803 RLE [2] Evidence
| Grounds for admission of extrinsic evidence
Adv. Proc. No. 13–4190 RLE
Under California law, decision whether to
|
admit parol evidence involves two-step process
Signed November 19, 2015
under which court firstprovisionally receives,
Synopsis without actually admitting, all credible evidence
Background: Trustee of liquidating trust established in concerning parties' intentions to determine
Chapter 11 case of investment company that issued secured “ambiguity” and, second, admits such evidence
loans to real estate developers brought action against to aid in interpreting contract if itdetermines
noteholder, alleging constructive fraudulent transfer claim that language is “reasonably susceptible” to
under California law. Parties cross-moved for summary interpretation urged.
judgment.

[3] Bankruptcy
Evidence
Holdings: The Bankruptcy Court, Roger L. Efremsky, J., held
that: Bankruptcy
Compromises, Releases, and Stipulations
[1] under California law, language of settlement agreement Under California law, language of settlement
between debtor and affiliate company, regarding release of agreement between Chapter 11 debtor
avoidance claims against noteholders who were members of investment company that issued secured loans
affiliate for recovery of amounts paid by affiliate with $66 to real estate developers and affiliate company,
million transferred from debtor, was ambiguous, and thus, the regarding release of avoidance claims against
court would admit extrinsic evidence to aid in interpreting the noteholders who were members of affiliate for
agreement, and recovery of amounts “paid by” affiliate with $66
million transferred from debtor, was ambiguous,
[2] under California law, release in settlement between debtor and thus, the court would admit extrinsic
and affiliate included constructive fraudulent transfer claim evidence to aid in interpreting the agreement
brought by trustee against noteholder. in action brought by trustee against noteholder
alleging constructive fraudulent transfer claim;
the “paid by” affiliate terminology was
Ordered accordingly. susceptible to competing interpretations, as
individuals who owned, controlled and managed
Procedural Posture(s): Motion for Summary Judgment. affiliatealso owned, controlled and managed
debtor and limited liability company (LLC) that
was debtor's sole member and manager.

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In re Mortgage Fund '08 LLC, 541 B.R. 467 (2015)
61 Bankr.Ct.Dec. 224

might have been demanded or enforced. Cal. Civ.
[4] Bankruptcy Code § 1541.
Compromises, Releases, and Stipulations
Under California law, language of settlement
agreement between Chapter 11 debtor [8] Release
investment company that issued secured loans Operation and effect in general
to real estate developers and affiliate company,
Under California law, written release generally
regarding release of avoidance claims against
extinguishes any obligation covered by the
noteholders who were members of affiliate for
release's terms, provided it has not been obtained
recovery of amounts paid by affiliate with
by fraud,deception, misrepresentation, duress,
$66 million transferred from debtor, included
or undue influence.
constructive fraudulent transfer claim brought by
trustee against noteholder; noteholder's portfolio
account statement showed that affiliatetook
credit for making $150,000 payment to him, [9] Contracts
and while trustee asserted that savings clause in General and specific words and clauses
release stated that it did not limit right of debtor Under California law, the principle ejusdem
to bring action against any third party, phrase generis (literally, of the same kind), means that
“any third party” did not include noteholder, as where specific words follow general words in
the listfollowing “any third party,” including a contract, the general words are construed to
any manager, member, insider or professional of embrace only things similar in nature to those
debtor, illustratedthe type of third party, and enumerated by the specific words.
noteholders were not within that type of third
party. Cal. Civ. Code § 1638.
[10] Contracts
Language of Instrument
[5] Contracts Under California law, the rule of contract
Extrinsic facts interpretation expressio unius est exclusio
Under California law governing resolution of an alterius means the expression of one thing
ambiguity in a contract, if the extrinsic evidence implies the exclusion of the other.
is not in conflict, the resolution of the ambiguity
is a question of law.
[11] Release
General rules of construction
[6] Contracts Under California law, a release may be construed
Intention of Parties most strongly against the party who prepared it.
Under California law governing contracts, it is
the outward expression of the agreement, rather
than a party's unexpressed intention, which the
court will enforce.
Attorneys and Law Firms

*468 Erin E. Daly, Bennett G. Young, Jeffer Mangels Butler
[7] Release and Mitchell LLP, Robert G. Retana, Pearson, Simon &
Nature and requisites in general Warshaw, LLP, San Francisco, CA, for Plaintiff.
Under California law, a “release” is the
abandonment, relinquishment or giving up of a Richard S. Miller, Richard S. Miller, Esq., Walnut Creek, CA,
right or claim to the person against whom it for Defendant.

© 2020 Thomson Reuters. No claim to original U.S. Government Works. 2
In re Mortgage Fund '08 LLC, 541 B.R. 467 (2015)
61 Bankr.Ct.Dec. 224

Cnty of Orange, 682 F.3d 1126, 1132 (9th Cir.2012) (court
may take judicial notice of undisputed matters of public
MEMORANDUM DECISION RE record including documents on file in federal courts).
MOTIONS FOR SUMMARY JUDGMENT

Roger L. Efremsky, U.S. Bankruptcy Judge A. The Bankruptcy Cases
MF08's bankruptcy case was commenced as an involuntary
I. Introduction chapter 7 on September 12, 2011. MF08 Docket no. 1. The
Before the court are cross-motions for summary judgment by case was converted to chapter 11 and an order for relief was
plaintiff Susan L. Uecker, the liquidating trustee appointed entered on September 28, 2011. MF08 Docket no. 11. The
under the confirmed plan of Mortgage Fund '08 LLC order approving its Disclosure Statement and confirming its
(the “Trustee” and “MF08”), and defendant Robert L. Plan was entered on February 3, 2012 and the Trustee has
Montgomery. This matter has been fully briefed and argued. been in place since that time. MF08 Docket nos. 144–145.

*469 The Trustee moves for summary judgment on the REL commenced its chapter 11 case in the Northern District
California Civil Code § 3439.04(a) constructive fraudulent of Texas on September 13, 2011. REL Docket no. 1. The REL
transfer claim in her first amended complaint. Montgomery Confirmation Order was entered on June 26, 2012. As will be
moves for summary judgment on the affirmative defenses explained below, MF08 filed a claim in the REL case which
asserted in his answer. is the genesis for these motions.

For the reasons explained below, the court grants summary
adjudication for Montgomery on his affirmative defense B. Ownership and Operation of MF08 and REL
regarding the effect of a release in a settlement agreement Walter Ng and his sons Kelly Ng and Barney Ng owned,
which effectively moots the remaining summary judgment managed, and controlled, directly or indirectly,MF08 and
issues. REL and their related entities, B–4 Partners, LLC and Bar–
K. Docket no. 30, FAC ¶ 8–10; Docket no. 31, Answer ¶
8–10; Docket no. 44–5, Uecker Decl. Ex. 5 (MF08's proof
II. Background of claim filedin REL's case (the “Proof of Claim”); REL
These motions require a review of certain events in MF08's Docket no. 843 (Disclosure Statement). The FAC alleges that
chapter 11 case and the chapter 11 case of its affiliate, RE Walter and Kelly Ng formed REL in January 2002. 1 REL
Loans, LLC, which was filed in the Northern District of Texas made secured *470 loans to real estate developers. To raise
(Case no. 11–35865–BJH) (“REL”). money to fund these loans, it sold unregistered securities to
investors who became members of REL. By the end of 2006,
The following facts are taken from the First Amended REL had raised over $700 million, had over 1,400 members
Complaint (the “FAC”) (Docket no. 30); Montgomery's and reported more than $55 million cash on hand. Docket no.
Answer to the FAC (Docket no. 31); the Trustee's Declaration 30, FAC ¶ 12; Docket no. 31, Answer ¶ 12; Docket no. 44–10,
and Statement of Undisputed Facts (Docket nos. 44–2 and 44– Sugarman Report. See also, REL Disclosure Statement (REL
5); Montgomery's Declaration and Statement of Undisputed Docket no. 843); Declaration of James A. Weissenborn in
Facts (Docket nos. 46–1 and 46–2); and Montgomery's support of confirmation of REL Plan (REL Docket no. 943).
Request for Judicial Notice (Docket no. 48).
In early 2007, REL faced liquidity problems. Ithad been
For context, the court also takes judicial notice of MF08's advised by its attorneys that it could not raise more money
Plan and Disclosure Statement (MF08 Docket nos. 101–102); from new investors which meant it would then be unable to
REL's Disclosure Statement (REL Docket no. 843); REL's meet the withdrawal demands of its old investors and meet its
Plan (REL Docket no. 905); the Declaration of James A. funding commitments to its borrowers. Docket no. 30, FAC ¶
Weissenborn in Support of Confirmation of the REL Plan 13–14; Docket no. 44–10, Sugarman Report at 3–5.
(REL Docket no. 943); and the Findings of Fact, Conclusions
of Law, and Order Confirming the REL Plan (the “REL In November 2007, REL made its members into noteholders
Confirmation Order”) (REL Docket no. 967). Harris v. in what is referred to as the “Exchange Transaction” and
the issuance of “Exchange Notes.” REL Docket no. 843,

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In re Mortgage Fund '08 LLC, 541 B.R. 467 (2015)
61 Bankr.Ct.Dec. 224

Disclosure Statement at 21–22. When it filed its bankruptcy
case in September 2011, REL had approximately 2,900 Docket no. 44–5, Uecker Dec. Ex. 5 (emphasis added).
noteholders who were owed approximately $646 million
(the “REL Noteholders”). REL Docket no. 843, Disclosure *471 The Proof of Claim seeks the recovery of the Cash
Statement at 22–23. Montgomery is an REL Noteholder. Transfers based on the theory that MF08 made them with
the actual intent to hinder, delay or defraud entities to whom
In December 2007, the managers of REL created MF08. MF08 was or became indebted. It includes a list of each of the
Docket no. 30, FAC ¶ 16; Docket no. 44–10, Sugarman Cash Transfers that totals $66,226,496.
Report at 1. The Mortgage Fund, LLC (“TMF”) was MF08's
sole member and manager; Walter Ng and Kelly Ng were
D. MF08 Settlement with REL and Confirmation of
the sole members of TMF and thus controlled MF08. Docket
the REL Plan
no. 30, FAC ¶ 8–10; Docket no. 31, Answer ¶ 8–10. REL,
REL informally objected to MF08's Proof of Claim.
MF08, TMF, B–4 Partners, and Bar–K all did business from
Docket no. 44–5, Uecker Dec. ¶ 14. In April 2012, the
the same address in Lafayette, California. Docket no. 30, FAC
principal stakeholders in the REL case—REL, Wells Fargo
¶ 9; Docket no. 31, Answer ¶ 9.
Capital Finance (REL's secured lender), and the official
REL Noteholders' Committee (representing Montgomery's
MF08's stated purpose was to make secured loans to real
interestsas a REL Noteholder)—participated in a judicial
estate developers. Docket no. 30, FAC ¶ 16; Docket no. 44–
mediation. They then reached a settlement of the outstanding
10, Sugarman Report at 1. MF08 did business much as REL
issues regarding the validityand priority of MF08's Proof
did after the Exchange Transaction. As of its petition date,
of Claim, along with related issues which allowed REL to
MF08 had approximately 572 noteholders who were owed
proceed to confirmation of its Plan. Docket no. 44–5, Uecker
approximately $80 million and held a realestate portfolio
valued at approximately $72 million. MF08 Docket no. 101, Dec. ¶ 14–15. 2
Disclosure Statement at 1–8.
REL filed a motion to obtain court approval of the settlement.
Docket no. 48, RJN Ex. 10 (Motion for Approval of
C. MF08's $66 Million Proof of Claim in the REL Settlement, REL Docket no. 907 (the “Motion”). Attached to
Case the Motion is an unsigned copy of the settlement agreement
The Trustee's declaration states that “[p]rior to my between REL and MF08 (the “Settlement Agreement”).
appointment as trustee, MF08 asserted that MF08 transferred Docket no. 48, RJN Ex. 9 (Settlement Agreement), REL
$66,226,496 to REL and that REL was liable to MF08 Docket no. 907–1 (Settlement Agreement).
in this amount. I continued to assert this claim after my
appointment.” Docket no. 44–5, Uecker Dec. ¶ 13–14, Ex. The Motion describes the Proof of Claim and MF08's
5 (Proof of Claim). The Proof of Claim describes the MF08 fraudulent transfertheory. The Motion defines the “REL
ownership structure as noted above. It asserts: Transfers” as the transfer of $66 million made between
December 2007 and “approximately August of 2008” 3 and
the commingling by REL in its general account with other
[B]etween December 4, 2007, and REL funds. Docket no. 48, RJN Ex. 10 (Motion ¶ 12–
February 4, 2009, the Ngs caused 13). MF08 contended that “if it can trace the funds that it
the aggregate sum of $66,226,496 transferred to REL from REL to any given [REL] Noteholder,
to be transferred from MF08's MF08 might have the right to pursue recovery from that
bank accounts to [REL] (the “Cash [REL] Noteholder as a subsequent transferee pursuant to
Transfers”). The Cash Transfers were Bankruptcy Code § 550(b).” These are defined as the “MF08
made either (1) directly to [REL], (2) Potential Avoidance Actions.” Docket no. 48, RJN Ex. 10
indirectly through [TMF] or Bar–K, (Motion ¶ 14). The Motion then describes the response by
or (3) to [REL's] borrowers to enable REL and the REL Noteholders Committee:
such borrowers to service or repay
loans extended to them by [REL].

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In re Mortgage Fund '08 LLC, 541 B.R. 467 (2015)
61 Bankr.Ct.Dec. 224

this “enhancement,” MF08 agreed to vote its $66 million
claim in favor of the plan. 4 Docket no. 48, RJN Ex. 10
[REL] and the Noteholders Committee (Motion ¶ 17). In addition, the Motion states that in exchange,
contend that Noteholders who MF08 would waive the right to pursue all MF08 Potential
received the REL Transfers who were Avoidance Actions against REL Noteholders, and MF08
not insiders of [REL] cannot be liable would be appointed to the trust oversight committee of the
to MF08 because (a) it is not possible liquidating trust to be created under the REL Plan. Docket no.
to trace the dollars received from 48, RJN Ex. 10 (Motion ¶ 3 (summarizing terms of agreement
MF08 to any specific REL Transfer resolving objection to MF08's Proof of Claim and the relative
or transferee; and (b) each [REL] treatment of all unsecured claims and the REL Noteholder
Noteholder that received an REL claims)).
Transfer, with the possible exception of
insiders of [REL], received any such The Motion explained that absent this agreement, the parties
REL Transfer on account of a debt would be forced to litigatethe merits of the MF08 Proof
payable by [REL] for value, in good of Claim, the merits of the final plan compromise, the
faith,and without knowledge of the relative priorities and rights as between the holders of
voidability of the transfer from MF08 general unsecured claims and the REL Noteholders, and
to [REL] (even assuming that transfer the merits of the MF08 Potential Avoidance Actions. This
is avoidable) and, therefore, would was an unattractive proposition because it would “consume
be shielded from liability pursuant to substantial cash that would otherwise be distributable to REL
Bankruptcy Code § 550(b). Noteholders and MF08's creditors.” Docket no. 48, RJN Ex.
10 (Motion ¶ 23–25).

*472 Docket no. 48, RJN Ex. 10 (Motion ¶ 15) (emphasis The Motion also noted that many REL Noteholders were
added). also investors in MF08, and paying the professionals to
redistribute the limited funds available as between MF08 and
The Motion then describes the “prior plan compromise” REL would reduce the total amount received by all creditors.
which had been negotiated by REL and the REL Noteholders' Litigating MF08's Potential Avoidance Actions would also
Committee and the change to it which was now required by likely be complex and could require expensive efforts to
this proposed settlement with MF08. Docket no. 48, RJN trace funds, and every dollar spent on professionals would
Ex. 10 (Motion ¶ 16). Essentially, the prior plan compromise reduce the amount available for distribution to creditors. The
provided that ifthe REL Noteholders voted to accept the modified plan eliminated these issues and was supported
plan, the REL Noteholders' lien on REL assets would be by all stakeholders, including the committee of MF08's
released, they would share pro rata with holders of general noteholders. Docket no. 48, RJN Ex. 10 (Motion ¶ 23–25).
unsecured claims and their claims would not be “subordinated
or challenged,” but each REL Noteholder's claim would be On June 18, 2012, the REL bankruptcy court held a hearing
reduced by 50% of any cash received afterthe November on the Motion and granted it.Docket no. 48, RJN Ex. 11
2007 Exchange Transaction through the REL petition date. (Order on Motion). As a result, MF08 obtained allowance of
Docket no. 48, RJN Ex. 10 (Motion ¶ 16). its $66 million claim, the $5 million preferred payment, and
5
a position on the REL trust oversight committee. *473
The proposed deal with MF08 made one change to the “prior The REL Noteholders agreed to reduce the allowed amount of
plan compromise.” Instead of the REL Noteholders sharing their claims by 50% of what they had been paid between the
pro rata with the general unsecured creditors,the first$5 November 2007 Exchange Transaction and REL's September
million to be distributed was to go to general unsecured 2011 petition date in exchange for a release from potential
creditors before the REL Noteholders would share pro rata. fraudulent transfer actions. With the REL Noteholders' and
This change increased the distribution to general unsecured MF08's support, REL obtained a clear path to confirmation
creditors—primarily benefitting MF08 as the largest such of its Plan.
creditor—and reduced the distribution to REL Noteholders
through reallocation of the first $5 million. In exchange for

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In re Mortgage Fund '08 LLC, 541 B.R. 467 (2015)
61 Bankr.Ct.Dec. 224

E. The Settlement Agreement 2.06 MF08's potential right to assert claims against holders
The Settlement Agreement is an exhibit to the Motion. Of of Exchange Notes that received REL Transfers shall
particular concern for these summary judgment motions are be referred to herein as “MF08's Potential Avoidance
the following sections. The recitals in § 2 of the Settlement Actions”.
Agreement provide:
Sections 3.01—3.03 dealt with the allowance of MF08's claim
2.01 MF08 transferred cash in an amount equal to in the REL case. In short, if REL's Plan was confirmed and
$66,226,496 to [REL] during the period from December of the plan compromise was approved, MF08's Proof of Claim
2007 and through 2008. “shall be allowed” in the amount of $66,226,496. Sections
*474 4.01—4.02 dealt with waiver of the right to pursue
2.02 MF08 contends that [REL] is liable to MF08 for
MF08 Potential Avoidance Actions:
the monies received on various theories, including without
limitation based upon the contention that the transfers may 4.01 If the MF08 Claim is Allowed pursuant to Paragraph
have constituted fraudulent transfers. 3 above, MF08 waives the right to pursue any MF08
Potential Avoidance Actions; provided, however, that this
2.03 During the time period from December of 2007
Agreement shall not limit or restrictthe right of MF08
through approximately August of 2008, [REL] received
to bring any action against any third party, including any
cash and deposited that cash into its general account
manager, member, insider or professional of MF08. This
from multiple sources, including without limitation (a) the
provision shall be void and of no further force or effect if
transfers from MF08 described in 2.01, above, (b) payoffs
the MF08 Claim is not Allowed pursuant to Paragraph 3,
by [REL's] borrowers of principal and interest, (c) sales of
above.
assets, and (d) advances by Wells Fargo Capital Finance,
LLC (“Wells Fargo”). 4.02 With respect to the claims released herein, MF08
acknowledges that it has been advised by itsattorneys
2.04 During the time period from December of 2007
concerning, and is familiar with, the California Civil Code
through approximately August of 2008, [REL] made
Section 1542 and itexpressly waives any and all rights
payments out of itsgeneral account to many different
under California Civil Code Section 1542 and under any
parties, including without limitation, payments to various
other federal or state statute or law of similar effect with
creditors, including without limitation the holders of
respect to the claims released herein. Section 1542 of the
Exchange Notes issued to [REL's] Noteholders (the “REL
California Civil Code provides as follows:
Transfers”).
A GENERAL RELEASE DOES NOT EXTEND TO
2.05 MF08 contends that if it could trace the funds that it
CLAIMS WHICH THE CREDITOR DOES NOT
transferred to [REL] as described in Paragraph 2.01 from
KNOW OR SUSPECT TO EXIST IN HIS OR HER
[REL] to the holders of Exchange Notes, MF08 might have
FAVOR AT THE TIME OF EXECUTING THE
the right to pursue recovery from the holders of Exchange
RELEASE, WHICH IF KNOWN BY HIM OR HER
Notes as “subsequent transferees” pursuant to Bankruptcy
MUST HAVE MATERIALLY AFFECTED HIS OR
Code § 550(d) [sic].[REL] contends that holders of
HER SETTLEMENT WITH THE DEBTOR.
Exchange Notes who received the REL Transfers cannot
be liable to MF08 because (a) it is not possible to trace the Docket no. 48, RJN Ex. 9–10 (Motion and Settlement
dollars received from MF08 to any specific REL Transfer; Agreement) (emphasis in original).
and (b) each holder of an Exchange Note that received
an REL Transfer, with the possible exception of insiders
who may have received an REL Transfer, received any F. The Transfer to Montgomery
such REL Transfer on account of a debt payable by [REL] The Trustee declares that shortly after she was appointed as
for value, in good faith, and without knowledge of the Trustee in February 2012, she was provided all the books and
voidability of the transferfrom MF08 to [REL] (even records maintained by MF08, including the bank statements
assuming the transfer is avoidable) and, therefore, would and general ledgers for both MF08 and TMF. 6 Docket no.
be shielded from liability pursuant to Bankruptcy Code § 44–5, Uecker Dec. ¶ 3.
550(b).

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In re Mortgage Fund '08 LLC, 541 B.R. 467 (2015)
61 Bankr.Ct.Dec. 224

Between approximately July 22, 2008 and October 8, 2008, 3. On July 23, 2008, TMF wrote check no. 1020 for $150,000
the managers of REL made a series of transfers from MF08 made payable to “WFB IRA Services fbo Montgomery.”
to TMF and these funds were used to pay REL investors to Docket no. 44–6, Uecker Dec. Ex. 3 ($150,000 check).
keep the REL “Ponzi scheme” going. Docket no. 30, FAC ¶
16–17. The transfer to Montgomery is allegedly one of these 4. On July 25, 2008, REL transferred $447,566 to MF08.
transfers. Docket no. 30, FAC ¶ 18. 7
The FAC alleges that Docket no. 48, RJN Ex. 12 at 5 of 6 (REL bank statement),
MF08 was insolvent at the time these transfers were made Docket no. 44–6, Uecker Dec. Ex. 1 at 2 of 3 (MF08 bank
and they were made with actual or constructively fraudulent statement).
intent and no value was given in exchange. Docket no. 30,
FAC ¶ 17–21. (The Trustee's expert also states that MF08 5. On July 28, 2008, MF08 transferred $447,566 to TMF.
was insolvent from its inception onwards. Docket no. 44–7, Docket no. 44–6, Uecker Dec. Ex. 1 at 2 of 3 (MF08 bank
Sugarman Dec. ¶ 11. Montgomery does not dispute that MF08 statement) Ex. 2 at 1 of 2 (TMF bank statement).
was insolvent.)
6. On July 28, 2008, TMF's bank honored the $150,000 check
Montgomery had $924,887 invested in REL as of December to Montgomery. Docket no. 44–6, Uecker Dec. Ex. 2 at 2 of 2
31, 2007. Docket no. 46–2, Montgomery Dec. ¶ 4, Ex. 1, Ex. (TMF bank statement). Montgomery's IRA statement shows
5. On July 1, 2008, at Montgomery's request, REL transferred it had received this $150,000 as of July 31, 2008. Docket no.
$150,000 to Montgomery. On July 31, 2008, an additional 46–2, Montgomery Dec. Ex. 3.
$150,000 was transferred to Montgomery. These transfers
went directly to Montgomery's *475 Individual Retirement The Trustee points out that the only deposit into the TMF
Account at Wells Fargo Bank. Docket no. 31, Answer Ex. account between July 1 and July 23, 2008 was the $528,791
B (9/30/08 REL investor portfolio account statement—each deposit and it raised the balance in this account to $571,022.
$150,000 transfer described as “sold shares” in REL); Docket However, the July 2008 TMF bank statement also shows that
no. 46–2, Montgomery Dec. Ex. 1 (3/18/10 REL investor $447,566 was deposited on July 28, 2008. The TMF bank
portfolio account statement—each transfer described as “note statement also shows there were only two withdrawals from
prepay”); Docket no. 46–2, Montgomery Dec. Ex. 3 (1/1/08– the TMF account between July 21 and July 28—the $150,000
12/31/08 Wells Fargo Bank IRA statement—each transfer check to Montgomery and a $400,000 wire transfer to another

Case Info

Judge

Garrett L. Wong Track Judge’s New Case

Case No.

(Subscribe to View)

Document Filed Date

February 27, 2020

Case Filing Date

January 03, 2019

County

Parties

DOES 1 THROUGH 100 Defendant
FREDRICH, CHRISTOPHER R. Attorneys for Defendants
FREDRICH, CHRISTOPHER R. Attorney for the Defendant
GEIBELSON, MICHAEL A. Attorney
GEIBELSON, MICHAEL A. Attorney for the Plaintiff
OLD NAVY, LLC Cross Defendant
OLD NAVY, LLC, , A DELAWARE LIMITED LIABILITY Cross Defendant
OLD NAVY, LLC, , A DELAWARE LIMITED LIABILITY Plaintiff
PONTE GADEA CALIFORNIA, LLC Defendant
SF PACIFIC PLACE ACQUISITION LLC Cross Complainant
SF PACIFIC PLACE ACQUISITION LLC Defendant
Daniel Allender Attorneys for Plaintiffs
John Whisman Attorney
Philip Martin Attorney

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Exhibit,Appendix: OLD NAVY, LLC VS. SF PACIFIC PLACE ACQUISITION LLC ET AL

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