In re Orange County Nursery, Inc.

SUPPLEMENTAL MEMORANDUM OF OPINION ON MOTION OF THE MINORITY VOTING TRUST TO RECONSIDER TREATMENT AND VALUE OF ITS CLAIM RE: SUBORDINATION AND PRIORITY [DOCKET 652]

This motion arises from a dissolution action of the debtor corporation Orange County Nursery, Inc. (hereafter, “Debt- or”). 1 Pursuant to Cal. Corp.Code § 2000, on November 21, 2008, after extensive litigation, the Superior Court valued the Minority Voting Trust’s (hereafter “Minority”) 40.25% equity interest in the Debtor at $4,906,475 as of August 4, 2006, plus interest to the date of judgment for a total of $5,249,928 (the “Superior Court Order”). The Superior Court Order also provided that the Debtor could either pay that amount to the Minority or liquidate. This ruling was appealed by a voting trust holding 50.25 percent of the Debtor (the “Majority”).

The Majority failed to obtain a stay of the Superior Court Order from the Court of Appeal and on January 22, 2009, just before the deadline to pay the $5,249,928 value (hereafter, the “Judgment”), the Debtor filed this bankruptcy case. The Minority filed claim # 73 on May 14, 2009, asserting a liquidated total of $6,008,424.75 ($5,249,928 per the Superior Court…