In re Arce Riverside, LLC

MEMORANDUM DECISION ON OBJECTION TO SECOND AMENDED CLAIM

I. INTRODUCTION

On September 1st and 2nd, 2015, the court conducted a trial on the Debtors’ Objection to the Second Amended Claim of Penn Equities, LLC, (“Penn”), and on September 3rd the court heard closing argument from counsel for the parties. At that point the matter was submitted for decision. The court then asked for further briefing on a discrete question, discussed, infra.

As explained below, the court will sustain the objection and enter an order disallowing the interest paid and ordering it repaid to Debtors (subject to possible offset); it will not award treble damages. Based upon this result, the court determines that the prevailing parties, Debtors, are entitled to an award of attorneys fees and costs, which should be the subject of a separate motion.

II. FACTS

George Arce (“Arce”) is the managing member of Debtor, Arce Riverside, LLC. *565 He is a California licensed real estate broker and salesperson. Neil Wachsberger (“Wachsberger”) is the managing member of Debtor, Kera Riverside, LLC. He is also a California licensed real estate broker. Arce Riverside, LLC and Kera Riverside, LLC at all material…