Opposition To Motion For Entry of An Order (1) Directing and Approving Form of Notice and (2) Setting Deadline For Filing Objections To Petition

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

1
OPPOSITION TO MOTION FOR ENTRY OF AN ORDER (1) DIRECTING AND APPROVING FORM OF NOTICE; AND (2)
SETTING DEADLINE FOR FILING OBJECTIONS TO PETITION
9999-001/93249
RICHARD A. MARSHACK, #107291
rmarshack@marshackhays.com
D. EDWARD HAYS, #162507
ehays@marshackhays.com
CHAD V. HAES, #267221
chaes@marshackhays.com
MARSHACK HAYS LLP
870 Roosevelt Avenue
Irvine, California 92620
Telephone: (949) 333-7777
Facsimile: (949) 333-7778

COREY W. GLAVE, #164746
SBCPFattorney@gmail.com
Attorney at Law
1042 2nd Street
Hermosa Beach, California 90254
Telephone: (323) 547-0472
Facsimile: (310) 379-0456

Attorneys for Creditor,
SAN BERNARDINO CITY
PROFESSIONAL FIREFIGHTERS
LOCAL 891

UNITED STATES BANKRUPTCY COURT

CENTRAL DISTRICT OF CALIFORNIA - RIVERSIDE DIVISION

In re

CITY OF SAN BERNARDINO,

Debtor.

Case No. 6:12-bk-28006-MJ

Chapter 9

CREDITOR SAN BERNARDINO CITY
LOCAL 891S OPPOSITION TO
DEBTOR CITY OF SAN
BERNARDINOS MOTION FOR
ENTRY OF AN ORDER (1)
DIRECTING AND APPROVING
FORM OF NOTICE; AND (2) SETTING
DEADLINE FOR FILING
OBJECTIONS TO PETITION;
MEMORANDUM OF POINTS AND
AUTHORITIES AND DECLARATION
OF CHAD V. HAES IN SUPPORT
THEREOF

Date: August 17, 2012
Time: 10:00 a.m.
Ctrm: 301
/ / /
/ / /
Case 6:12-bk-28006-MJ Doc 85 Filed 08/15/12 Entered 08/15/12 23:01:09 Desc
Main Document Page 1 of 8

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

2
9999-001/93249
TO THE HONORABLE MEREDITH A. JURY, UNITED STATES BANKRUPTCY COURT
JUDGE, THE OFFICE OF THE UNITED STATES TRUSTEE AND ALL INTERESTED
PARTIES:
Creditor, SAN BERNARDINO CITY PROFESSIONAL FIREFIGHTERS
LOCAL 891 (the Firefighters), respectfully submits this opposition to Debtor, City of San
Bernardinos Motion for Entry of an Order (1) Directing and Approving Form of Notice; and
(2) Setting Deadline for Filing Objections to Petition [Docket No. 46]. Counsel for the
Firefighters was not retained until August 15, 2012 at 6:15 p.m. As such, the Firefighters
respectfully request that the Court consider its opposition and represent as follows:
1. INTRODUCTION
The Firefighters object to the Motion on the grounds that the Debtors claim of
eligibility for relief under Chapter 9 cannot be adequately assessed until the relevant facts are
known. To date, the only pleading filed by the Debtor in support of its claim of eligibility is a
one page document entitled Statement of Qualification under Section 109(C), which does not
include sufficient information to enable the Firefighters to assess the Debtors eligibility for
Chapter 9. Further, based on the limited information currently available to the Firefighters, it
appears the Debtor does not qualify to be a debtor under Chapter 9. The Motion should be
denied for these reasons and for the reasons as set forth more fully below.
2. BACKGROUND
On August 1, 2012, the City of San Bernardino (Debtor) filed a voluntary
petition under Chapter 9 of the Title 11 of the United States Code (the Petition) [Docket
No. 1].
On August 9, 2012, the Debtor listed San Bernardino City Professional
Firefighters Local 891 as one of their 20 largest unsecured creditors [Docket No. 41].
On August 9, 2012, the City of San Bernardino filed a Motion for Entry of an
Order (1) Directing and Approving Form of Notice; and (2) Setting Deadline for Filing
Objections to Petition (the Motion) [Docket No. 46]. On August 9, 2012, the Debtor filed an
Application for Order Setting Hearing on Shortened Notice re: Motion for Entry of an Order

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

3
9999-001/93249
(1) Directing and Approving Form of Notice; and (2) Setting Deadline for Filing Objections to
Petition [Docket No. 49].
On August 10, 2012, the Court entered an Order Granting the Application and
Setting Hearing on Shortened Notice [Docket No. 55]. On August 13, 2012, the Debtor filed a
Statement of Qualification under Section 109(C) (the Statement of Qualification) [Docket
No. 71].
3. ARGUMENT
A. The Firefighters Do Not Have Sufficient Information Regarding the Debtors
Eligibility for Chapter 9
The Court should not set a deadline to object to the Petition until after the Debtor
files financial information in support of eligibility and the parties have had sufficient opportunity
to conduct discovery. Under 11 U.S.C. 921(c), a debtor in a Chapter 9 bears the burden of
showing that it meets the requirements of Section 109(c). Under Section 109(c), an entity
qualifies for relief under Chapter 9 of the Code only if such entity:
(1) is a municipality;
(2) is specifically authorized, in its capacity as a municipality or by name, to be a
debtor under such chapter by state law, or by a governmental officer or
organization empowered by state law to authorize such entity to be a debtor under
such chapter;
(3) is insolvent;
(4) desires to affect a plan to adjust such debts; and
(5) (A) has obtained the agreement of creditors holding at least a majority in the
amount of the claims of each class that such entity intends to impair under a plan
and a case under such chapter;
(B) has negotiated in good faith with creditors and has failed to obtain the
agreement of creditors holding at least a majority in amount of the claims of each
class that such entity intends to impair under a plan in a case under such chapter;
/ / /

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

4
9999-001/93249
(C) is unable to negotiate with creditors because such negotiation is
impracticable; or
(D) reasonably believes that a creditor may attempt to obtain a transfer that is
avoidable under section 547 of this title.
11 U.S.C. 109(c).
Here, the Debtors formulaic Statement of Qualification is nothing more than a
regurgitation of the language contained in Section 109(c). The Statement of Qualification
contains no substantive information to support Debtors claim of eligibility under Chapter 9.
While the Debtor proposes to file further pleadings in support of its eligibility, the Motion
imposes no deadline for the filing of such materials. As it stands, it is impossible for the
Firefighters to verify Debtors eligibility. In fact, the Firefighters cannot even assess how much
time will be needed to analyze the Debtors financial information until the Debtors eligibility
pleadings have been filed. If the Motion is approved, the Firefighters may be forced to file an
objection to the petition on limited facts and knowledge, leading to uninformed decision-making
and potentially unnecessary litigation.
B. The Debtor Has Not Complied with Statutory Requirements
From the limited information available to the Firefighters, it appears the Debtor is
ineligible to be a Chapter 9 debtor. Specifically, there is no evidence to establish that the Debtor
has complied with 11 U.S.C. 109(c)(5) or Assembly Bill 506, which requires financially
distressed municipalities to either: (1) engage in a neutral evaluation process with its creditors; or
(2) declare a fiscal emergency. See, Cal. Gov. Code 53760. Specifically, the Debtor failed to
engage in negotiations with the Firefighters prior to the filing of the petition. Thus, even if the
Debtors declaration of a fiscal emergency results in compliance with Assembly Bill 506, there is
no information to show compliance with Section 109(c). In addition, the Debtor has failed to
make any substantive showing that it desires to affect a plan to adjust its debts. See, 11 U.S.C.
109(c)(4). The Debtor must present its case regarding eligibility before the deadline to object to
the Petition is set.
/ / /

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

5
9999-001/93249
4. CONCLUSION
Wherefore, the Firefighters respectfully request that the Court: (1) set a hearing
on the Motion only after the Debtor has filed its eligibility pleadings; or, alternatively, (2) set a
deadline to object to the Petition no sooner than 90 days after the petition date.

DATED: August 15, 2012 Respectfully submitted,

MARSHACK HAYS LLP

By: _______________________________
D. EDWARD HAYS
CHAD V. HAES
Attorneys for Creditor,
SAN BERNARDINO CITY
LOCAL 891

/s/ D. Edward Hays

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28

1
DECLARATION OF CHAD V. HAES
93249v1/9999-101
DECLARATION OF CHAD V. HAES

I, CHAD V. HAES, say and declare as follows:
1. I am an attorney at law duly admitted to practice before all courts of the
State of California. I am an associate with the law firm of Marshack Hays LLP, attorneys of
record for Creditor, SAN BERNARDINO CITY PROFESSIONAL FIREFIGHTERS LOCAL
891.
2. If called upon to testify as to the matters set forth herein, I could and
would competently testify thereto.
3. This untimely opposition was not filed beyond the Court-imposed
deadline for any improper or dilatory purpose.
4. The San Bernardino City Professional Firefighters Local 891 (the
Firefighters) was unable to retain counsel until completing their interview process which
occurred on August 15, 2012, at 6:15 p.m.
5. During our initial meeting with representatives of the Firefighters, it was
made clear that they did not have sufficient information to determine whether to object to the
voluntary Chapter 9 petition (the Petition) filed by the City of San Bernardino (the Debtor).
6. The Firefighters further indicated that the Debtor failed to engage in either
good-faith negotiations or a neutral evaluation process with the Firefighters prior to the filing of
the Petition.
I declare under penalty of perjury under the laws of the State of California that
the foregoing is true and correct, and that this declaration is executed on August 15, 2012, at
Irvine, California.

CHAD V. HAES


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:
870 Roosevelt Avenue, Irvine, CA 92620

A true and correct copy of the foregoing document entitled (specify): CREDITOR SAN BERNARDINO CITY
PROFESSIONAL FIREFIGHTERS LOCAL 891S OPPOSITION TO DEBTOR CITY OF SAN BERNARDINOS MOTION
FOR ENTRY OF AN ORDER (1) DIRECTING AND APPROVING FORM OF NOTICE; AND (2) SETTING DEADLINE
FOR FILING OBJECTIONS TO PETITION; MEMORANDUM OF POINTS AND AUTHORITIES AND DECLARATION OF
CHAD V. HAES IN SUPPORT THEREOF 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
August 15, 2012, 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:
Service information continued on attached page

2. SERVED BY UNITED STATES MAIL:
On ______________, 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.

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 August 15, 2012, 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.
Via Personal Delivery
Honorable Meredith A. Jury
United States Bankruptcy Court
Central District of California
3420 Twelfth Street, Suite 325 /
Courtroom 301
Riverside, CA 92501-3819

Via Personal Delivery
Office of The United States Trustee
3685 Main Street, Suite 300
Riverside, CA 92501
Via Overnight Mail
Debtor
City of San Bernardino, California
City Hall
300 North D Street
San Bernardino, CA 92418


I declare under penalty of perjury under the laws of the United States that the foregoing is true and correct.

August 15, 2012 Chanel Mendoza

Date Printed Name Signature


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

1. TO BE SERVED BY THE COURT VIA NOTICE OF ELECTRONIC FILING (NEF) Cont
Jerrold Abeles abeles.jerry@arentfox.com
Joseph M Adams jadams@lawjma.com
Andrew K Alper aalper@frandzel.com, efiling@frandzel.com;ekidder@frandzel.com
Thomas V Askounis taskounis@askounisdarcy.com
Anthony Bisconti tbisconti@bmkattorneys.com
Jeffrey E Bjork jbjork@sidley.com
J Scott Bovitz bovitz@bovitz-spitzer.com
Jeffrey W Broker jbroker@brokerlaw.biz
Deana M Brown dbrown@milbank.com
Michael J Bujold Michael.J.Bujold@usdoj.gov
Christina M Craige ccraige@sidley.com
Alex Darcy adarcy@askounisdarcy.com
Susan S Davis sdavis@coxcastle.com
Paul R. Glassman pglassman@sycr.com
Everett L Green everett.l.green@usdoj.gov
James A Hayes jhayes@cwlawyers.com
M Jonathan Hayes jhayes@hayesbklaw.com,
roksana@hayesbklaw.com;carolyn@hayesbklaw.com;elizabeth@hayesbklaw.com
Bonnie M Holcomb bonnie.holcomb@doj.ca.gov
Whitman L Holt wholt@ktbslaw.com
Steven J Katzman SKatzman@bmkattorneys.com
Mette H Kurth kurth.mette@arentfox.com
Gregory A Martin gmartin@winston.com
Aron M Oliner roliner@duanemorris.com
Scott H Olson solson@seyfarth.com
Dean G Rallis drallis@sulmeyerlaw.com
Christopher O Rivas crivas@reedsmith.com
Kenneth N Russak krussak@frandzel.com, efiling@frandzel.com;dmoore@frandzel.com
Gregory M Salvato gsalvato@salvatolawoffices.com, calendar@salvatolawoffices.com
Benjamin Seigel bseigel@buchalter.com, IFS_filing@buchalter.com
Jason D Strabo jstrabo@mwe.com, losangelestrialdocket@mwe.com
Matthew J Troy matthew.troy@usdoj.gov
United States Trustee (RS) ustpregion16.rs.ecf@usdoj.gov
Anne A Uyeda auyeda@bmkattorneys.com
Annie Verdries verdries@lbbslaw.com
Brian D Wesley brian.wesley@doj.ca.gov
3. SERVED BY EMAIL Cont
Attorneys for Debtor, Paul R. Glassman, Laura L. Buchanan, Kathleen D. DeVaney - pglassman@sycr.com,
lbuchanan@syscr.com, and kdevaney@sycr.com

Opposition To Motion For Entry of An Order (1) Directing and Approving Form of Notice and (2) Setting Deadline For Filing Objections To Petition

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Opposition To Motion For Entry of An Order (1) Directing and Approving Form of Notice and (2) Setting Deadline For Filing Objections To Petition

Uploaded by

Copyright:

Available Formats

1

You might also like