JSJF Corp. v. Wall Street Plaza, LLC (In re JSJF Corp.)

MEMORANDUM **

JSJF Corporation (“JSJF”), a Chapter 11 petitioner in bankruptcy, appeals a judgment of the Bankruptcy Appellate Panel (“BAP”) which reversed a decision of the bankruptcy court in favor of JSJF. For the reasons stated by the BAP, we affirm its judgment, and remand the case to the bankruptcy court for further proceedings. See Wall St Plaza, LLC v. JSJF Corp. (In re JSJF Corp.), 344 B.R. 94 (9th Cir. BAP 2006).

Wall Street Plaza, LLC (“WSP”) obtained a California state court judgment against JSJF for $183,240.67 in damages for breach of the terms of a lease, the event that prompted JSJF to seek protection in bankruptcy. The controversy before the bankruptcy court involved two claims by WSP: one for attorneys’ fees (“Claim 11”) and an amended claim which added damages for breach of the lease (“Claim 20”). The bankruptcy court disallowed Claim 11 on the merits and, in effect, disallowed Claim 20 by denying leave *719 to amend Claim 11. The proposed decree closing the Chapter 11 bankruptcy case contained an admission by JSJF that if the bankruptcy court’s judgment were reversed, to the extent allowable, the claims would qualify for full payment under the Chapter 11…