IN RE TRISTAR ESPERANZA PROPERTIES, LLC

BAP No. CC-12-1340-KlPaDu. Bankruptcy No. SA 11-21095-TA. Adversary No. SA 12-01041-TA.

488 B.R. 394 (2013)

In re TRISTAR ESPERANZA PROPERTIES, LLC, a California Limited Liability Company, Debtor. Jane O'Donnell; Pensco Trust Company, a New Hampshire Company, Appellants, v. Tristar Esperanza Properties, LLC, a California Limited Liability Company, Appellee.

United States Bankruptcy Appellate Panel of the Ninth Circuit.

Decided March 8, 2013.


Attorney(s) appearing for the Case

Nancy S. Goldenberg , Santa Ana, CA, United States Trustee, U.S. Trustee.

Ian Landsberg , Landsberg & Associates APC, Woodland Hills, CA, for Debtor.

Before KLEIN, PAPPAS, and DUNN, Bankruptcy Judges.


OPINION

KLEIN, Bankruptcy Judge.

This is a mandatory subordination case. The "damages" clause of 11 U.S.C. § 510(b) mandates subordination of claims for "damages arising from the purchase or sale" of a security of the debtor. The bankruptcy court concluded that § 510(b) mandatory subordination applies to the claim of appellant, who withdrew as a member of the debtor limited liability company ("LLC") and obtained a judgment valuing her equity interest...

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