Judge: Daniel S. Murphy, Case: 23STCV29250, Date: 2025-01-22 Tentative Ruling

Case Number: 23STCV29250    Hearing Date: January 22, 2025    Dept: 32

BACKGROUND

            On November 30, 2023, Plaintiff U.S. Bank Trust Company, as trustee for Velocity Commercial Capital Loan Trust 2022-5, filed this action against Defendant Los Angeles Hostel, LLC for (1) judicial foreclosure, (2) assignment of rents, (3) appointment of receiver, (4) right to inspect, and (5) injunctive relief.

            On May 1, 2024, the Court granted the parties’ stipulation to the appointment of Kevin Singer as receiver of the subject property and for the imposition of a permanent injunction.

            On August 21, 2024, the Court granted Plaintiff’s motion to authorize the sale of receivership property.

            On December 24, 2024, receiver Kevin Singer filed the instant motion to confirm the sale. There is no opposition.

LEGAL STANDARD

“The receiver has, under the control of the Court, power to bring and defend actions in his own name, as receiver; to take and keep possession of the property, to receive rents, collect debts, to compound for and compromise the same, to make transfers, and generally to do such acts respecting the property as the Court may authorize.” (Code Civ. Proc., § 568.) “A receiver may, pursuant to an order of the court, sell real or personal property in the receiver’s possession upon the notice and in the manner prescribed by Article 6 (commencing with Section 701.510) of Chapter 3 of Division 2 of Title 9.” (Id., § 568.5.)

“[T]he court has full power to order the receiver to dispose of property in such a manner as the court may deem to be for the best interest of the parties concerned and the advice of the receiver and his opinion in regard to the value of the property, the manner, time and place of its disposition are entitled to great respect and weight.” (People v. Riverside University (1973) 35 Cal.App.3d 572, 583.) “Generally speaking if no good reason appears for refusing to confirm a receiver’s sale, such as chilling of bids or other misconduct or gross inadequacy of price, the sale should be confirmed.” (Id. at p. 582.)

“A court of equity has the power to order the sale of property free and clear of liens and encumbrances.” (City of Riverside v. Horspool (2014) 223 Cal.App.4th 670, 684.) A court may “tailor the method of sale of receivership property to the circumstances before it,” which includes “authoriz[ing] the sale of property free and clear of all liens and encumbrances.” (County of Sonoma v. Quail (2020) 56 Cal.App.5th 657, 684, 687.)

DISCUSSION

            The receiver has contracted with a buyer for $1,325,000. (Singer Decl. ¶ 1.) This was the best and highest price attainable. (Id., ¶ 5.) The Court will oversee an overbid hearing to determine the best offer before confirming the sale. (See id., ¶¶ 7-10.)

Because the contract price of $1,325,000 is insufficient to cover the lien amount of $1,687,500, the receiver additionally requests the Court to strip the lien and confirm the sale free and clear. (Singer Decl. ¶¶ 3, 11.) The receiver has demonstrated through uncontradicted evidence that the highest attainable price is $1,325,000. Because this is insufficient to satisfy the lien in full, stripping the lien is warranted in this case. (See City of Riverside, supra, 223 Cal.App.4th at p. 684; County of Sonoma, supra, 56 Cal.App.5th at pp. 684, 687.)

CONCLUSION

            Receiver Kevin Singer’s motion is GRANTED. Overbid hearing is set for January 22, 2025 at 8:30am. The subject property shall be sold free and clear, with the proceeds (minus relevant fees and costs) applied to repayment of the loan.