In Re Lpm Corporation, Debtor, Kir Temecula v. Lpm Corporation Minson Corporation North County Bank Gerald H. Davis United States Trustee

I. Background

LPM Corporation operated a chain of over 40 retail stores known as La Jolla Pool & Mattress. One of the stores was located on property leased from Kir Teme-cula. In January 2000, LPM filed a chapter 11 petition. After doing so, LPM failed to pay the rent. On March 20, 2000, Kir Temecula, pursuant to 11 U.S.C. § 365 (d)(3), moved the bankruptcy court for an order compelling LPM to pay all post-petition rent and to surrender the leased premises.

On May 9, 2000, the bankruptcy court granted the motion. It ordered that the leased premises “is hereby deemed rejected” and it ordered LPM to surrender the premises. With respect to the rent, it ordered as follows:

After LPM paid only $10,000 of the amount ordered, Kir Temecula filed with the clerk of the bankruptcy court a request for a writ of execution, and served a notice of levy on LPM and its bank, North County Bank. On the same day the levy was served but before the levy was complete, LPM’s chapter 11 case was converted to a chapter 7. The bank froze the funds in the account sufficient to satisfy the levy, but refused to release the funds until further order of the court. Kir Temecula then moved the…