El Cajon Brewing Company, Chapter 11

Hollaback Stout honies!

 

poor house requires headshots when applying. looking for quality right there

 

I think all breweries should require headshots for brewers. If they're not bearded or weird-looking enough, they should be tossed out the door.

 

is that how you got your new job? you do have a good beard!

 

A good time?

Seriously though, in Northern Nevada, the liquor, porno and firearms are all under the same roof!!!

 

So...I'm ready for this weeks installment of drama.

 

Ask, and ye shall receive: http://www.10news.com/news/el-cajon-brewing-company-struggling-with-bankruptcy

I'm not sure that the lien is even valid and doubt that the City of El Cajon would recover more than half of what is owed even if they do have a valid lien.

 

Are you inferring that the "loan" from the City is not a valid lien?

Kendrick said the owner has to pay back most of the $600,000. He told 10News the city will not lose money because the loan is secured by the equipment inside. He said it's worth more than the debt.

"The city could repossess the equipment and sell it on the open market or the city could lease it to the new vendor," said Kendrick. - See more at: http://www.10news.com/news/el-cajon-brewing-company-struggling-with-bankruptcy#sthash.9POW0Upd.dpuf

 

That's exactly what I am suggesting. The City filed a a motion for relief from the automatic stay to request permission to initiate legal proceedings to foreclose on the lien and take the equipment. I have copies of the loan documents and the lien, which are two separate things. There are some issues with the lien that might make it invalid.

 

I wonder wha the State will do about the 540K they've loaded out since the Redev agencies are all abolished.

 

That's difficult to say right now. The loan documents all state that the money came from the El Cajon Development Agency, but the lien is in favor of the City of El Cajon and that is what doesn't make sense to me. Maybe there's an agreement for the City to be the authorized agent for the state to collect the debt, but I didn't see anything in the court's file to say how El Cajon has standing to collect the debt.

 

Either way, the landlord has no right to the brewing equipment.

http://www.pillsburylaw.com/publications/californias-post-redevelopment-agency-landscape

Implementation of AB 26: What Happens Next?

Dissolution and Successor Agencies
All redevelopment agencies in California dissolved as of February 1, 2012. AB 26 provides for so-called "successor agencies" to wind down the affairs of the dissolved redevelopment agencies. AB 26 designates the city, county or city and county that authorized the creation of the former redevelopment agency as the successor agency. However, such local governmental body had the option of electing not to become the successor agency, in which case an applicable local agency (defined as "any city, county, city and county or special district in the county of the former redevelopment agency") could elect by resolution to become the successor agency.2 If no local agency elected to serve as the successor agency, a public body referred to as a "designated local authority," consisting of a three-member governing board, was appointed by the Governor to assume the duties of the successor agency until such time as a local agency elects to take on the role.3 While most local governmental bodies assumed the role as successor agency, several did elect not to become the successor agency. For example, the Los Angeles City Council opted not to become a successor agency to its redevelopment agency because of the cost associated with continuing to manage the agency during the dissolution.

 

Unless you have some superior knowledge about the terms lease that the rest of us do not, you don't have any basis for your statement landlord has not right to the brewing equipment. If the terms of the lease grant a lien to the landlord, and I've never seen a commercial lease without such a lien, then the landlord lien would trump the lien right of the City. That has been the law in California since at least 1975.

As for link to the article about AB 26, that really tells us nothing about whether or not El Cajon has been designated as a successor agency or not. The quotes from guy on the El Cajon City Council are even in conflict as to to where the money came, so I don't see what conclusions can be drawn other than the left hand doesn't seem to know what the right hand is doing.

 

I would love to see a lease where a tenant pledges equipment (not fixtures) that they don't own and the lender takes a subordinate position in the chain of title.

 

From what I've seen of the facility, the brewing equipment falls under the legal definition of a trade fixture. if there is a trade fixture lien in the lease, then the lease would prevail. I don't know what you are including in the definition of equipment.

However, a lien holder doesn't "own" the collateral. The lien holder owns a lien. if you have a car loan or a house loan, you own the house or car subject the lien. If you don't pay the car, the lender and repossess the car and auction it off. A lender can foreclose on a house for nonpayment. But the repossession or foreclosure occurs, the borrower still "owns" the equipment. I don't recall ever seeing a tenant pledge "equipment" to a landlord either.

 

http://beeradvocate.com/articles/282

 

Just a short update today. El Cajon Brewing Company did not oppose the motion by the City to seek permission to repossess the brewing equipment.

The trial on the eviction lawsuit is set for April 5, 2013 at 9:00 a.m.

The fat lady isn't quite ready to sing yet, but she appears to be warming up her voice.

 

Ah, I was sad to this this thread drop off page 1, nice to see it's back!