United States District Court, D. Nevada
IN RE AFRODITI LEDSTROM.
DOLORES ELIADES, Appellee. PETER ELIADES, et al., Appellants,
P. GORDON UNITED STATES DISTRICT JUDGE
Peter Eliades; Peter Eliades as Trustee of the Eliades Family
Trust; Aristotle Holding, LP; Pete the Greek, LLC; and
Aristotelis Eliades appeal the bankruptcy court's
preliminary ruling on a variety of issues in a consolidated
adversary action. ECF Nos. 1, 20, 23. Appellee Dolores
Eliades opposes. ECF No. 41. The receiver appointed by the
bankruptcy court also filed an opposition brief. ECF No. 46.
case arises out of a dispute about who owns and controls a
family-run business, the Olympic Garden Gentlemen's Club
(also known as the “OG”), and who owes what to
whom as a result of the family's financial transactions.
On one side are: (1) appellant Peter Eliades (the father of
Dolores, Aristotelis, and Afroditi) and entities controlled
by him; (2) appellant Aristotelis Eliades (also known as
Telly); and (3) non-appellant and debtor Afroditi Eliades.
The bankruptcy court and the parties refer to this side of
the dispute as the Eliades Family Group. On the other side is
appellee Dolores Eliades.
consolidated adversary action involves interrelated lawsuits
filed in state court that were removed to the bankruptcy
court as part of Afroditi's bankruptcy proceeding. The
first lawsuit was filed in December 2009 by the Eliades
Family Group against Dolores regarding alleged breaches of
loan agreements, breach of fiduciary duties, and fraud. ECF
No. 1 at 51. Dolores counterclaimed that Peter, Telly, and
Afroditi were conspiring against her to deprive her of her
interest in the OG. Id. In 2011, Dolores filed her
own complaint but the state court determined it was
duplicative of her counterclaims in the first lawsuit so it
was dismissed. Id. at 52. In November 2011,
Aristotle Holding (an entity owned by Peter) filed an
unlawful detainer action against the OG, alleging that the
club was not paying rent and was holding over after being
notified its lease was terminated. Id.
2012, Afroditi filed for bankruptcy after a
multi-million-dollar judgment was entered against her in
litigation related to a car accident in which a third party,
Michael Ponzio, was killed. Id. at 53. Afroditi then
removed the state court litigation to bankruptcy court where
all the lawsuits were consolidated into one adversarial
bankruptcy court made extensive factual findings and I will
not repeat them in full here. In sum, the Eliades Family
Group claims that Dolores owes substantial sums to Peter for
purported loans he made to her so she could purchase her
share in the two entities that now own the OG and for her
share in another entity that purchased land adjacent to the
OG. The Eliades Family Group also contends Dolores owes sums
she stole from the club and from Peter personally while she
operated the OG. Dolores, in contrast, contends that the
Eliades Family Group has conspired to divest her of her
interest in the OG in retaliation for her refusal to assist
the family in shielding Afroditi's assets from the Ponzio
wrongful death lawsuit.
Eliades Family Group requested the bankruptcy court order the
immediate dissolution of the two limited liability companies
that owned the OG because the members were deadlocked and
because Afroditi filed for bankruptcy. Id. at 53.
The Eliades Family Group agreed a receiver could be appointed
but only to wind up the club's affairs upon
dissolution. Id. Aristotle Holding requested
the OG be evicted and for restitution of the premises based
on non-payment of rent under a 2010 lease. Id. at
53-54. Peter moved for a pre-judgment writ of attachment on
Dolores's ownership interest in the OG based on sums she
allegedly owes under various loans and because she stole from
him. Id. at 54.
opposed dissolution because it would destroy her interest in
the OG. Id. She also asserted that the effort to
evict the club was part of the Eliades Family Group's
efforts to deprive her of any value from the club.
Id. In response to Peter's motion for a writ of
attachment, Dolores argued the purported loans were actually
gifts, Peter waived the right to payment by failing to demand
payment for years, and her withdrawals were authorized by
Peter or his late wife, Janet. She also argued that to the
extent Peter was entitled to any recovery, she was entitled
to an offset for certain gaming space lease payments that
Peter received instead of those payments going to the OG.
bankruptcy court appointed a temporary receiver and the
proceedings were stayed for some time while the parties
negotiated a sale of the club and settlement. Id. at
56-57. At the parties' request for a temporary solution
to operate the club in the meantime, the bankruptcy court
ordered Telly, Afroditi, and Dolores to hold weekly meetings
on the club's operation, with the bankruptcy trustee also
attending as a tie breaker when needed. Id. at 58.
The Ponzio wrongful death claim thereafter settled and
Afroditi's bankruptcy plan was confirmed. Id.
further settlements could be consummated, the parties
requested the bankruptcy court resolve their various motions.
Id. The bankruptcy court made preliminary rulings
and the Eliades Family Group appeals on numerous grounds. I
address each in turn below.
STANDARD OF REVIEW
review de novo the bankruptcy court's conclusions of law.
In re Rains, 428 F.3d 893, 900 (9th Cir. 2005). I
review its factual findings for clear error. Id. The
bankruptcy court's factual findings are clearly erroneous
only if they “leave the definite and firm
conviction” that the bankruptcy court made a mistake.
Id. (quotation omitted). Under clear error review,
if the bankruptcy court's findings are “plausible
in light of the record viewed in its entirety, ” I may
not reverse them even if I would have “weighed the
evidence differently.” Anderson v. City of Bessemer
City, N.C. , 470 U.S. 564, 574 (1985). In other words,
“[w]here there are two permissible views of the
evidence, the factfinder's choice between them cannot be
clearly erroneous, ” particularly where the decision
rests on a credibility determination. Id. at 574-75.
But if documents or objective evidence so contradict a
witness's testimony, or testimony is “so internally
inconsistent or implausible on its face that a reasonable
factfinder would not credit it, ” then I may find clear
error even if the bankruptcy court's findings are based
on a credibility determination. Id. at 575. I may
affirm the bankruptcy court's decision “on any
ground fairly supported by the record.” In re
Warren, 568 F.3d 1113, 1116 (9th Cir. 2009).
Pre-Judgment Writ of Attachment
contends the bankruptcy court erred by not granting him a
pre-judgment writ of attachment on Dolores's interests in
the two entities that owned the OG: OG Eliades, LLC (OGE) and
OG Eliades A.D., LLC (OGEAD). Peter argues that Dolores's
interests in these two entities are her only assets, he
demonstrated probable validity of his claims that Dolores
owes him money, and the bankruptcy court therefore should
have issued the writ. Specifically, Peter contends he showed
Dolores owed him money for: (1) a $763, 099.55 balance on a
loan Peter made to Dolores so she could purchase her share of
ownership interests in SHAC Eliades, LLC, an entity formed to
purchase the Sapphire Club; (2) a $3, 334, 934.24 balance on
a loan Peter made to Dolores so she could purchase her share
in OGE; (3) a $3, 185, 273.97 balance on a loan Peter made to
Dolores so she could purchase her share in OGEAD; (4) over $1
million Dolores took from one of Peter's accounts to buy
her daughter a house and to pay for meals, gifts, clothing,
and other personal expenses; and (5) a $2, 444, 541.86
balance on a loan Peter made to Dolores so she could purchase
her share in AA and D of Nevada, LLC (AAD), a company formed
to hold property located next to the OG.
responds that the amounts Peter claims for AAD and
Dolores's daughter's house are each secured by a lis
pendens on two different properties so a writ is unnecessary.
Dolores also argues that a writ of attachment is unnecessary
because any other money taken from the club is small in
comparison to the amount of her interest in the club. She
asserts Peter has waived any right to repayment on the
balance of the loan related to SHAC and that the balance was
satisfied when the children paid off another loan on
Peter's behalf. Finally, as to the promissory notes
related to her share in OGE and OGEAD, Dolores argues the
bankruptcy court's conclusion that Peter was unlikely to
prevail on these claims is supported by the evidence.
bankruptcy court found that the documents underlying the
family's transactions were “riddled with
inconsistent signing dates and date modifications, ”
that the documents “were only created to appease
regulators and maintain the appearance of business
formalities without ever being given actual effect, ”
and the “documentary backdrop was largely ignored so
long as the family remained unfractured.” ECF No. 1 at
21-22. Consequently, the bankruptcy court concluded that
“enforcing the letter of the documents in this record
is virtually impossible.” Id. at 22.
with this conclusion, the bankruptcy court found Peter never
required payment from his children on the OGE and OGEAD
promissory notes until after this litigation commenced.
Id. at 43-44 (“The Court finds no credible
evidence he truly expected payments from his children for the
OG Club until things went wrong.”). The bankruptcy
court made this same finding with respect to
Id. at 44. The bankruptcy court thus found Peter had
not satisfied his burden of showing his claims had probable
validity to support a mandatory writ of attachment.
Id. at 88. Specifically, the court noted there were
significant disputes about whether the promissory notes were
enforceable and whether Peter waived a right to payment.
the theft allegations, the bankruptcy court acknowledged that
it viewed with skepticism Dolores's testimony about her
authority to make all of the challenged expenditures, but
that issues surrounding Dolores's express or implied
authority to act in relation to the accounts raised doubts
about Peter's ability to show Dolores had the requisite
intent to steal. Id. at 88-89. The court thus denied
a mandatory writ of attachment. Id. at 89. The
bankruptcy court also denied a discretionary writ as
unnecessary because Dolores's interest in the OG was not
in danger of being moved outside the court's jurisdiction
and the court was appointing a receiver to protect the
club's value. Id.
Nevada law, a plaintiff may apply for a writ of attachment on
the defendant's property as security for the satisfaction
of a judgment that may be recovered in a lawsuit. Nev. Rev.
Stat. § 31.010(1). The court has discretion to issue a
writ of attachment with or without notice in certain cases.
Id. §§ 31.013, 31.017. For example, the
court may order a writ of attachment without notice if the
court determines that the defendant converted the
plaintiff's property without consent or money was
obtained through embezzlement. Id. §§
31.017(3), (6), 31.022. If the court orders the defendant to
show cause why an attachment order should not issue, it must
hold a hearing and determine the “probable validity of
the plaintiff's underlying claim against the
defendant.” Id. §§ 31.024, 31.026.
“If the court determines such claim is probably valid
it shall order the clerk to issue a writ of
attachment.” Id. § 31.026.
bankruptcy judge held a multi-day evidentiary hearing during
which he heard testimony from Peter, Afroditi, Telly,
Dolores, and other witnesses. He thus had the opportunity to
evaluate the parties' credibility and examine the
evidence underlying Peter's claims. The bankruptcy
judge's finding that factual disputes remain such that
Peter's claims lack probable validity is not clearly
erroneous. There is an evidentiary basis for the bankruptcy
judge's view that questions remain about whether (1) the
parties properly executed the promissory notes, (2) those
notes were executed for a lawful purpose, (3) Peter expected
payment under those notes before this litigation, (4) Peter
waived payment rights, and (5) whether Dolores exceeded her
authority and had intent to steal with respect to
expenditures from Peter's account. The record amply
supports the bankruptcy judge's view that Peter was
extremely generous with his children and required no payment
from them so long as they remained on his good side, that the
family's transactions were often not documented at the
time of the transaction, and that the documented transactions
and relationships often did not reflect how things functioned
in practice. Peter's disagreement with the
bankruptcy judge's evaluation of the evidence and the
witnesses' credibility does not suffice to establish that
the preliminary findings were clearly erroneous.
Consequently, the bankruptcy court's refusal to issue a
mandatory writ was not reversible error.
bankruptcy court's refusal to issue a discretionary writ
also was not error. The asset that Peter seeks to attach is
not in jeopardy of being dissipated or removed from the
court's jurisdiction. Accordingly, I affirm the
bankruptcy court's decision to deny a writ of attachment.
parties disputed before the bankruptcy court which version of
a lease governed the relationship between the OG and its
landlord, Aristotle Holding. The Eliades Family Group
contends the bankruptcy court's finding that the 2007
lease is the governing document was clearly erroneous. They
argue the bankruptcy court was inconsistent when it found the
2010 lease was invalid because it was signed by only one
member of OGE and OGEAD (Telly), yet it found the 2007 lease
was valid even though it likewise was signed by only one
member of OGE and OGEAD (Dolores). The Eliades Family Group
also asserts that in making this ...