Schoenmann

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA 6 CARMEL FINANCING, LLC, Case No. 3:21-cv-07387-WHO

Appellant,

ORDER ON BANKRUPTCY APPEALS

v.

SCHOENMANN, Respondent.

Appellant and cross-respondent Carmel Financing, LLC (“Carmel”) loaned debtor Mayacamas Holdings LLC (“Mayacamas”) $2,000,000 to refinance its purchase of a parcel of land, secured by a deed of trust. Mayacamas entered bankruptcy proceedings and, soon after, the Tubbs Fire burned through the land. In these consolidated appeals, the parties challenge the Bankruptcy Court’s orders (1) finding that bankruptcy trustee E. Lynn Schoenmann (“the Trustee”) can use her “strong-arm” powers to avoid Carmel’s security interest in insurance proceeds from the fire, (2) dismissing the Trustee’s claim that certain default loan terms were unlawful, and (3) declining to award the Trustee’s attorney’s fees. The Bankruptcy Court’s judgment is affirmed in part, reversed in part, and remanded. I agree with the Bankruptcy Court that the Trustee can avoid Carmel’s…