Cathay Bank vs. Iridium Property Investments, LLC

Under LiMandri, here, the Complaint adequately pleads that Defendant had knowledge of material facts that were unknown to Plaintiffs. (Complaint at ¶¶ 63,64.) The allegations sufficiently allege that Defendant actively concealed said facts. Further, while Plaintiffs do not allege they purchased the Subject Vehicle directly from Defendant Volkswagen, the do plead, “On or about October 30, 2019, Plaintiff entered into a warranty contract with Defendant VWGOA regarding a 2019 Volkswagen Atlas, vehicle identification number 1V2NR2CA8KC515145 (hereafter ‘Subject Vehicle’), which was manufactured and or distributed by Defendant.” (Complaint¶7.)

The Court of Appeal has held this is sufficient at the pleading stage. (See Dhital v. Nissan North America, Inc. (2022) 84 Cal.App.5th 828, 844.)

Defendants also argue that Plaintiffs fail to allege corporate ratification of the fraud, noting that [t]he requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Tarmann v. State Farm Mut. Auto Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

Yet, Plaintiffs claim is for fraudulent concealment. Thus, it is unlikely that facts regarding fraudulent representations would be pertinent here, given that Plaintiff does not plead fraudulent misrepresentation.

Accordingly, based on applicable law and as set forth hereinabove, the Motion is DENIED.

Plaintiff to provide notice.

14. 30-2026-01561390 1. Order to Show Cause re: Preliminary Injunction

Cathay Bank vs. Iridium Plaintiff, Cathay Bank (“Plaintiff” or “the Bank”), applies for an order appointing a receiver over Property Investments, a commercial property generating monthly rents in excess of $158,000, commonly known as LLC 2201 Alton Parkway and 16940 Von Karman Avenue, Irvine, California, Assessor’s Parcel Number 435-034-12 (the “Property”).

Plaintiff contends that the Property secures a fully matured loan by the Bank with an outstanding balance in excess of $11,400,000.00 (“Loan”) to Iridium Property Investments, LLC (“Borrower” and/or “Iridium”); that the Borrower defaulted under the terms of the loan documents by failing to pay all sums due on the January 15, 2026 maturity date of the Note; that Defendant Michael J. Rogerson (“Rogerson”) and the Michael J. Rogerson Trust Dated May 7, 2011, as Amended (“Trust”) (collectively, the “Guarantors”) executed their Continuing Guaranties (“Guaranties”) pursuant to which they guaranteed repayment to the Bank of all sums owed by the Iridium to the Bank; that the Guarantors have paid no sums pursuant to the terms of their Guaranties; that under Section 1.11 of the Deed of Trust and Assignment of Rents, the Borrower has expressly consented to the appointment of a receiver; that Code of Civil Procedure section 564(b)(1), (2), (9), and (11) empower the Court to appoint a receiver in the present case because the terms of the Deed of Trust provide Plaintiff with an assignment of all the rents generated from the Property; and that the appointment of a receiver is necessary to take over the management and control of the Property, with the power to collect all rents, revenues and profits, manage, lease, protect and preserve the collateral as without one there is immediate and substantial danger that the collateral may be lost, secreted, and/or misappropriated, all to the detriment and irreparable loss to Plaintiff.

Defendants, Michael J. Rogerson and Michael J. Rogerson as Trustee of the Michael J. Rogerson Trust dated May 7, 2011 (collectively, the “Rogerson Defendants”) have filed a response. The Rogerson Defendants assert that Plaintiff has failed to demonstrate any imminent harm to the value of the Property necessary to justify the appointment of a receiver, that the Rogerson Defendants have proposed alternative means to protect Plaintiff’s interests which obviate the need for a receiver, and that the appointment of a receiver is not necessary as the Plaintiff has proceeded with pursuing a nonjudicial foreclosure.

In reply, Plaintiff contends that the Response is not forthright as although it purports to be submitted on behalf of Iridium Property Investments, LLC (“Iridium”), the Response was filed on by and on behalf of the Rogerson Defendants. Plaintiff asserts that Iridium, the borrower and owner of the Property, has filed no opposition to the instant Application and the Court’s OSC despite multiple opportunities to do so, and that the Response before the Court was filed only by Guarantors, who lack standing to oppose appointment of a rents, profits and issues receiver over Iridium’s Property, such that the Court should strike the Response.

Plaintiff contends that notwithstanding the Rogerson Defendants lack of standing, the Response confirms default, lack of cash flow, and competing creditor pressure, which justify appointment of a receiver to preserve rents and profits for the benefit of Plaintiff. Plaintiff additionally asserts that refinancing, asset sales, or coordination with other creditors as alternatives to a receiver are speculative proposals, contingent on third-party approvals, and that do not provide the immediate protection of rents and profits that the Loan Documents Iridium signed and statute authorize.

Thus, Plaintiff contends that the Court should adopt its tentative ruling in the June 4, 2026 Minute Order, and appoint Brian Weiss as receiver over the Property. Further, Plaintiff contends that because no rents have been paid, the Loan is admittedly fully matured and unpaid, and Iridium has not opposed the Receiver Application and the Court’s OSC, and has not provided any meaningful argument as to the Receiver’s bond, the Receiver’s bond should be no more than $25,000.00, and that for the same reasons, the preliminary injunction bond under Code of Civil Procedure section 529 to be filed by the Bank should not be more than $5,000.00.

As a threshold matter, Plaintiff correctly provides that, while the Response purports to be brought on behalf of Iridium and the Rogerson Defendants, counsel who filed the Response, James C. Bastian, Jr. provides that he is counsel only for the Rogerson Defendants, as indicated by the signature line. Code of Civil Procedure section 128.7(a) states, “[e]very pleading, petition, written notice of motion, or other similar paper shall be signed by at least one attorney of record in the attorney’s individual name, . . . .” As a result, the instant OSC has not been opposed by Iridium. Nevertheless, Plaintiff fails to establish that the Rogerson Defendants, who are codefendants and appear to have an interest as Guarantors who guaranteed the debt, lack standing to oppose the OSC.

Receivers are agents of the court, not of any party, and may be appointed only when authorized by statute. (Marsch v. Williams (1994) 23 Cal.App.4th 238, 246; Cal. Rules of Court, rule 3.1179(a).)

“A receiver may be appointed, in the manner provided by this chapter, by the court in which an action or proceeding is pending in any case in which the court is empowered by law to appoint a receiver.” (Code Civ. Proc. § 564(a).)

Code of Civil Procedure section 564(b) provides, in relevant part: “A receiver may be appointed by the court in which an action or proceeding is pending, or by a judge of that court, in the following cases: (1) In an action by a vendor to vacate a fraudulent purchase of property, or by a creditor to subject any property or fund to the creditor's claim, or between partners or others jointly owning or interested in any property or fund, on the application of the plaintiff, or of any party whose right to or interest in the property or fund, or the proceeds of the property or fund, is probable, and where it is shown that the property or fund is in danger of being lost, removed, or materially injured. (2) In an action by a secured lender for the foreclosure of a deed of trust or mortgage and sale of property upon which there is a lien under a deed of trust or mortgage, where it appears that the property is in danger of being lost, removed, or materially injured, or that the condition of the deed of trust or mortgage has not been performed, and that the property is probably insufficient to discharge the deed of trust or mortgage debt . . . . [¶¶.] (9) In all other cases where necessary to preserve the property or rights of any party. [¶.] (11) In an action by a secured lender for specific performance of an assignment of rents provision in a deed of trust, mortgage, or separate assignment document.

The appointment may be continued after entry of a judgment for specific performance if appropriate to protect, operate, or maintain real property encumbered by a deed of trust or mortgage or to collect rents therefrom while a pending nonjudicial foreclosure under power of sale in a deed of trust or mortgage is being completed.” (Code Civ. Proc., § 564(b)(1), (2), (9), (11).)

For purposes of this section, “ ‘Borrower’ means the trustor under a deed of trust, . . ., where the deed of trust or mortgage encumbers real property security and secures the performance of the trustor or mortgagor under a loan, extension of credit, guaranty, or other obligation.” (Code Civ. Proc., § 564(e)(1).) “ ‘Secured lender’ means the beneficiary under a deed of trust against the real property security, or the mortgagee under a mortgage against the real property security, and any successor in interest of the beneficiary or mortgagee to the deed of trust or mortgage.” (Code Civ. Proc., § 564(e)(5).)

“[S]ection 564 of the Code of Civil Procedure authorizes the appointment of a receiver on the application of the plaintiff or of any party whose right or interest in the property or funds is probable and where it is shown that the property or fund is in danger of being lost, removed or materially injured, and also in all cases where receivers have heretofore been appointed by courts of equity.” (Snidow v. Hill (1948) 84 Cal.App.2d 702, 704.)

“[T]rial courts enjoy a large measure of discretion, albeit not an entirely uncontrolled one, in deciding when to exercise their authority to appoint a receiver.” (Medipro Medical Staffing LLC v. Certified Nursing Registry, Inc. (2021) 60 Cal.App.5th 622, 627, internal quotes omitted.) “Because the appointment of a receiver transfers property—or in this case, a business—out of the hands of its owners and into the hands of a receiver, the appointment of a receiver is a very drastic, harsh, and costly remedy that is to be exercised sparingly with caution.” (Id. at p. 628, internal quotes & citations omitted.)

Thus, “[d]ue to the extraordinary nature of this remedy and the special costs it imposes, courts are strongly discouraged—although not strictly prohibited— from appointing a receiver unless the more intrusive oversight of a receiver is a necessity because other, less intrusive remedies are either inadequate or unavailable.” (Ibid., internal quotes omitted.)

The moving papers must establish one of the statutory grounds for appointment of a receiver by the preponderance of the evidence. (Miller v. Oliver (1917) 174 Cal. 407, 410; Moore v. Oberg (1943) 61 Cal.App.2d 216, 220 [preponderance of the evidence standard].) “[B]ecause of the drastic character of the remedy, the discretion is not an entirely uncontrolled one but must exercised with due regard for the facts in a particular case . . . . Ordinarily, if there is any other remedy, less severe in its results, which will adequately protect the rights of the parties, a court should not take property out of the hands of its owners. [Citations.]” (Golden State Glass Corp. v. Superior Court (1939) 13 Cal.2d 384, 393; Alhambra-Shumway Mines, Inc. v. Alhambra Gold Mine Corp. (1953) 116 Cal.App.2d 869, 872.)

A court has jurisdiction to appoint a receiver under Section 564 where a creditor seeks “to specifically enforce a provision of the mortgage or deed of trust assigning the rents and profits from the security to the creditor upon default, or specifically providing for the appointment of a receiver to take possession of the security and collect the rents and profits therefrom.” (Turner v. Superior Court (1977) 72 Cal.App.3d 804, 811; see Barclays Bank of California v. Superior Court (1977) 69 Cal.App.3d 593, 599-602 [court may appoint receiver where a trust deed provides that upon default the beneficiary shall be entitled to the appointment of a receiver].) A court may appoint a receiver under Section 564 to enforce specific performance of the terms and conditions of a mortgage. (Mines v. Superior Court (1932) 216 Cal. 776, 779.)

Although the Bank cites to Code of Civil Procedure section 564(b)(1), (2), (9), and (11), the Bank appears to primarily rely on Section 564(b)(11).

The evidence submitted by the Bank provides the following facts: On November 19, 2019, Iridium, by and through Rogerson, as Manager of Iridium, executed a Loan Agreement for the purpose of the Bank making a loan to Iridium in the sum of $11,895,000.00 (the “Loan”). (Declaration of David Scheiber (“Scheiber Decl.”), ¶ 4, Ex. 1.) Iridium, by and through Rogerson, made, executed and delivered to the Bank its Promissory Note dated November 19, 2019, in the principal amount of $11,895,000 (the “Note”). (Id., ¶ 5, Ex. 2.)

Through a Payment Deferral Agreement Summary and Payment Deferral Agreement, each dated May 26, 2020, certain payments under the Note were deferred (the “2020 Deferral Agreement”). (Id., ¶ 6, Ex. 3.) The maturity date of the Note was extended to May 18, 2025, through a Loan Extension Agreement and Modification of Note dated December 30, 2024 (the “2024 Extension Agreement”), and an Extension Agreement and Amendment to Loan Documents dated March 5, 2025 (the “March 2025 Extension Agreement”). (Id., ¶ 7, Exs. 4-5.)

The maturity date of the Note was extended from May 18, 2025, to January 15, 2026, through a Second Extension Agreement and Amendment to Loan Documents dated November 6, 2025 (the “November 2025 Extension Agreement”). (Id., ¶ 8, Ex. 6.)

As security for the Loan, Iridium, by an through Rogerson, executed and delivered to the Bank a Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated November 19, 2019, naming Borrower as “Trustor” and the Bank as “Beneficiary” or “Lender,” to the Property, recorded on November 26, 2019, in the Official Records of the County of Orange as Instrument No. 2019000494308 (the “Deed of Trust”). (Id., ¶ 9, Ex. 7.)

As an additional security for the Loan, Iridium, by and through Rogerson, executed and delivered to the Bank an Absolute Assignment of Rents, Lease Guaranties, Rents, Issues and Profits, dated November 19, 2019, naming Borrower as “Assignor” and the Bank as “Assignee,” recorded on November 26, 2019 in the Official Records of the County of Orange as Instrument No. 2019000494309 (the “Assignment of Rents”). (Id., ¶ 10, Ex. 8.)

The Loan Agreement, Note, 2020 Deferral Agreement, 2024 Extension Agreement, March 2025 Extension Agreement, November 2025 Extension Agreement, Deed of Trust, and Assignment of Rents are collectively referred to as the “Loan Documents”.

In connection with the Loan Documents, both Rogerson and the Michael J. Rogerson Trust Dated May 7, 2011, as Amended (“Trust”) (collectively, the “Guarantors”) each executed a Commercial Guaranty (“Guaranties”) of all “Credit” of Borrower at any time due and payable to the Bank. (Scheiber Decl., ¶¶ 12-13, Exs. 9-10.)

The Bank has performed all terms and conditions under Loan Documents it was required to perform, including without limitation advancing no less than $11,895,000.00 to Borrower, unless excused by either the Borrower or the Guarantors’ conduct. The Bank has performed all terms and conditions under the Guarantees it was required to perform, if any, unless excused by either the Borrower or the Guarantors’ conduct. (Scheiber Decl., ¶ 14.)

Iridium defaulted under the terms of the loan documents by failing to pay all sums due to the Bank on the January 15, 2026 maturity date. (Scheiber Decl., ¶ 17.)

As result of the default on the Note and Guaranties, as of April 9, 2026, the Bank is owed the sum of $11,411.964.99 consisting of the principal sum of $10,800,524.25 plus contractual interest in the sum of $122,405.95 and default interest of $489,034.79 (from May 18, 2025 to April 9, 2026). (Scheiber Decl., ¶ 20.)

Section 1.11 of the Deed of Trust states, in part:

1.11 Assignment And Collection of Rents. (a) Trustor hereby assigns absolutely to Lender the rents of the Property, with a revocable license to collect such rents as they become due and payable, prior to any default by Trustor under section 2 of this Deed of Trust, being retained by Trustor. (b) Upon any default by Trustor under section 2 of this Deed of Trust, such license will, automatically, be deemed revoked without the necessity for any act or notice by Lender, and Lender, in person, by agent or by judicially appointed receiver, shall be entitled to enter upon, take possession of and manage the Property and may collect the rents of the Property, and, after so taking possession, shall be entitled to collect any rents that are past due . . . .

(Ex. 7 to Scheiber Decl., Deed of Trust, at p. 12, § 1.11.)

Under the Deed of Trust, Iridium, is the Trustor, and the Bank is the Beneficiary (Ex. 7 to Scheiber Decl., Deed of Trust, at p. 1.) As the Beneficiary under the Deed of Trust, the Bank is a secured lender within the meaning of Code of Civil Procedure section 564(b)(11). In addition, Plaintiff’s Verified Complaint asserts a cause of action for specific performance for appointment of receiver and injunctive relief in aid of receiver (fourth cause of action).

Based on the foregoing, the Bank has demonstrated statutory grounds for appointment of a receiver by the preponderance of the evidence pursuant to Code of Civil Procedure section 564(b)(11).

The Bank submits evidence that in connection with the execution of the Loan Documents, Iridium provided to the Bank a copy of the rent roll for the Property as well as the leases for the Property; that the rent roll for the Property shows two tenants, Rogerson Aircraft with monthly rent is $44,805.00 and Rogerson Capital with a monthly rent is $113,935.00 for total monthly rent for the Property of $158,740.00; that the leases are signed by Rogerson as the managing partner of Iridium and Rogerson as the CEO of Rogerson Capital and the CEO of Rogerson Aircraft Equipment Group; that Rogerson’s Statement of Financial Condition which was provided in connection with the execution of the Loan Documents states that Rogerson is the owner and Chief Executive Officer of Rogerson Aircraft Equipment Group; and that Rogerson is a 100% owner of both Rogerson Aircraft Equipment Group and Rogerson Capital as well as that Rogerson is the 100% owner of Iridium. (Scheiber Decl., ¶¶ 23-24.)

The Bank provides that on April 8, 2026, the Bank made Demands to Pay Rent to Secured Lender Cathay Bank pursuant to Civil Code section 2938 to Rogerson Capital and Rogerson Aircraft Equipment Group, demanding that all rents otherwise due to the Borrower be turned over to the Bank; and that counsel for Rogerson Aircraft, James C. Bastian, advised that the tenants did not have sufficient operating capital to pay the rent and that rent is currently unpaid. (Scheiber Decl., ¶¶ 25-26; Declaration of Hal D.

Goldflam, ¶¶ 6-7, Ex. 2.) A subsequent email to Rogerson and Mr. Bastian on May 6, 2026, demanding that the rents were due from the Property pursuant to the leases, that they be turned over to the Bank, and inquiring as to the status elicited no response and no rents from the Property were turned over to the Bank. (Scheiber Decl., ¶ 27, Ex. 18; Declaration of Hal D. Goldflam, ¶ 8.)

The Rogerson Defendants do not dispute that the Loan has matured without full payment and that rent payments due and owing to Iridium by Rogerson Aircraft Corporation (“RAC”) and its affiliate Rogerson Capital (“RC”) have not been timely made. (Declaration of James C. Bastian, Jr. (“Bastian Decl.”), ¶¶ 3-4.)

The Bank’s objections to the Bastian Declaration and attached exhibits are SUSTAINED as to paragraphs 5, 6, 9 as to the value of the Property and value of RAEG’s assets, 10, 13 as to the value of the property in Pasadena only, and 14, and as to Exhibits 1, 2, 3, 5, 6, and 7. All other objections are OVERRULED.

The Rogerson Defendants assert that other, less intrusive remedies are available. The Rogerson Defendants provide that they have been working with RAC and US Bank to obtain consent to deferring payments due and owing to US Bank in order to free cash to make payments to Plaintiff either as a direct payment or payment of rents owed to Iridium and pledged as additional collateral to Plaintiff, and that based on RAC’s expected collections of accounts receivable in the next 7-10 days, RAC expects to be able to fund at least one rent payment by June 20, 2026. (Bastian Decl., ¶ 8.)

The Rogerson Defendants additionally provide that they have proposed that the Property be immediately placed on the market with a broker mutually acceptable to Mr. Rogerson and Plaintiff, and that the Property will be marketed for sale within the next six months to coincide with the sale of Rogerson Aircraft Equipment Group (“RAEG”). (Bastian Decl., ¶ 11.) The Rogerson Defendants provide that they are pursuing the sale or refinance of the Property but must do so in a manner consistent with the sale of the assets of RAEG which is a division of RAC; that Mr.

Rogerson has recently engaged the services of Ryan O’Toole of Lincoln International who will prepare materials to use in the marketing and sale of RAEG’s business assets, and that the Rogerson Defendants have advised Plaintiff of this and have committed to Plaintiff, US Bank and the IRS with regular reporting regarding marketing and sale activity and make Lincoln representatives available for virtual meetings and conference calls on a biweekly basis.” (Bastian Decl., ¶ 9.)

Defendants further provide that they are committed to selling other assets to generate cash to address the debts due and owing to Plaintiff, US Bank and the IRS. (Bastian Decl., ¶ 12.) Defendants’ counsel provides that Mr. Rogerson owns real property located at 403 and 401 S. Raymond Avenue in Pasadena, CA through a special purpose entity, 403 S. Raymond Avenue LLC (“Raymond Property”); that Iridium has engaged CBRE to market and sell the Raymond Property; that the list price is being set in the $30MM-$35MM range; and that meetings are to be held with CBRE in the next 7-10 days to confirm the active listing and list price and then to develop the marketing and sales plan. (Bastian Decl., ¶ 13.)

Defendants’ counsel states that this information and plan will be shared with Plaintiff, US Bank and the IRS, with regular reports provided on a bi-weekly basis regarding the sales and marketing activity, expression of interest and the like. (Bastian Decl., ¶ 13.)

Based on the foregoing, the Rogerson Defendants provide that they are actively pursuing multiple avenues to satisfy the Loan, from which they expect to be able to fund at least one rent payment by June 20, 2026, demonstrating that other, less intrusive remedies are adequate and available.

The Bank contends that the proposals for refinancing, assets sales, or coordination with other creditors as alternatives to receiver are speculative, contingent on third-party approvals, and do not provide the immediate protection of rents and profits provided by the Loan Documents, but does not specify how the proposals are speculative, and fails to show that the more intrusive oversight of a receiver is a necessity because these other, less intrusive remedies are inadequate or unavailable.

Under the above circumstances, the appointment of a receiver would be a harsh and costly remedy that would not be appropriate at this time. Consequently, the Court DENIES the OSC re: preliminary injunction and appointment of receiver.

The Rogerson Defendants to give notice.