Orange County Nursery, Inc. v. Minority Voting Trust (In re Orange County Nursery, Inc.)

*694 ORDER RE BANKRUPTCY APPEAL

This matter is before the Court on appeal from the Bankruptcy Court’s November 15, 2012 and July 17, 2013 orders holding that the Minority Voting Trust’s claim is not subject to subordination under 11 U.S.C. § 510 (b). [Doc. # 16, Exhs. 1-4.] The Court deems this matter suitable for decision without oral argument. See Fed.R.Civ.P. 78(b); C.D. Cal. L.R. 8012-7. Having duly considered the parties’ written submissions, the Court now renders its decision. For the reasons set forth below, the judgment of the Bankruptcy Court is REVERSED.

I.

FACTUAL AND PROCEDURAL BACKGROUND

The Court previously set forth the factual and procedural history of this case in its October 12, 2010 order. See In re: Orange County Nursery, Inc., 439 B.R. 144 (C.D.Cal.2010). The Court recites here only the facts pertaining to this appeal and the procedural background since its prior order.

Orange County Nursery Inc., (“OCN”) is a closely held corporation run by the Veyna family. Its shareholders consist of the Minority Voting Trust, which holds 40.25% of OCN’s stock, and the Majority Voting Trust, which holds the remainder. (Id. at 146.) On August 4, 2006, the Minority filed…