New Bankruptcy Opinion: IN RE AMERGENCE TECHNOLOGY INC. – Bankr. Court, CD California, 2014

In re AMERGENCE TECHNOLOGY INC., Chapter 7, Debtor(s).

JASON RUND, Chapter 7 Trustee Plaintiff(s),


YIAN CHEN aka DAVID CHEN, an individual; SHAVONNE TRAN, an individual; DORON STEPHEN aka DORON ISRAELI, an individual; and DSI COMPUTERS, INC., a California Corporation, Defendant(s).

Case No. 2:12-bk-35473-RK, Adv No. 2:14-ap-01500-RK.

United States Bankruptcy Court, C.D. California, Los Angeles Division.

December 8, 2014.


ROBERT KWAN, Bankruptcy Judge.

Having considered the moving and opposing papers relating to the motion of defendant David Chen to dismiss, the court dispenses with oral argument, vacates the hearing on December 9, 2014, takes the motion under submission and rules as follows.

For the reasons stated in the trustee’s opposition to the motion, the court should deny the motion to dismiss. The court determines that it does not lack subject matter jurisdiction to hear this adversary proceeding pursuant to the Supreme Court’s decision in Executive Benefits Insurance Agency v. Arkison, 134 S.Ct. 2165 (2014) because the court may hear so-called Stern constitutional core claims, such as fraudulent transfer claims, subject to de novo review by the United States District Court as an Article III tribunal. See also, Stern v. Marshall, 131 S.Ct. 2594 (2011) . The court determines that the complaint alleges plausible claims for relief based on theories of preference transfer, fraudulent transfer and breach of fiduciary duty, and does not fail to state claims upon which relief can be granted for purposes of Fed. R. Civ. P. 12(b)(6) or Fed. R. Civ. P. 9. See Ashcroft v. Iqbal, 556 U.S. 662 (2009) . Regarding the trustee’s allegations based on information and belief, the court agrees with the trustee that they are sufficiently particular as they are accompanied by statements of fact on which the trustee’s belief is founded. See Shroyer v. New Cingular Wireless Services, Inc., 622 F.3d 1035 (9th Cir. 2010) . While it appears to the court that such pleading based on information and belief is somewhat annoying to a reader since such pleading does not appear to be necessary, the pleading in this manner is not inadequate. The trustee’s allegations contain specific information relating to the alleged preferential and fraudulent transfers, such as the dates and the amounts of the transfers, and the circumstances surrounding the transfers, which show that such transfers may be preferential and/or fraudulent, and thus, such allegations are sufficient to enable defendant to respond to in an answer. The court also agrees with the trustee’s argument in response to defendant’s claim that the complaint should be dismissed for failure to offer authenticated evidence. See, e.g., 2 Schwarzer, Tashima and Wagstaffe, California Practice Guide: Federal Civil Procedure Before Trial, ¶ 9:218 at 9-84 (2014)(problems of proof irrelevant to Rule 12(b)(6) motion), citing inter alia, Allison v. California Adult Authority, 419 F.2d 822, 823 (9th Cir. 1969) .

For the foregoing reasons, the court denies the motion to dismiss, and defendant David Chen is ordered to serve and file his answer within 14 days of entry of this order pursuant to Fed. R. Civ. P. 12(a)(4).

The hearing on Defendant’s motion to dismiss, currently set for hearing on December 9, 2014 at 3:00 p.m. is vacated. The status conference is continued from January 13, 2015 at 1:30 p.m. to January 27, 2015 at 1:30 p.m. A joint status report is due on January 20, 2015.


Save trees – read court opinions online on Google Scholar.


Leave a Reply