Narrative Opinion Summary
In this bankruptcy case, creditor Randall Jacobs sought administrative expense priority for a certificate of indebtedness issued by Audre, Inc., and for a $44,000 loan allegedly made by Robert Geras and Jerold Siegan. The bankruptcy court denied Jacobs's claim regarding the certificate due to his non-compliance with the Sale Order and classified Geras and Siegan's claim as an unsecured non-priority claim, given the lack of evidence to treat it as a loan. Jacobs appealed, arguing he was a purchaser under the Sale Order and that his denial violated 11 U.S.C. § 364(e), but the court dismissed these claims, noting Jacobs had no right to funds until earned and § 364(e) was inapplicable as no order was modified. Jacobs's appeal for relief under 11 U.S.C. § 503(b)(1)(A) and his equity argument were waived for not being raised earlier. The court's decisions were affirmed, and the disposition is not publishable per Ninth Circuit Rule 36-3, as Audre did not contest the unsecured status of the claim.
Legal Issues Addressed
Administrative Expense Priority under Bankruptcy Codesubscribe to see similar legal issues
Application: The bankruptcy court denied administrative expense priority for Randall Jacobs due to non-compliance with the Sale Order requirements for certificates of indebtedness.
Reasoning: The bankruptcy court denied Jacobs's claim related to the certificate of indebtedness due to non-compliance with the court’s Sale Order governing such certificates.
Classification of Loans versus Capital Contributionssubscribe to see similar legal issues
Application: The bankruptcy court found insufficient evidence to classify Geras and Siegan's funds as a loan rather than a capital contribution, denying administrative expense priority.
Reasoning: Regarding Geras and Siegan's claim, the bankruptcy court found insufficient evidence to classify the funds as a loan rather than a capital contribution, justifying the denial of administrative expense priority.
Definition of Purchaser under Bankruptcy Sale Ordersubscribe to see similar legal issues
Application: Jacobs claimed to be a purchaser under the Sale Order by using trust account funds to acquire certificates, but the court found he had no right to the funds until earned, disqualifying him as a purchaser.
Reasoning: The bankruptcy court disagreed, stating Jacobs had no right to the funds until earned, which meant he was not a purchaser under the Sale Order.
Protection of Creditors' Rights under 11 U.S.C. § 364(e)subscribe to see similar legal issues
Application: Jacobs argued that denying his claim violated 11 U.S.C. § 364(e), but the court found this statute irrelevant as no financing order was reversed or modified.
Reasoning: Jacobs further argued that denying his claim violated 11 U.S.C. § 364(e), which protects creditors' rights; however, the bankruptcy court had not reversed or modified any financing order, rendering § 364(e) irrelevant.
Waiver of Arguments Not Raised in Lower Courtsubscribe to see similar legal issues
Application: Jacobs's arguments for relief under 11 U.S.C. § 503(b)(1)(A) and for the return of funds on equitable grounds were deemed waived since they were not properly raised in the lower court.
Reasoning: Jacobs also sought relief under 11 U.S.C. § 503(b)(1)(A) for necessary expenses of preserving the estate, but failed to properly raise this argument in the lower court, leading to a waiver.