TBH19 secured creditor DBD Credit objects to cash collateral motion

By Sarah Lizee

Olympia, Wash., Jan. 8 – TBH19 LLC’s motion for continued use of cash collateral to pay expenses through April 30 drew an objection Thursday from secured creditor DBD Credit Funding LLC, according to filing with the U.S. Bankruptcy Court for the Central District of California.

DBD claims the debtor has not met its burden demonstrating that DBD’s interest in the cash collateral is adequately protected.

“In addition to this failure to meet the statutory standard, the motion also demonstrates a disturbing lack of candor with the court,” DBD added in its objection.

Leonard Ross, the principal of the debtor, submitted a declaration in support of the motion, but also recently filed pleadings with the Superior Court of the State of California indicating that he is “physically impaired and requires a respite before continuing the adjudications of the claims in the state court proceedings and the bankruptcy proceeding,” DBD said.

“On this basis, Mr. Ross is asking the state court to toll all of the deadlines in the state and bankruptcy courts until February, including being excused from any deposition until six months after the proposed tolling agreement’s effective date.”

TBH19 makes no mention of the state court pleadings, Ross’ inability to participate in the bankruptcy process, or how the debtor intends to discharge its obligations in the interim in the motion or any of the supporting declarations, DBD said.

“Mr. Ross’ impairment, and failure to disclose that impairment to this court, is another reason why the Chapter 11 case should be converted and an independent fiduciary put in place to liquidate the estate’s assets,” the creditor said.

DBD also claims that the motion contains an improper request to borrow, referencing the $100,000 “liquidity advance” from Ross’ former spouse.

“It is unclear whether this ‘advance’ is to be made to Mr. Ross personally, which he will then contribute to the debtor as an equity infusion; or whether the ‘advance’ is to be made directly from Ms. Rey to the debtor,” DBD said.

“Either way, this ambiguous and improper request to borrow does not comply with the requirements of section 364.”

A hearing is scheduled for Jan. 21.

TBH19 is a Los Angeles-based investment company. The company filed bankruptcy on Nov. 24, 2019 under Chapter 11 case number 19-23823.

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