Notice of Debtor’s Intent To Reject Commercial Lease …
You likely received a document in the mail titled “Notice of Debtor’s Intent To Reject Commercial Lease …” (We will call it the “Notice” for short.) The Notice was sent to you by the defendants as part of this ongoing class action lawsuit against the owners and operators of Salem RV Park (“Park”). If you did not receive the Notice, you can see a copy by clicking here.
First, please note that you do not need to do anything related to the Notice. Your failure to take any action will have no effect on your existing judgment and will have no effect on your right to potentially receive money in this case.
Below, I will explain what this Notice means:
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There are three “defendants” in this case. They are Better Business Management (“BBM”), B. & J. Properties (”B&J”), and William Berman (“Mr. Berman”).
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BBM operated and managed the Salem RV Park. That was who you typically dealt with when paying bills, scheduling maintenance, etc.
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B&J owns the land under the Salem RV Park.
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William Berman and his wife own both BBM and B&J.
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Together the three defendants owe you the amount of money shown in the judgment entered in this case. (Click here to see the judgment, and the amount you are currently owed.)
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We have the right to collect the amount owed to you from the defendants in any combination. For example, each may pay one third of the amount owed, one may pay it all, or they can pay in any other combination. Note, however, that you cannot collect more than the total amount shown as due to you in the judgment.
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Each month, when you and others paid rent to Salem RV Park, BBM paid most of the money to B&J. Because of that and other reasons, BBM was essentially a “sham” corporation, with very little money or assets, and no insurance to pay its liability in this case.
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In December of 2017 we had a trial in this case in Marion County Court before the Judge. Before that trial, BBM was the only defendant that had been found liable by the Judge and was the only defendant required to pay you money. At trial, we proved that BBM was a sham corporation, and that B&J and Mr. Berman should also have to pay you money in this case. That trial is why all three defendants are now required to pay the amount owed to you.
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BBM rents the property under Salem RV Park from B&J. There is a rental contract between them. It requires that BBM pay money to B&J each month. It also says that if BBM is unable to pay rent, becomes insolvent, or other things happen B&J can “reject” the lease and take over operation of the Park. The Notice was sent to inform you that B&J has decided to take over the Park, and that BBM will effectively have little If any further involvement with the Park.
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Based on our research and understanding, B&J’s decision to take over operation of the Park does not significantly impact your future ability to receive payment in this case. BBM has always been a sham corporation with no money or assets. It was created by Mr. Berman and B&J as a middleman to try to avoid liability.
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In short, we see no reason to object to the action proposed in the Notice.
Bankruptcy filing and related issues
B&J recently filed for bankruptcy protection. We also expect that Mr. Berman will do the same in the near future. This does not mean that you will not receive any money from B&J at some point. Instead, it means that because B&J has to pay the Class over $4.8 million (and likely more with ongoing interest and attorney fees), the amount they now owe exceeds the amount they have available to pay. We cannot take any action to attempt to collect the amounts due to you while the bankruptcy is pending. There are a number of other steps that we will take to preserve your right to payment out of the bankruptcy proceedings. We will provide periodic updates on this website as things progress.
There are some advantages to you and the Class from the bankruptcy filing. First, it means that an attorney from the U.S. Trustee’s Office has been assigned to the case. The U.S. Trustee office is a component of the Department of Justice that works to protect the integrity of the bankruptcy system by overseeing case administration and litigating to enforce the bankruptcy laws. She will oversee the process and will interview the Debtor. That lessens the potential for misconduct from B&J or its owners, such as hiding money or other assets, or other unlawful actions. It also means that we will be provided with bankruptcy schedules that will list B&J’s assets such as money and property. It will show the amount of debt B&J owes to others besides the Class in this lawsuit.
Although the bankruptcy process is lengthy, it does not mean B&J can avoid the debt to you and the Class entirely. We are in the early stages, but expect to have more information, including the bankruptcy schedules soon. We will update the website periodically as we receive more information. Please check back regularly for updates.
The discussion above applies equally to any bankruptcy filing by Mr. Berman.
Appeal
All three defendants have filed an appeal in this case. That means that they want the appeals court review the rulings and the judgment by the trial court judge. The appeals court will determine if the trial court judge made any mistakes serious enough to require it to overturn the judgment awarding you money, or whether we must re-do any of the things done previously at the trial court level.
While anything can happen, we do not believe defendants can present any issue to the appeals court that will put your judgment at any substantial risk. The biggest concern is that appeal takes time, and this will add yet another year or two to the case. There is nothing we can do to shorten that process. On the positive side, under Oregon law your judgment is increasing by 9 percent per year beginning November 1, 2018.
Settlement Negotiations
The appeals court strongly urges us to attempt to settle the case before the appeals process begins. Toward that, we have stated discussions with the defendants, and hopefully will mediate the case in the near future with hopes of reaching a settlement.
Bottom Line
For now, there is nothing you need to do in order to protect the judgment awarding money to you in this case. Things are moving forward, but please understand that unless we are successful at mediation, this case will probably not result in any payments for at least another year or more.
It is important that you keep us informed of any changes in your contact information. If anything has changed (i.e. address, email address, phone number, etc.) please contact us with an update. Otherwise, we will not be able to contact you at the conclusion of this case to send you money we may obtain for you.
November 2, 2018
Great news! As anticipated in the September 28, 2018 update, the judge on this case signed and entered a General Judgment into the court’s register.
In short, this means that each class member with an accepted claim now has a valid and enforceable legal judgment (which is a legal right to collect money) against the three defendants (together, referred to as SRVP) in this case. You can see a copy of the Judgment showing the amounts due to each member of the class (and due to you, if you are a class member) by clicking here.
The basic facts are that the total amount due to the class for all class members combined is $4,864,951. This total consists the money due to two classes.
The first is called the Electricity Class, and consists of people who were overcharged for electrical service and a meter reading fee at SRVP from April 2003 until August 2013. The total amount due to the Electricity Class is $3,900,501.
The second is called the Retaliation Class, and is composed of tenants at SRVP in April 2013 whose rent was raised in August 2013. The total amount due to the Retaliation Class is $964,450.
From this point, we are taking steps to determine what assets are available to “satisfy” or pay the legal judgments held by each of you as shown on the General Judgment. We intend to press forward using all available methods to obtain the money and will update this page regularly based on future events.
The important question, of course, is if you are listed and due money under the Judgment, when do you get your money? The short answer is that if and when we obtain money from SRVP, it will be paid out to you.
HOWEVER, please bear in mind that there may still be several more steps before we can have any money to pay out on your Judgment.
Under our legal system, even though you now have a valid and enforceable right to collect money from the SRVP, there are a few different things it can do to challenge the Judgment or otherwise further delay the process.
These include (1) appealing the case; (2) declaring bankruptcy; (3) offering less that the amount of the judgment to settle the case; or (4) some unforeseen legal maneuver. We will discuss each in turn.
1. Appeal
A defendant in Oregon has an automatic right to ask the Oregon Appeals Court to review the decisions and results in the case that led up to the judgment. That means that the defendants (SRVP) can, if it chooses, file a request with the Appeals Court saying that it disagrees with one or more of the things that have happened in the case leading to your Judgment. That process requires SRVP and the Class to file legal briefs with the court, then go before a panel of judges to argue the appeal. Then, at a time of the Appeals court’s choosing, it will publish its opinion. The opinion can affirm (or agree with) the judge’s decisions on the case. If so, then SRVP can appeal to the Oregon Supreme Court. That is not automatic – the Oregon Supreme court has the right to refuse to get involved. At that point, SRVP has no more appeals within the Oregon system.
The appeals process can take from 6 to 24 (or more) months to complete. We should know within about a month whether SRVP decides to appeal the case.
2. Declaring Bankruptcy
SRVP may claim that it qualifies for protection by the bankruptcy courts. That does not mean that SRVP will never have to pay money that it owes, but that the court will establish a plan that distributes SRVP’s assets in a way that is fair to its creditors. If SRVP files for bankruptcy protection, we intend to argue that its misconduct leading to the Judgment was “intentional” and therefore not subject to bankruptcy protection. We will, as the saying goes, cross that bridge when we come to it.
3. Offer a Percentage of the Judgment as Settlement
SRVP may decide to offer something less than the amount it owes under the Judgment in order to settle the case and avoid either the appeals or bankruptcy process. Any amount less than the total amount of the Judgment will have to ba approved by the judge. Because we believe the judge’s decisions in this case were well supported by Oregon law, we do not anticipate recommending a settlement less than the judgment in this case. Again, we will cross that bridge when we come to it.
4. The Bottom Line
For now, there is nothing any class member listed on the Judgment needs to do except remain patient. This may still take a while.
For further information visit Salem RV Park Class Action Claims Website.
Brady Mertz, PC
345 Lincoln St. SE
Salem, OR 97302
(503) 385-0121
Fax: (503) 375-2218
