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Case 09-33211-hdh11 Doc 70 Filed 08/04/09 Entered 08/04/09 17:15:01 Desc Main

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Mark H. Ralston
The Ralston Law Firm
2603 Oak Lawn Avenue
Suite 200
Dallas, TX 75219
Phone: (214) 295-6416
Fax: (214) 602-1250
Email: RalstonLaw@gmail.com

COUNSEL FOR SILVEROAK HOLDINGS,


LTD.

IN THE UNITED STATES BANKRUPTCY COURT


FOR THE NORTHERN DISTRICT OF TEXAS
DALLAS DIVISION
§
IN RE: § Chapter 11
§
SILVEROAK HOLDINGS, LTD., § Case No. 09-33211
§
Debtor. §
§

RESPONSE OF SILVEROAK HOLDINGS, LTD.,


TO MOTION OF U.S TRUSTEE TO APPOINT CHAPTER 11 TRUSTEE

TO THE HONORABLE U.S. BANKRUPTCY JUDGE:

Silveroak Holdings, Ltd. (“Silveroak or the “Debtor”) as debtor and debtor-in-

possession in this Chapter 11 case (the “Bankruptcy Case”), files this, its response to

United States Trustee’s Motion to Appoint Chapter 11 Trustee [Docket No. 62] (the

“Motion”), filed by the United States Trustee (“Movant”), and in support of this response

would show as follows:

I. FACTUAL BACKGROUND

1. Silveroak’s principal business is the operation of a premier steak house

restaurant doing business under license agreement as “Bob’s Steak & Chop House” at

4300 Lemmon Avenue in Dallas, Texas.

RESPONSE OF SILVEROAK HOLDINGS, LTD.,


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2. On May 26, 2009 (the “Petition Date”), Silveroak filed the above-

captioned and numbered bankruptcy case (the “Bankruptcy Case”).

3. Since the Petition Date, the Debtor has managed its estate as debtor in

possession without objection of any party save the Movant.

4. This Bankruptcy Court has approved Silveroak’s engagement of Jordan

Donahoe & Co. (“JDC”) as its bookkeeper and accountant. Contrary to the assertions

made by Movant in the Motion, Mr. Don Jordan is not Silveroak’s chief restructuring

officer. (Although Silveroak originally sought such relief, it determined later not to

pursue the engagement.)

5. Despite facing exceeding difficult circumstances in the high-end restaurant

business, Silveroak has re-paid all post-petition loans under its approved debtor-in-

possession credit facility.

II. DISCUSSION

6. Movant seeks the appointment of a chapter 11 trustee on two ostensible

grounds. First, Movant asserts that because Mr. Robert Sambol (“Sambol”), the sole

officer of Silveroak’s general partner, is subject of a currently pending felony criminal

indictment, a trustee should be appointed for cause. And second, Movant asserts that

because of connections between Sambol and Mr. Bill Lenox, that it is in the best interests

of the creditors that this Bankruptcy Court appoint a chapter 11 trustee.

7. Section 1104(a)(1) requires that a trustee be appointed where there is

“fraud, dishonesty, incompetence or gross mismanagement of the affairs of the debtor by

current management … . “1 Regarding the claims against Mr. Sambol, they are just that –

claims. Movant has failed to establish that there is anything more than allegation of
1
All statutory references shall be to the Bankruptcy Code, Title 11, United States Code.

RESPONSE OF SILVEROAK HOLDINGS, LTD.,


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wrongdoing by Mr. Sambol. Furthermore, Silveroak has never hidden from the

allegations asserted. To the contrary, it has addressed those same issues in prior

proceedings before this Court.

8. Regarding the best interest of creditors, it is most telling that no creditor

has joined in Movant’s Motion. Furthermore, the success of Silveroak’s business

operations is linked directly with the retention of Sambol as the manager of Silveroak’s

restaurant operations. To wit, if a Chapter 11 trustee were appointed, the trustee would

still be in the position of having to retain Sambol or ceasing Silveroak’s business

operations. This is a “thin” case; one that cannot afford excessive administrative

expenses. Then, how is it in the best interest of creditors to add an additionally layer of

management to Silveroak’s operations?

9. Movant also urges that the relationship between Silveroak and Mr. Bill

Lenox somehow creates cause meriting the appointment of a chapter 11 trustee. Again,

this relationship was fully disclosed by Silveroak in its first-day motions and supporting

papers. There is nothing new here. The fact that a party formerly involved with Silveroak

may be interested in acquiring Silveroak’s business does not in and of itself mean that it

is the best interests of creditors to appoint a chapter 11 trustee.

III. CONCLUSION

Cause does not exist to require this Court to appoint a chapter 11 trustee. To whit,

the claims made against Sambol are just that – claims. And it is not in the best interest of

creditors to appoint a chapter 11 trustee. Accordingly, this Court should deny the

Motion.

RESPONSE OF SILVEROAK HOLDINGS, LTD.,


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Dated the 4th day of August, 2009.

Respectfully submitted,

The Ralston Law Firm

By: /s/ Mark H. Ralston


Mark H. Ralston, Esq.
2603 Oak Lawn Avenue
Suite 200, LB 2
Dallas Texas 75219
Telephone: 214-295-6416
Fax: 214-602-1250

Email: raslstonlaw@gmail.com

COUNSEL FOR DEBTOR SILVEROAK


HOLDINGS, LTD.

CERTIFICATE OF SERVICE

This is to certify that the undersigned caused a true and correct copy of the
foregoing document to be served on this, the 4th day of August, 2009, electronically on all
parties receiving notice through the Court’s ECF system.

/s/ Mark H. Ralston

Mark H. Ralston

RESPONSE OF SILVEROAK HOLDINGS, LTD.,


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