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Home New Cases Beach Orangethorpe Hotel Sues Multiple Defendants for Alleged Breach of Fiduciary Duty in The Source Hotel Bankruptcy

Beach Orangethorpe Hotel Sues Multiple Defendants for Alleged Breach of Fiduciary Duty in The Source Hotel Bankruptcy

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September 29, 2021, Central District of California – Plaintiff Beach Orangethorpe Hotel, LLC (BOH), Jian Hua, Haiyuan Ma, Jiaxin Bao, Jingkun Shan, Jun Liu, Zhen Liu, Ziyu Li, Hongwei Liu, and Dongmei Shi (collectively, “Plaintiffs”), recently brought an adversary proceeding against M&D Regional Center, Shady Bird Lending, LLC, M+D Properties, Evertrust Bank and few others in the bankruptcy case of The Source Hotel, LLC.

The Plaintiffs accuse M&D Regional Center, the manager of BOH of breaching its fiduciary duties to BOH by facilitating the impermissibly excessive subordination of BOH’s secured claim to Evertrust’s secured claim against the Debtor. The Plaintiffs charges M+D Properties, the guarantors, and Evertrust for aiding and abetting and colluding in M&D Regional Center’s breach of fiduciary duties; and indict Shady Bird, the assignee of Evertrust’s secured claim under the doctrine of equitable subordination.

The Plaintiffs seek an injunction prohibiting Shady Bird from foreclosing on the Debtor’s assets and intend to rescind the subordination agreements. The Plaintiffs also urge the Court to enter judgment against the Defendants for compensatory and exemplary damages in an amount to be determined at trial.

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Jones & Associates

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