1 NOT FOR PUBLICATION

2 POSTED TO THE WEBSITE 3 4 UNITED STATES BANKRUPTCY COURT 5 EASTERN DISTRICT OF CALIFORNIA 6 7 In re: Case No. 25-24089-A-7

8 OPEN RANGE PROPERTY, LLC, CZ-1

9 Memorandum Regarding Motion to Debtor. Vacate Order Converting Case from 10 Chapter 11 to Chapter 7 11 12

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14 15 Argued and submitted on November 3, 2025 16 at Sacramento, California 17 Honorable Fredrick E. Clement, Bankruptcy Judge Presiding 18

19 Parham Shekarlab for Debtor Open Range Property, LLC; 20 Appearances: Sharon Z. Weiss Attorney for Creditor U.S. Bank 21

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27 1 Chapter 11 debtor must file a list of equity security holders not 2 later than 14 days after the petition is filed. Fed. R. Bankr. P. 3 1007(a)(3). After three warnings and almost two months, the court 4 converted the case for failure to file that document. Debtor’s 5 counsel is “at a loss” to explain how this mistake occurred. The 6 debtor moves for relief under Rule 60(b). Should the court grant the 7 motion? 8 I. FACTS 9 Open Range Property LLC filed a skeletal Chapter 11 petition. 10 Pet., ECF No. 1. Paul A. Warner was counsel for the debtor in 11 possession. The petition indicates that Abolghassem Alizadeh is the 12 “manager” of the limited liability corporation. The “list of equity 13 security holders” was not filed. On the same day, the Clerk of the 14 Court issued a “Notice of Incomplete Filing.” Not. Incomplete Filing, 15 ECF No. 2. In the pertinent part of the list of deficient documents, 16 it provided: “The following document(s) must be received by the 17 bankruptcy clerk's office by 8/18/25...List − Equity Security 18 Holders[,] Master Equity Security Holder Address List...” Id. The 19 Notice of Incomplete Filing also warned that the failure to file the 20 documents in a timely manner or otherwise appropriately resolve the 21 delinquency, may result in dismissal. Id. The same notice also 22 provided creditors an opportunity to oppose dismissal. The notice 23 offered creditors the opportunity to oppose dismissal. Id. at p. 2. 24 The notice also provided: 25 THIS IS THE ONLY NOTICE YOU WILL RECEIVE. Failure to timely file the missing documents, to timely seek an extension of 26 time, or to timely file a Notice of Hearing on the Court's Notice of Intent to Dismiss Case may result in the 27 automatic dismissal of this bankruptcy case without further notice... 1 Id. 2 One week after the case was filed, creditor U.S. Bank availed 3 itself of the right to oppose dismissal, requested a hearing and filed 4 a 10-page brief in opposition to dismissal. Among other things, the 5 bank provided evidence of Abolghassem Alizadeh’s conviction of wire 6 fraud, bank fraud and false statements to a federally insured 7 institution, which included almost five years of prison and 8 $15,000,000 in restitution, and other bad acts intended to frustrate 9 creditors. 10 The Clerk of the Court issued an order convening a Chapter 11 11 Status Conference. Order, ECF No. 14. The order indicating that the 12 scope of the issues to be considered was broad and included “[a]ny 13 other matters which might materially affect the administration of this 14 chapter 11 case.” Id. (emphasis added). It warned, “This is notice 15 that the court may, sua sponte, at the status conference, order the 16 case dismissed or converted to chapter 7, or may order the appointment 17 of a chapter 11 trustee.” Id. 18 The schedules and statements were filed on the last day to do so. 19 Summary of Assets and Liabilities, Schedules A/B-H and Statement of 20 Financial Affairs. Schedules and Statements, ECF No. 17-22, 24. The 21 list of equity security holders was not filed. 22 About a month after the petition was filed, Open Range Property, 23 LLC substituted Cyrus Zal, in place of Paul A. Warner, as its attorney 24 of record. 25 Just short of two months after the petition, the court convened 26 the status conference and the hearing on the Clerk’s Notice of 27 Incomplete Filing. The court discussed the incomplete filing, viz., 1 explained that he only recently substituted into the case and asked 2 for a little more time to file the list of equity holders. The civil 3 minutes reflect the following resolution: 4 As more fully set forth on the record, 5 The prior attorney for this case did not file the List of Equity Security Holders and the Master Equity Security 6 Holder Address List as required. Since new counsel has been retained, the Court will drop this matter but requires the 7 lists to be filed by close of business Friday, September 26, 2025. Additionally, the Court requests that a notice of 8 the continued meeting of creditors be filed and served on all equity holders by the same deadline. 9 The Court will monitor for the filing of these required 10 documents. If Mr. Zal fails to comply by the deadline, the case will be converted without further notice or hearing. 11 Civ. Minutes, ECF No. 43. 12 Within the deadline set by the court the debtor-in-possession, 13 re-uploaded the creditors master address list, Fed. R. Bankr. P. 14 1007(a)(1), but not the list of equity security holders. Fed. R. 15 Bankr. P. 1007(a)(3). 16 Thereafter, the court converted this case to Chapter 7. 17

II. PROCEDURE

18 Open Range Property LLC moves for relief under Rule 60(b)(1) 19 (mistake, inadvertence, surprise of excusable neglect). In support of 20 the motion, the debtor offers the declaration of counsel, who admits 21 knowledge of the deadline but who is unable to explain the error. 22 I offer no excuse for failing in my duties as the Debtor's 23 attorney to file the two required documents, and I must confess that I am shocked and dismayed at how I could make 24 such a grievous and fundamental mistake that has greatly damaged the interests of my client to such a high degree. I 25 wish I could offer an explanation as to how I came to make such a damaging and inexplicable mistake, but I myself am 26 at a loss as to how I came to commit this mistake. 27 Zal. decl. 2:110-16, ECF No. 66. 1 III. JURISDICTION 2 This court has jurisdiction. 28 U.S.C. §§ 1334(a)-(b), 157(b); 3 see also General Order No. 182 of the Eastern District of California. 4 Jurisdiction arises under 11 U.S.C. §§ 348, 1112(b) and is core. 28 5 U.S.C. § 157(b)(2)(A), (O). 6 IV. LAW 7 A. Equity Security List 8 The equity security list is due not later than 14 days after the 9 petition. 10 Chapter 11--List of Equity Security Holders. Unless the court orders otherwise, a Chapter 11 debtor must, within 14 11 days after the order for relief is entered, file a list of the debtor's equity security holders by class. The list 12 must show the number and type of interests registered in each holder's name, along with the holder's last known 13 address or place of business. 14 Fed. R. Bankr. P. 1007(a)(3). 15 B. Rule 60(b) 16 Rule 60 applies to bankruptcy proceedings. Fed. R. Civ. P. 60, 17 incorporated by Fed. R. Bankr. P. 9024. In the pertinent part, it 18 provides: “On motion and just terms, the court may relieve a party or 19 its legal representative from a final judgment, order, or proceeding 20 for...mistake, inadvertence, surprise, or excusable neglect.” Fed. R. 21 Civ. P. 60(b)(1). 22 The party seeking relief bears the burden of proof. In re 23 Peralta, 317 B.R. 381 (9th Cir. BAP 2004), citing TCI Group Life Ins. 24 Plan v. Knoebber, 244 F.3d 691, 696 (9th Cir.2001). The court should 25 consider three factors: “(1) whether the defendant's culpable conduct 26 led to the default; (2) whether the defendant has a meritorious 27 defense; and (3) whether reopening the default judgment would In re Peralta 1 Cir. 2004), citing TCI, 244 F.3d at 695–96; Falk, 739 F.2d at 463. 2 V. DISCUSSION 3 The debtor has not sustained its burden of proof. First, 4 culpable conduct exits. In re Wilson, 349 B.R.831 (Bankr. D. Idaho 5 2006) (unjustified failure to check mail deemed culpable conduct). The 6 debtor and counsel received at least three warnings of the need to 7 file the list of equity security holders. Notice Incomplete Filing, 8 ECF No. 2; Hr’g on Notice of Incomplete Filing, September 22, 2205; 9 Civ. Minutes, ECF No. 43. Moreover, the list of equity security 10 holders was 43 days late, when the case was converted. While the 11 motion purportedly addresses the court’s oral warnings at the 12 September 22, 2025, hearing and the minutes emanating therefrom, it 13 fails to address the prior warning and the passage of time from the 14 filing of the case until the hearings. 15 While the motion to vacate the conversion order includes exhibits 16 that purports to cure the deficiency, Ex., ECF No. 68, and which 17 appear to reveal but a single shareholder, i.e., Abolghassem Alizadeh 18 (the manager who signed the petition), the later filing does not erase 19 the culpable conduct from which the default arose. 20 Second and more importantly, Open Range Property has not 21 sustained its burden of proof as to a meritorious defense. Where a 22 Chapter 11 case is converted to a Chapter 7 case and the debtor seeks 23 relief under Rule 60(b), the debtor must make some showing of a viable 24 plan. Peralta, 317 B.R. at 388 (meritorious defense). 25 It has not done so. The motion is supported by the declaration 26 of its manager and only shareholder, Abolghassem Alizadeh. The entire 27 declaration is less than one page and consists of four paragraphs. In 1 If this case remains a Chapter 7 bankruptcy, that would result in great harm to the Debtor and to a huge loss of 2 funds available to pay the creditors. I am currently close to putting together a reorganization plan wherein an 3 investor developer and builder would partner with the Debtor to construct a high value residence on the Debtor's 4 high value property consisting of bare land in an exclusive area of Granite Bay, where there are already residences 5 valued in the range of $6 Million to $10 Million. 6 Alizadeh decl. § 3, ECF No. 67 (emphasis added). 7 Finally, creditors, at least U.S. Bank, will be harmed. The bank 8 informs the court that its loan has been in default since October 9 2011. Not. Hr’g on Not. Intent to Dismiss 1:15-23, ECF No. 10. Open 10 Range Property LLC, who bears the burden of proof, does not dispute 11 this fact and, aside from a one sentence conclusion, has offered no 12 evidence that creditors would be better served in Chapter 11. 13 CONCLUSION 14 For each of these reasons, the motion will be denied. The court 15 will issue an order from chambers. 16 | Dated: November 03, 2025

18 Fredrick E. Clement 19 United States Bankruptcy Judge 20 21 22 23 24 25 26 27 28

1 Instructions to Clerk of Court

2 Service List - Not Part of Order/Judgment

3 The Clerk of Court is instructed to send the Order/Judgment or other court generated document transmitted herewith to the parties below. The Clerk of Court will send the document 4 via the BNC or, if checked ____, via the U.S. mail.

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6 Debtor(s) Attorney for the Debtor(s) (if any)

7 Bankruptcy Trustee (if appointed in the case) Office of the U.S. Trustee Robert T. Matsui United States Courthouse 8 501 I Street, Room 7-500 9 Sacramento, CA 95814 All Creditors 10

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