Case 6:12-bk MJ Doc 40 Filed 11/13/12 Entered 11/13/12 15:33:36 Desc Main Document Page 1 of 15

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1 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of Robert P. Goe - State Bar No. 0 Elizabeth A. LaRocque State Bar No. GOE & FORSYTHE, LLP Von Karman Avenue, Suite Irvine, CA rgoe@goeforlaw.com elarocque@goeforlaw.com Telephone: () -0 Facsimile: () - Attorneys for Howard Grobstein, Chapter Trustee UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA RIVERSIDE DIVISION 0 In re: OUTDOOR RESORTS RANCHO CALIFORNIA, INC, Debtor. Case No. :-bk--mj Chapter Proceeding Case filed March, 0 CHAPTER TRUSTEE S NOTICE OF MOTION AND MOTION FOR AN ORDER EXTENDING TIME TO ASSUME OR REJECT UNEXPIRED LEASES AND EXECUTORY CONTRACTS, IF ANY, PURSUANT TO U.S.C. SECTION ; MEMORANDUM OF POINTS AND AUTHORITIES AND DECLARATION OF ROBERT P. GOE IN SUPPORT THEREOF Hearing: Date: December, 0 Time: :00 a.m. Courtroom: 0 TO THE HONORABLE MEREDITH A. JURY, UNITED STATES BANKRUPTCY JUDGE AND ALL INTERESTED PARTIES: Howard Grobstein, chapter trustee ( Trustee ) for the bankruptcy estate of Outdoor Resorts Rancho California, Inc. ( Debtor ) hereby files his Motion for an Order Extending Time

2 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of 0 to Assume or Reject Unexpired Leases and Executory Contracts, If Any, Pursuant to U.S.C. Section for a period of days through June, 0 ( Motion ). This Motion is based upon the attached declaration of Robert P. Goe ( Goe Declaration ) and all evidence submitted in support at the hearing. The Motion will be heard on December, 0 at :00 A.m. in Courtroom 0 of the United States Bankruptcy Court located at 0 Twelfth Street, Riverside, CA 0. IF YOU DO NOT OPPOSE THE MOTION, YOU NEED TAKE NO FURTHER ACTION. HOWEVER, IF YOU OBJECT TO THE RELIEF REQUESTED BY THE MOTION, PURSUANT TO LOCAL BANKRUPTCY RULE 0-, YOU MUST SERVE AND FILE A WRITTEN OBJECTION WITH THE CLERK OF THE BANKRUPTCY COURT AND SERVE SUCH WRITTEN OBJECTION UPON THE DEBTOR TO WHOSE MOTION THE OBJECTION IS BEING FILED, AT THE ADDRESS SET FORTH BELOW, AND UPON THE OFFICE OF THE UNITED STATES TRUSTEE LOCATED AT 0 UNIVERSITY AVENUE, SUITE 0, RIVERSIDE, CA 0. OBJECTIONS MUST BE SERVED AND FILED NO LATER THAN FOURTEEN () DAYS PRIOR TO THE DATE SET FOR HEARING AS INDICATED ABOVE. YOU MUST FILE YOUR OPPOSING PAPERS AND PROOF OF SERVICE THEREOF WITH THE CLERK OF THE UNITED STATES BANKRUPTCY COURT LOCATED AT 0 TWELFTH STREET, RIVERSIDE, CA 0. ANY FAILURE TO TIMELY FILE AND SERVE ANY SUCH OBJECTIONS MAY RESULT IN ANY SUCH OBJECTIONS BEING WAIVED. FOR FURTHER INFORMATION, SEE LOCAL BANKRUPTCY RULF 0-. DATED: November, 0 Respectfully submitted by, GOE & FORSYTHE, LLP By: /s/robert P. Goe Robert P. Goe Attorneys for Howard Grobstein, Chapter Trustee The Trustee files this Motion out of an abundance of caution and does not concede that Debtor has any unexpired leases or executory contracts.

3 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of 0 I. STATEMENT OF FACTS A. The Bankruptcy Filing On October, 0, Debtor filed a voluntary chapter petition for relief. In the Statement of Financial Affairs ( SOFA ), Debtor alleges that it was engaged in the development, rental and eventual sale of recreational vehicle vacation lots. Debtor s business model was to procure land and develop the RV resort and then sell the individual RV lots to individual owners. Pursuant to the CC&Rs, Rancho California RV Resort Owners Association ( HOA ) was formed. Debtor completed and sold out of the planned phases. B. Debtor s Property Debtor s Schedule A lists four () pieces of real property owned by the Debtor with a combined claimed value of $,,000. The property consists of the following: Highway South, Aguanga, CA (the Resort Property ); Pato Frio Road, Aguanga, CA, which is a. acre parcel outside the Resort Property with a mobile home on it; Pato Frio Road, Aguanga, CA, which is a. acre parcel outside the Resort Property with a mobile home on it; and 0 Oropeza Lane, Aguanga, CA, which is a acre vacant parcel outside the Resort Property. The Trustee has started his due diligence on the assets of the estate, which he intends to sell to the highest bidder. It appears that the Resort Property contains a number of parcels owned by the Debtor, which includes, but are not limited to, the large clubhouse, a maintenance area, 00 acres of mountain property, acres which were for the build-out of the final phases and, green belts and entry roads. As set forth on Debtor s Schedule G (Exhibit to the Goe Declaration), there are potential rental revenue sources, as follows: Rent of $00 per month from AT&T for a cellular tower lease; Rent of $00 per month from Pamela and Jason Herbert for operation of a café;

4 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of Rent of $0 per month from Pamela and Jason Herbert for the operation of a commercial building; and 0 Rent from a storage facility. Purported executory contracts and unexpired leases on Schedule G are all Debtor has scheduled but out of an abundance of caution Trustee files this Motion to extend the time to assume or reject same, if any. C. The HOA Litigation On April, 0, the HOA filed its Third Amended Complaint for, among other things, construction defects in the Riverside County Superior Court entitled Rancho California RV Resort Owners Association v. Outdoor Resorts of America, Inc. and Outdoor resorts Rancho California, Inc.; Case No. RIC (the State Court Action ). On August, 0, the HOA filed a second complaint for, among other things, access to certain of Debtor s Property in the Riverside Superior Court entitled Rancho California RV Resort Owners Association v. Outdoor Resorts Rancho California; Case No. RIC (the Second State Court Action ). On October, 0, the HOA filed a Motion for Relief from Stay whereby it was only seeking recovery in the State Court Action, if any, against Debtor s insurance and would waive any deficiency against Debtor or estate property. This motion was withdrawn by the HOA on October, 0. On October, 0, the HOA filed a second stay motion, which did not limit its efforts to collect against the insurance only, but is also seeking judgment against the Debtor, among others. The Trustee has opposed this Motion. On November, 0, the Trustee filed Notice of Removals of both the State Court Action and the Second State Court Action. D. The HOA Relationship Debtor, as developer of the Resort Property, built many amenities, which are on separate and distinct parcels, which are located generally north of the phase and phase improvements. These other amenities include a clubhouse, a swimming pool, which is adjacent to the clubhouse, and tennis courts. The other amenities are not included in any phases of the

5 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of 0 development and have not been conveyed to the HOA. Debtor owns these improvements which were specifically included in the California Department of Real Estate ( DRE ) Public Report to advise all owners that they are owned by the Debtor. Debtor entered with the HOA the Recreation Facilities Use and Maintenance Agreement for Outdoor Resorts Rancho California ( Use Agreement ). The Use Agreement was a requirement of the DRE when Debtor applied to the DRE to obtain an amended and renewed Final Subdivision Public Report so Debtor could sell the remaining units in phase. The Use Agreement states in paragraph (e) of the Recitals that certain recreational facilities include a clubhouse, a swimming pool, which is adjacent to the clubhouse, and tennis courts, which are situated in Components C of the Condominium Plan. The Use Agreement requires Debtor to convey the aforementioned recreational facilities to the HOA by no later than (a) the date of the close of escrow on the sale of the first unit in phase, (b) December, 0, (c) or 0 days following the date that Debtor advises the HOA of its election to convey title to the recreation facilities. Furthermore, unit U-00, U-00 and U-00 on Component C- in phase of the Condominium Plan provides that the Debtor has retained for its own use a paved parking area, a restaurant, office space, a copy room, a lake, and a recreational area. In the phase DRE Public Report there are certain License Agreements referenced that were entered into by Debtor and the HOA. One of the License Agreements referenced are for wells. Another License Agreement referenced on page of of the DRE Public Report for phase states that Debtor has entered into a License Agreement with the HOA that grants the HOA members the right to use amenities/recreational building, swimming pool, spa and other recreational facilities located on a parcel which may be annexed in a later phase of the Resort Project. The HOA members have a nonexclusive right to access and the right to utilize the amenities in addition to those included in the common areas of phase. The HOA has the exclusive obligation to maintain the common Resort Property and the facilities in the common area. The CC&Rs and Exhibit B identify what is the legal description of common area, which are basically attachments of the Condominium Plan, Components A-,

6 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of 0 A- and C-C. There is also a nonexclusive easement for ingress and egress to the Resort Property. In, the County of Riverside approved a Conditional Use Permit ( CUP ), which allowed the expansion of the Resort Property. The expansion increased the number of allowed recreational vehicle spaces from to on acres. The expansion also allowed for an - hole golf course, a 0,000 square foot clubhouse, in addition to the clubhouse that had already been built, a swimming pool, tennis courts, and bath houses scattered throughout the Resort Property. The original Condominium Plan for phase identifies number as common area, which would be parking, office space and copy room located within the clubhouse. The surface area of the office space is,. feet. It also provides for common area to be a lake, in item, and shuffle board area and horseshoes recreation area in item. Furthermore, the administrative office parking and staging area for the sales of the condo units are owned by Debtor as well as the acre parcel west of the Resort Project, the mobile home lots, which are. acres each, and acres of surplus land. Debtor further owns the maintenance area, which is the subject matter of the Second State Court Action alleging easements by the HOA to the maintenance area. E. The Potential Executory Contracts and Unexpired Leases As stated, this case was filed just over one month ago and the a meeting has not even been conducted. The Trustee has obtained substantial documents from Debtor and attempted to determine what executory contracts or unexpired leases exist in addition to those set forth on Schedule G. Due to the short sixty (0) day timeframe provided for in Code Section (d)(), the Trustee files this Motion requesting an extension of time for days to assume or reject all of Debtor s executory contracts or unexpired leases, including, but not limited to, the following:. The Use Agreement with the HOA;. The CC&Rs recorded August 0,, and any extensions, amendments or modifications thereto;. The Articles and Bylaws of the HOA;

7 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of 0. The Usage Agreement with the HOA concerning the main clubhouse dated July, 0;. Well Site License Agreement between the Debtor and HOA, recorded October, ;. Recorded Condominium Plans for All Phases;. DRE Public Reports for All Phases;. All Conditional Use Permits;. Settlement and Mutual Release Agreement regarding Gnuse et al. v. Outdoor Resorts of America, Inc., et al., Case No. RIC, and related documents;. Any and all agreements with Pamela and Jason Herbert concerning the operation of the café including, but not limited to, the Restaurant Lease dated March, 0, and any amendments thereto;. Any and all agreements with Pamela and Jason Herbert concerning the operation of the convenience store;. Any and all agreements with AT&T or any other party related to the cellular phone tower including, but not limited to, the California Lease Agreement dated November, 00, First Amendment thereto, and Memorandum of Lease recorded September, 0 between Debtor and New Cingular Wireless PCS LLC; and. Any and all policies of insurance including, but not limited to, any and all liability policies and the policies covering the State Court Action and the Second State Court Action, and title insurance policies. II. MEMORANDUM OF POINTS AND AUTHORITIES A. Section Allows For An Extension of Time for The Chapter Trustee to Assume or Reject Unexpired Leases or Executory Contracts. Bankruptcy Code Section provides as follows: (d)() In a case under chapter of this title, if the trustee does not assume or reject an executory contract or unexpired lease of residential real property or

8 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of of personal property of the debtor within 0 days after the order for relief, or within such additional time as the court, for cause, within such 0-day period, fixes, then such contract or lease is deemed rejected. As set forth above, the case was just filed on October, 0, and the Trustee has 0 days to assume or reject or seek an extension of time to assume or reject executory contracts and unexpired leases. Sixty (0) days expires on December, 0; thus this Motion is timely filed. The Trustee respectfully requests that he has established cause by his diligence in pursuing this matter to grant a day extension for the time to assume or reject. 0 DATED: November, 0 Respectfully submitted by, GOE & FORSYTHE, LLP By: /s/robert P. Goe Robert P. Goe Attorneys for Howard Grobstein, Chapter Trustee

9 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of 0 DECLARATION OF ROBERT P. GOE I, Robert P. Goe, do hereby declare: I am a partner in the law firm of Goe & Forsythe, LLP, proposed counsel for Howard Grobstein, the Chapter trustee of the Outdoor Resorts Rancho California, Inc. s ( Debtor ) bankruptcy proceeding. I have personal knowledge of the facts alleged herein and if called upon as a witness, I could and would competently testify thereto. I make this declaration in support of the Trustee s Motion to Extend Time to Assume or Reject Unexpired Leases or Executory Contracts, If Any ( Motion ).. On October, 0, Debtor filed a voluntary chapter petition for relief.. In the Statement of Financial Affairs ( SOFA ), Debtor alleges that it was engaged in the development, rental and eventual sale of recreational vehicle vacation lots. Debtor s business model was to procure land and develop the RV resort and then sell the individual RV lots to individual owners. Pursuant to the CC&Rs, Rancho CA RV Resort Owners Association ( HOA ) was formed. Debtor completed and sold out of the planned phases.. Debtor s Schedule A lists four () pieces of real property owned by the Debtor with a combined claimed value of $,,000. The property consists of the following: Highway South, Aguanga, CA (the Resort Property ); Pato Frio Road, Aguanga, CA, which is a. acre parcel outside the Resort Property with a mobile home on it; Pato Frio Road, Aguanga, CA, which is a. acre parcel outside the Resort Property with a mobile home on it; and 0 Oropeza Lane, Aguanga, CA, which is a acre vacant parcel outside the Resort Property.. It appears that the Resort Property contains a number of parcels owned by the Debtor, which includes, but are not limited to, the large clubhouse, a maintenance area, 00 acres of mountain property, acres which were for the build-out of the final phases and, green belts and entry roads.

10 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of. As set forth on Debtor s Schedule G List of Executory Contracts and Unexpired Leases, attached hereto as Exhibit, there are potential rental revenue sources, as follows: Rent of $00 per month from AT&T for a cellular tower lease; Rent of $00 per month from Pamela and Jason Herbert for operation of a café; Rent of $0 per month from Pamela and Jason Herbert for the operation of a commercial building; and Rent from a storage facility 0. The purposed executory contracts and unexpired leases are all Debtor has scheduled but out of an abundance of caution Trustee files this Motion to extend time to assume or reject all of Debtor s executory contracts or unexpired leases regardless of whether set forth on Schedule G.. On October, 0, the Trustee obtained an Order on his emergency motion allowing him to operate the Debtor s business as he believes is necessary for the best interest of the estate, and in order for the liquidation of the estate assets.. On April, 0, the HOA filed its Third Amended Complaint for, among other things, construction defects in the Riverside County Superior Court entitled Rancho California RV Resort Owners Association v. Outdoor Resorts of America, Inc. and Outdoor resorts Rancho California, Inc.; Case No. RIC (the State Court Action ).. On August, 0, the HOA filed a second complaint for, among other things, access to certain of Debtor s Property in the Riverside Superior Court entitled Rancho California RV Resort Owners Association v. Outdoor Resorts Rancho California; Case No. RIC (the Second State Court Action ).. On October, 0, the HOA filed a Motion for Relief from Stay whereby it was only seeking recovery in the State Court Action, if any, against Debtor s insurance and would waive any deficiency against Debtor or estate property. That motion was withdrawn by the HOA on October, 0.

11 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of 0. On October, 0, the HOA filed a second stay motion, which did not limit its efforts to collect against the insurance only, but is also seeking judgment against the estate, among others. The Trustee has opposed this Motion.. On November, 0, the Trustee filed Notice of Removals of both the State Court Action and the Second State Court Action.. As stated, this case was filed just over one month ago and the a meeting has not even been conducted. The Trustee has obtained substantial documents from Debtor and attempted to determine what executory contracts or unexpired leases exist in addition to those set forth on Schedule G. Due to the short sixty (0) day timeframe provided for in Code Section (d)(), the Trustee files this Motion requesting an extension of time for days to assume or reject all of Debtor s executory contracts or unexpired leases, including, but not limited to, the following:. The Use Agreement with the HOA;. The CC&Rs recorded August 0,, and any extensions, amendments or modifications thereto;. The Articles and Bylaws of the HOA;. The Usage Agreement with the HOA concerning the main clubhouse dated July, 0;. Well Site License Agreement between the Debtor and HOA, recorded October, ;. Recorded Condominium Plans for All Phases;. DRE Public Reports for All Phases;. All Conditional Use Permits;. Settlement and Mutual Release Agreement regarding Gnuse et al. v. Outdoor Resorts of America, Inc., et al., Case No. RIC, and related documents;. Any and all agreements with Pamela and Jason Herbert concerning the operation of the café including, but not limited to, the Restaurant Lease dated March, 0, and any amendments thereto;

12 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of. Any and all agreements with Pamela and Jason Herbert concerning the operation of the convenience store;. Any and all agreements with AT&T or any other party related to the cellular phone tower including, but not limited to, the California Lease Agreement dated November, 00, First Amendment thereto, and Memorandum of Lease recorded September, 0 between Debtor and New Cingular Wireless PCS LLC; and. Any and all policies of insurance including, but not limited to, any and all liability policies and the policies covering the State Court Action and the Second State Court Action, and title insurance policies. I declare under penalty of perjury under the laws of the United States of America that the foregoing is true and correct. Dated: November, 0 By: /s/robert P. Goe Robert P. Goe 0

13 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of EXHIBIT EXHIBIT

14 }bk{scheduleg-executorycontractsandunexpiredleases}bk{ Case :-bk--mj Doc 0 Filed /0/ // Entered /0/ //::0 :: Desc Main Document Page of 0 BG (Official Form G) (/0) In re Outdoor Resorts Rancho California, Inc. Debtor, Case No. SCHEDULE G - EXECUTORY CONTRACTS AND UNEXPIRED LEASES Describe all executory contracts of any nature and all unexpired leases of real or personal property. Include any timeshare interests. State nature of debtor's interest in contract, i.e., "Purchaser", "Agent", etc. State whether debtor is the lessor or lessee of a lease. Provide the names and complete mailing addresses of all other parties to each lease or contract described. If a minor child is a party to one of the leases or contracts, state the child's initials and the name and address of the child's parent or guardian, such as "A.B., a minor child, by John Doe, guardian." Do not disclose the child's name. See, U.S.C. and Fed. R. Bankr. P. 0(m). Check this box if debtor has no executory contracts or unexpired leases. Name and Mailing Address, Including Zip Code, of Other Parties to Lease or Contract Description of Contract or Lease and Nature of Debtor's Interest. State whether lease is for nonresidential real property. State contract number of any government contract. AT&T Payment Center Sacramento, CA -000 Pamela & Jason Herbert PO Box Murrieta, CA Pamela & Jason Herbert PO Box Murrieta, CA Cellular phone tower on property, monthly lease is $00 Space rent in commercial building for operating a cafe, rent is $00 per month Space rent in commercial building to operate a convenience store, rent is $0 per month 0 continuation sheets attached to Schedule of Executory Contracts and Unexpired Leases Software Copyright (c) -0 - CCH INCORPORATED - EXHIBIT "" PAGE Best Case Bankruptcy

15 Case :-bk--mj Doc 0 Filed // Entered // :: Desc Main Document Page of PROOF OF SERVICE OF DOCUMENT I am over the age of and not a party to this bankruptcy case or adversary proceeding. My business address is: Von Karman Avenue, Suite, Irvine, CA A true and correct copy of the foregoing document entitled (specify): CHAPTER TRUSTEE S NOTICE OF MOTION AND MOTION FOR AN ORDER EXTENDING TIME TO ASSUME OR REJECT UNEXPIRED LEASES AND EXECUTORY CONTRACTS, IF ANY, PURSUANT TO U.S.C. SECTION ; MEMORANDUM OF POINTS AND AUTHORITIES AND DECLARATION OF ROBERT P. GOE IN SUPPORT THEREOF will be served or was served (a) on the judge in chambers in the form and manner required by LBR 00-(d); and (b) in the manner stated below:. 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) November, 0, 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 addresses stated below: Steven A Alpert steven@pricelawgroup.com, notice@pricelawgroup.com Robert P Goe kmurphy@goeforlaw.com, rgoe@goeforlaw.com;mforsythe@goeforlaw.com Howard B Grobstein (TR) hbgtrustee@crowehorwath.com, hgrobstein@ecf.epiqsystems.com Gregory J Soldner janavice@morrissullivanlaw.com United States Trustee (RS) ustpregion.rs.ecf@usdoj.gov Service information continued on attached page 0. SERVED BY UNITED STATES MAIL: On (date) November, 0, 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 hours after the document is filed. Mark Uremovich Morris, Sullivan & Lemkul, LLP Mira Mesa Blvd., Suite 00 San Diego, CA Matthew Mark Haffner Haffner Haffner & Kirwain E. Main Street Ventura, CA 00 Service information continued on attached page. SERVED BY PERSONAL DELIVERY, OVERNIGHT MAIL, FACSIMILE TRANSMISSION OR (state the method for each person or entity served): Pursuant to F.R.Civ.P. and/or controlling LBR, on (date) November, 0, 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 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 hours after the document is filed. The Honorable Meredith A. Jury USBC, 0 Twelfth Street, Riverside, CA 0 (Hand delivered) 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. November, 0 Susan C. Stein /s/susan C. Stein Date Printed Name Signature