why giovanni quit

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UNITED STATES BANKRUPTCY COURT

CENTRAL DISTRICT OF CALIFORNIA

SANTA ANA DIVISION

In re LAGUNA BRISAS, LLC,,

Debtor and Debtor-In-Possession.

Case No. 8:12-bk-12599-ES Chapter 11 Proceeding CHAPTER 11 STATUS REPORT Hearing: Date: May 30, 2014 Time: 10:30 A.M. Courtroom: 5A Address: 411 W. 4th Street Santa Ana, CA 92701-4593

LAGUNA BRISAS, LLC, the deb tor in the above-referenced Chapter 11 proceeding (the

“Debtor”), hereby submits its Status Report:

As the Court may recall, the parties with alleged security interests on the Debtor’s hotel,

reached a global settlement agreement whereby the Debtor would either sell or refinance the hotel

by the end of May 2014 or the end of June 2014 if it made a double monthly “adequate protection”

payment, or the secured parties could exercise their State law rights at that time.

CBRE, the Debtor’s Court-approved real estate broker, marketed the hotel for sale. As part

of such process, it created an electronic war-room with information for potential purchasers to get

GIOVANNI ORANTES – State Bar No. 190060 THE ORANTES LAW FIRM, P.C. 3435 Wilshire Blvd. – Suite 2920 Los Angeles, CA 90010 Telephone: (213) 389-4362 Facsimile: (877) 789-5776 [email protected] General Insolvency Counsel for Debtor And Debtor-In-Possession

Case 8:12-bk-12599-ES Doc 591 Filed 05/30/14 Entered 05/30/14 06:41:00 Desc Main Document of 3

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access to financial information and other relevant information for them to conduct their due

diligence prior to a “Call For Offer Date,” in accordance with the Court-approved overbid

procedures. A Call For Offer Date of December 17, 2013 was set and the Debtor received over

200 requests for credentials to access CBRE’s war-room prior thereto and received offers, the

highest of which was for $8.75 Million. In light of such a low offer, the Debtor did not select a

stalking horse as was its right to do or not do, and none of the secured parties had any objection

thereto. CBRE continues to market the hotel for sale. In the meantime, since the major factor that

contributed to the low offer was the land lease to which the hotel is subject, the Debtor, which only

recently realized that the landlord has been overreaching, filed a complaint against the landlord for

a declaration that the rent was to increase by $25,000 in 2010 and thereafter be adjusted only by

the consumer price index as the Debtor’s principal understood and not, like the landlord maintains,

increase $25,000 per year yearly in addition to the increase due to the consumer price index

adjustment, especially since the 2010 $25,000 increase was granted in exchange for an increase in

the term of the lease by a mere four years. The landlord filed a motion for abstention, which the

Court denied.

The Debtor was not able to file a feasible Chapter 11 plan capturing the global settlement

and counsel’s communications and relationship with the Debtor’s principal became strained when

such principal would not authorize counsel to permit the receiver to transmit a membership

application to Best Western on behalf of Kay Nam Kim, a creditor in this estate, who has plans to

purchase the hotel. Such refusal required counsel to file a motion to be relieved as counsel, which

was filed on May 29, 2014 in counsel interpretation of the governing caselaw:

While he must always take his directions from his client, where

counsel for the estate develops material doubts about whether a

proposed course of action in fact serves the estate's interests, he must

seek to persuade his client to take a different course or, failing that,

resign. Under no circumstances, however, may the lawyer for a

bankruptcy estate pursue a course of action, unless he has

determined in good faith and as an exercise of his professional


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judgment that the course complies with the Bankruptcy Code and

serves the best interests of the estate.

In re Perez, 30 F.3d 1209, 1219 (9th Cir. 1994)

Counsel for the Debtor inadvertently failed to file a status report or appear at the Chapter

11 Status Conference on May 22, 2014 even though he did appear, through appearance counsel, at

a status conference in a related adversary proceeding held only one hour before and the Court set

an Order to Show Cause Why the Case Should Not Be Dismissed or Converted to be heard at the

same time as the status conference, to which counsel already responded explaining the comedy of

errors that led to counsel failing to appear at such Chapter 11 case status conference, something

that had never happened before in his professional life.

DATED: May 29, 2014 By: /s/Giovanni Orantes

Giovanni Orantes, Esq. General Insolvency Counsel for Debtor and Debtor-in-Possession


This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.

June 2012 F 9013-3.1.PROOF.SERVICE

PROOF OF SERVICE OF DOCUMENT I am over the age of 18 and not a party to this bankruptcy case or adversary proceeding. My business address is: The Orantes Law Firm, P.C. 3435 Wilshire Blvd., Ste. 2920, Los Angeles, CA 90010

A true and correct copy of the foregoing document entitled (specify): CHAPTER 11 STATUS REPORT will be served or was served (a) on the judge in chambers in the form and manner required by LBR 5005-2(d); and (b) in the manner stated below:

1. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF): Pursuant to controlling General Orders and LBR, the foregoing document will be served by the court via NEF and hyperlink to the document. On (date) 5/30/2014, I checked the CM/ECF docket for this bankruptcy case or adversary proceeding and determined that the following persons are on the Electronic Mail Notice List to receive NEF transmission at the email addresses stated below: Michaeline H Correa on behalf of Creditor Mehrdad Elie [email protected], [email protected] Craig S Ganz on behalf of Creditor Best Western International, Inc. [email protected], [email protected];[email protected] Thomas M Geher on behalf of Interested Party Courtesy NEF [email protected], [email protected];[email protected];[email protected] Thomas M Geher on behalf of Interested Party Byron Chapman [email protected], [email protected];[email protected];[email protected] Richard H Golubow on behalf of Defendant Kay Nam Kim [email protected], [email protected];[email protected] Richard H Golubow on behalf of Interested Party Courtesy NEF [email protected], [email protected];[email protected] Richard H Golubow on behalf of Interested Party Kay Nam Kim [email protected], [email protected];[email protected] Michael J Hauser on behalf of U.S. Trustee United States Trustee (SA) [email protected] Johnny Kim on behalf of Debtor Laguna Brisas LLC [email protected] Johnny Kim on behalf of Plaintiff Laguna Brisas LLC [email protected] Johnny Kim on behalf of Special Counsel Johnny Kim [email protected] Miyun Lim on behalf of Interested Party Courtesy NEF [email protected] Elizabeth A Lossing on behalf of U.S. Trustee United States Trustee (SA) [email protected] Jennifer L Nassiri on behalf of Creditor Wells Fargo Bank, N.A., as Trustee for the registered holders of BofA Commercial Mortgage Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-3, by and through CWCapital Asset Management [email protected], [email protected] Giovanni Orantes on behalf of Debtor Laguna Brisas LLC [email protected], [email protected],[email protected],[email protected] Giovanni Orantes on behalf of Interested Party Kay Nam Kim [email protected], [email protected],[email protected],[email protected] Giovanni Orantes on behalf of Plaintiff Laguna Brisas LLC [email protected], [email protected],[email protected],[email protected]

Case 8:12-bk-12599-ES Doc 591-1 Filed 05/30/14 Entered 05/30/14 06:41:00 Desc Exhibit Proof of Service Page 1 of 2

This form is mandatory. It has been approved for use by the United States Bankruptcy Court for the Central District of California.

June 2012 F 9013-3.1.PROOF.SERVICE

Keith C Owens on behalf of Creditor Wells Fargo Bank, N.A., as Trustee for the registered holders of BofA Commercial Mortgage Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-3, by and through CWCapital Asset Management [email protected], [email protected];[email protected] Keith C Owens on behalf of Defendant Wells Fargo Bank, N.A., as Trustee for the registered holders of Banc of America Commercial Mortgage Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-3 [email protected], [email protected];[email protected] Steven G Polard on behalf of Creditor MTB, LLC [email protected], [email protected] Steven G Polard on behalf of Defendant MTB, LLC [email protected], [email protected] Steven G Polard on behalf of Defendant RIGG HOTEL, LLC [email protected], [email protected] Hamid R Rafatjoo on behalf of Creditor Wells Fargo Bank, N.A., as Trustee for the registered holders of BofA Commercial Mortgage Inc., Commercial Mortgage Pass-Through Certificates, Series 2006-3, by and through CWCapital Asset Management [email protected], [email protected];[email protected] Jay M Ross on behalf of Creditor Mehrdad Elie [email protected], [email protected] United States Trustee (SA) [email protected] Service information continued on attached page 2. SERVED BY UNITED STATES MAIL: On (date) 5/30/2014, I served the following persons and/or entities at the last known addresses in this bankruptcy case or adversary proceeding by placing a true and correct copy thereof in a sealed envelope in the United States mail, first class, postage prepaid, and addressed as follows. Listing the judge here constitutes a declaration that mailing to the judge will be completed no later than 24 hours after the document is filed. United States Bankruptcy Court Chambers of honorable judge Erithe Smith 411 West Fourth Street, Suite 5040 Santa Ana, CA 92701-4593 Service information continued on attached page 3. SERVED BY PERSONAL DELIVERY, OVERNIGHT MAIL, FACSIMILE TRANSMISSION OR EMAIL (state method for each person or entity served): Pursuant to F.R.Civ.P. 5 and/or controlling LBR, on (date) _______________, I served the following persons and/or entities by personal delivery, overnight mail service, or (for those who consented in writing to such service method), by facsimile transmission and/or email as follows. Listing the judge here constitutes a declaration that personal delivery on, or overnight mail to, the judge will be completed no later than 24 hours after the document is filed. Service information continued on attached page I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct. 5/30/2014 Giovanni Orantes /s/ Giovanni Orantes Date Printed Name Signature

Case 8:12-bk-12599-ES Doc 591-1 Filed 05/30/14 Entered 05/30/14 06:41:00 Desc Exhibit Proof of Service Page 2 of 2

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