Case 6:12-bk-28006-MJ Doc 1673 Filed 10/01/15 Entered 10/01/15 20:41:05 Desc Main Document Page 1 of 38 PAUL R. GLASSMAN (State Bar No. 76536) 1 FRED NEUFELD (State Bar No. 150759) 2 STRADLING YOCCA CARLSON & RAUTH, P.C. 100 Wilshire Blvd., 4th Floor 3 Santa Monica, CA 90401 Telephone: (424) 214-7000 4 Facsimile: (424) 214-7010 E-mail: [email protected] 5 [email protected] 6 GARY D. SAENZ (State Bar No. 79539) 7 OFFICE OF THE CITY ATTORNEY 300 N. “D” STREET, Sixth Floor 8 San Bernardino, CA 92418 Telephone: (909) 384-5355 9 Facsimile: (909) 384-5238 10 E-mail: [email protected] Attorneys for Debtor and 11 Defendant City of San Bernardino 12 13 UNITED STATES BANKRUPTCY COURT CENTRAL DISTRICT OF CALIFORNIA 14 RIVERSIDE DIVISION 15 16 In re Case No. 6:12-bk-28006-MJ 17 CITY OF SAN BERNARDINO, Chapter 9 CALIFORNIA, 18 Debtor. RESPONSE OF CITY OF SAN BERNARDINO 19 TO OBJECTIONS TO CITY’S DISCLOSURE 20 STATEMENT WITH RESPECT TO PLAN OF ADJUSTMENT OF DEBTS 21 22 Hearing: 23 Date and Time: October 8, 2015, at 1:30 p.m. Place: Courtroom 301 24 3420 Twelfth Street Riverside, CA 92501-3819 25 26 27 28 STRADLING YOCCA CARLSON & RAUTH LAWYERS S ANTA MONICA DOCSSM/3019002v6/200430-0003 Case 6:12-bk-28006-MJ Doc 1673 Filed 10/01/15 Entered 10/01/15 20:41:05 Desc Main Document Page 2 of 38 1 TABLE OF CONTENTS 2 Page(s) 3 I. INTRODUCTION ...............................................................................................................1 4 II. REQUESTS FOR ADDITIONAL DISCLOSURE .............................................................3 5 A. The Treatment of Personal Injury and Bodily Injury Claims Under the Plan ..........................................................................................................................3 6 B. The Settlements and New Contracts with the International Union of 7 Operating Engineers and the San Bernardino Police Officers Association .............4 8 C. Savings Associated With Proposed Delivery of Fire Suppression and Emergency Medical Services by the County Fire District ................................5 9 D. Treatment of Employee Accrued Leave Claims ......................................................7 10 E. Restricted Funds; Accounts Receivable; City Contracts .........................................7 11 F. The Treatment of CalPERS Under the Plan ............................................................8 12 G. Maintenance of Cash Reserves ................................................................................8 13 H. Questions Regarding the Baseball and Soccer Stadiums and the Golf 14 Course ......................................................................................................................9 15 I. Other City Owned Properties .................................................................................11 16 J. Street and Road Repairs .........................................................................................11 17 K. Efforts to Cut Costs of Operations, Raise Revenues and Improve City Services; Charter Reform .........................................................13 18 III. OBJECTIONS THAT THE PLAN IS NOT CONFIRMABLE ........................................15 19 A. Administrative Claims ...........................................................................................15 20 B. Plan Injunction re Indemnified Parties ..................................................................16 21 C. Unfair Discrimination ............................................................................................18 22 D. Good Faith .............................................................................................................21 23 IV. OTHER ISSUES RAISED IN THE OBJECTIONS .........................................................23 24 V. CONCLUSION ..................................................................................................................25 25 26 27 28 STRADLING YOCCA CARLSON & RAUTH LAWYERS S ANTA MONICA DOCSSM/3019002v6/200430-0003 i City Response re Disclosure Statement Objections Case 6:12-bk-28006-MJ Doc 1673 Filed 10/01/15 Entered 10/01/15 20:41:05 Desc Main Document Page 3 of 38 1 TABLE OF AUTHORITIES 2 Page(s) CASES 3 Agarwal v. Pomona Valley Med. Group, Inc. (In re Pomona Valley Medical Group, Inc.), 4 476 F.3d 665 (9th Cir. 2007) ...................................................................................................19 5 Brinkley v. Chase Manhattan Mortg. & Realty Trust (In re LeBlanc), 6 622 F.2d 872 (5th Cir. 1980) ...................................................................................................20 7 Deutsche Bank AG, London Branch v. Metromedia Fiber Network, Inc. (In re Metromedia Fiber Network, Inc)., 8 416 F.3d 136 (2d Cir. 2005).....................................................................................................17 9 Dionne Smith-Downs v. City of Stockton, 2012 U.S. Dist. LEXIS 109181 (E.D. Cal. 2012) ......................................................................3 10 11 Fano v. Newport Heights Irrigation District, 114 F.2d 563 (9th Cir. 1940) ....................................................................................................22 12 Gilman v. Cont’l Airlines (In re Cont’l Airlines), 13 203 F.3d 203 (3d Cir. 2000).....................................................................................................17 14 In re Airadign Commc’ns, Inc., 519 F.3d 640 (7th Cir. 2008) ...................................................................................................17 15 16 In re American Hardwoods, Inc., 885 F.2d 621 (9th Cir. 1989) ...................................................................................................18 17 In re Aztec Co., 18 107 B.R. 585 (Bankr. M.D. Tenn. 1989) .................................................................................20 19 In re Barnwell Cnty. Hosp., 471 B.R. 849 (Bankr. D. S.C. 2012) ........................................................................................21 20 In re City of Stockton, 21 484 B.R. 372 (Bankr. E.D. Cal 2012) ..................................................................................3, 17 22 In re City of Vallejo, 23 403 B.R. 72 (Bankr. E.D. Cal. 2009) .......................................................................................16 24 In re Corcoran Hosp. Dist., 233 B.R. 449 (Bankr. E.D. Cal. 1999) ...............................................................................20, 23 25 In re Corcoran Irr. Dist., 26 27 F. Supp. 322 (S.D. Cal. 1939) .............................................................................................23 27 In re Crawford, 28 324 F.3d 539 (7th Cir. 2003) ...................................................................................................20 STRADLING YOCCA CARLSON & RAUTH LAWYERS S ANTA MONICA DOCSSM/3019002v6/200430-0003 ii City Response re Disclosure Statement Objections Case 6:12-bk-28006-MJ Doc 1673 Filed 10/01/15 Entered 10/01/15 20:41:05 Desc Main Document Page 4 of 38 In re Dow Corning Corp., 1 280 F.3d 648 (6th Cir. 2002) ....................................................................................................17 2 In re New York City Off-Track Betting Corp., 3 434 B.R. 131 (Bankr. S.D.N.Y. 2010) .....................................................................................16 4 In re Richmond Sch. Dist., 133 B.R. 221 (Bankr. N.D. Cal. 1991) ....................................................................................20 5 In re Seaside Eng’g & Surveying, Inc., 6 780 F.3d 1070 (11th Cir. 2015) ...............................................................................................17 7 In re Simmons, 8 288 B.R. 737 (Bankr. N.D. Tex. 2003) ....................................................................................20 9 In re Stella, 2006 Bankr. LEXIS 1980 (Bankr. D. Idaho June 28, 2006) ....................................................20 10 In re Valley Health Sys., 11 429 B.R. 692 (Bankr. C.D. Cal. 2010) .....................................................................................16 12 MacArthur Co. v. Johns-Manville Corp., 13 837 F.2d 89 (2d Cir. 1988).......................................................................................................17 14 Menard-Sanford v. Mabey (In re A.H. Robins Co.), 880 F.2d 694 (4th Cir. 1989) ...................................................................................................17 15 Nat’l Heritage Found., Inc. v. Highbourne Found., 16 760 F.3d 344 (4th Cir. 2014) ...................................................................................................17 17 Newhouse v. Corcoran Irrigation District, 114 F.2d 690 (9th Cir. 1940) .......................................................................................11, 22, 23 18 19 Orion Pictures Corp. v. Showtime Networks (In re Orion Pictures Corp.), 4 F.3d 1095 (2d Cir. 1993).......................................................................................................19 20 Securities and Exchange Commission v. Drexel Bunham Lambert Group, Inc. (In re 21 Drexel Burnham Lambert Group, Inc.), 960 F.2d 285 (2d Cir. 1992).....................................................................................................17 22 Silver Sage Partners, Ltd. v. City of Desert Hot Springs (In re City of Desert Hot 23 Springs), 24 339 F.3d 782 (9th Cir. 2003) ...................................................................................................11 25 Underhill v. Royal, 769