Barbaccia

MEMORANDUM **

We affirm for the following reasons:

1. We have held that, under California law, a foreclosure can be set aside if the price paid at foreclosure was grossly inadequate and there was an even slight irregularity or unfairness in the foreclosure. In re Worcester, 811 F.2d 1224 , 1228 (9th Cir.1987). Worcester notes that California law imposes an additional requirement that the party seeking to set aside the foreclosure made a viable tender of payment of the indebtedness owing. Id. at 1280. GPI did not establish a grossly inadequate price. We reject GPI’s theory that the fee simple and leasehold estates “merged,” and that Barbaccia was therefore required to pay at foreclosure the value of the property without the long-term lease. GPI points to no authority persuading us that in these circumstances Barbaccia was required to pay vastly more at foreclosure than any other bidder because of the fortuity of holding the lease on the property. We also disagree with GPI to the extent that it argues that the gross inadequacy calculation should consider only the cash exchanged at foreclosure and ignore the encumbrances on the property. We further note that the bankruptcy court’s…