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Voltaire Asset Managers II, LLC v. Tresha-Mob, LLC

United States District Court, W.D. Texas, San Antonio Division

April 10, 2019

VOLTAIRE ASSET MANAGERS II, LLC, Appellant,
v.
TRESHA-MOB, LLC, Appellee.

          ORDER DENYING STAY PENDING APPEAL

          XAVIER RODRIGUEZ UNITED STATES DISTRICT JUDGE

         On this date, the Court considered the status of this case. On April 3, 2019, based on the representations made in the Emergency Motion to Stay Sale Order Pending Appeal filed by Appellant Voltaire Asset Managers II, LLC (docket no. 2), the Court granted ex parte a temporary stay (docket no. 3) of the Bankruptcy Court's sale order.

         On April 8, Voltaire filed a Motion for Expedited Briefing Schedule (docket no. 5), pursuant to Rule 8013(a)(2)(B) of the Federal Rules of Bankruptcy Procedure. Later the same day, Palomar, LLC, and Camco Land, Ltd., moved to intervene in this appeal (docket nos. 8, 11). Intervenors' motions are granted: Camco and Palomar have satisfied the intervention requirements of Bankruptcy Rule 8013(g). The intervenors' motions for leave to respond to Voltaire's motion for stay pending appeal (docket nos. 12, 14) are also granted.

         The Court's prior order stated that the temporary stay will expire April 17 and that after hearing from Appellee Tresha-Mob, LLC, the Court would consider whether to continue the stay pending completion of the appeal or whether to dissolve the stay. The Court did not grant a full stay pending appeal, but rather granted a temporary stay based on the urgencies presented in Voltaire's motion. Although the debtor, Tresha-Mob, did respond to the order granting temporary stay, the intervenors have informed the Court that Appellant Voltaire is the managing member of Appellee Tresha-Mob, and thus the intervenors, not Tresha-Mob, are the true opposition to the stay Voltaire seeks and this appeal generally.

         With the benefit of the additional arguments and factual context these intervenors' responses provide, the Court now considers whether the Sale Order should be stayed pending appeal. As stated below, the Court concludes it should not be stayed, and thus the temporary stay is dissolved.

         Background

         This case comes before the Court on appeal from an April 2 order of the Bankruptcy Court, the Order Relating to the Debtor's Motion to (A) Establish Bidding Procedures in Connection with the Sale of Substantially All of the Debtor's Assets and Assignments of Assumed Leases; (B) Authorize the Debtor to Select a Designated Purchaser or a Stalking Horse Bidder and/or Hold an auction; (C) Approve the Form and Manner of Notice; and (D) Grant Related Relief (the “Sale Order”). See In re: Tresha-Mob, LLC, No. 18-52420-RBK, ECF No. 123.

         The Sale Order approved the results of a March 27 auction sponsored by the Bankruptcy Court. In that auction, Intervenor Camco Land, Ltd., submitted the winning bid for the purchase of a medical office building, the principal asset of debtor Tresha-Mob, LLC. Bankruptcy Judge Ronald King deemed Camco a good faith purchaser. Voltaire's challenge to this order (and the auction it approved) stems from Judge King's exclusion from the bidding process of Cherish Medical Office Building, LLC.

         Under the Bidding Procedures established for this auction, approved on March 5, Tresha-Mob designated four Qualified Bidders. Camco and Cherish were two of these Qualified Bidders. Palomar, LLC (an intervenor in this case and, along with Voltaire, one of two members of Tresha-Mob) claims it learned the identities of the bidders the day before the auction. Docket no. 12-1 at 5. It then “discovered a long-standing business relationship” between Voltaire manager Michael Horrell and Cherish principal Randy Soule that included, in 2014, “suspicious activity between Horrell and Soule involving conveying and re-conveying between themselves . . . title to the same real property being auctioned by the Debtor.” Id. At the auction, Palomar argued that Cherish should not be permitted to bid because of this potentially undisclosed relationship. Id.

         The Bidding Procedures state “[a]ll Qualified Bidders must attend” the auction, docket no. 13-4 at 5, but the only Cherish representative at the auction was attorney Michael Colvard, who stated that he was retained by Cherish the day before the auction, knew almost no information about Cherish, and was authorized only to submit a bid. Judge King sustained Palomar's objection and excluded Cherish from the bidding. At the hearing, Judge King stated:

[Cherish does not] have anybody here, and we don't know what their motivation is or what their interest in this is. And I'm concerned about the sanctity of a bidding process where an insider might come in and bid things up. Whether they intend to close or whether they don't intend to close, it could have an adverse effect on the other bidders and on the price. And it may increase it. But if it did increase it, it might increase it artificially.

Docket no. 12-1 at 16.

         Voltaire then twice challenged Judge King's ruling in a motion for reconsideration and a motion for authority to prosecute a limited objection to the sale hearing on behalf of the debtor. See In re: Tresha-Mob, LLC, No. ...


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