PGP Capital Advisors, LLC v. Receivership Estate

In opposition, Plaintiffs cite to Annocki v. Peterson Enterprises, LLC, which is instructive. In Annocki, a motorcyclist was killed on the Pacific Coast Highway by a vehicle exiting a restaurant's driveway. (Annocki v. Peterson Enterprises, LLC (2014) 232 Cal.App.4th 32, 34.)

The Court of Appeal, reversing an order sustaining a demurrer, held that although the restaurant did not and could not control conditions of the highway, the configuration of the premises allowed restaurant patrons to leave the premises in a manner that was unsafe to themselves, giving rise to a duty. (Id., pp. 38-39.) The court grounded its conclusion in the general rule that a landowner may owe a duty where its property "unleash[es] forces onto public streets," such that "injury to third persons was foreseeable." (Id., at p. 38.)

Here, Plaintiffs allege Defendant's property contained a dangerously configured driveway, including lack of turnaround space and a design that required backing directly into high-speed traffic. Under Annocki, this is sufficient to establish a duty owed.

Furthermore, Defendant argues the TAC's allegations that the valet attendants warned Defendant Makhshikyan not to back onto the Pacific Coast Highway, and that he ignored them, is a judicial admission that negates duty and proximate cause. (Dem., p. 4; TAC P. 26.) While the determination of whether an act is intervening or superseding presents a question of fact, there still must be sufficient allegations of an act to survive a demurrer. (Bigbee v. Superior Court (1979) 93 Cal.App.3d 451, 456.)

Here, there are sufficient facts pled that a driver backing unsafely into traffic on the Pacific Coast Highway is the very risk the alleged driveway configuration created. (TAC, P. 31.) Additionally, Plaintiffs' allegations are sufficiently clear to show Plaintiffs seek to hold Defendant liable for negligence. Accordingly, the Defendant's demurrer is overruled as to the first cause of action.

Fifth Cause of Action: Negligence (Premises Liability)

"The elements of a cause of action for premises liability are the same as those for negligence: duty, breach, causation, and damages." (Castellon v. U.S. Bancorp (2013) 220 Cal.App.4th 994, 998.) "Premises liability is grounded in the possession of the premises and the attendant right to control and manage the premises." (Kesner v. Superior Court (2016) 1 Cal.5th 1132, 1158, quotation marks omitted.)

The Court incorporates the reasoning laid out above. Furthermore, ownership and control are adequately alleged. Plaintiffs allege the Separate Trust owned and controlled the Subject Property and its points of ingress and egress. (TAC, P.P. 10, 56.) The allegations are sufficient for purposes of demurrer. Based on the foregoing, the Court finds the fifth cause of action is sufficiently pled. Further, Plaintiffs' allegations are sufficiently clear to show Plaintiffs seek to hold Defendant liable for premises liability. Accordingly, the Defendant's demurrer is overruled as to the fifth cause of action.

Conclusion

Defendant Lloyd Saitman's Demurrer to the Third Amended Complaint is OVERRULED as to the first and fifth causes of action. Defendant Lloyd Saitman shall file and serve an answer to Plaintiffs' Third Amended Complaint within ten (10) days of entry of this order. (Cal. Rules of Court, rule 3.1320(j).)

Case Number: 25SMCP00161 Hearing Date: September 1, 2026 Dept: N TENTATIVE RULING

PGP Capital Advisors, LLC's Motion for Allowance and Payment of Administrative Claim is DENIED without prejudice.

REQUEST FOR JUDICIAL NOTICE

PGP requests that the Court take judicial notice of the following documents: 1) Order Granting Petitioner's Ex Parte Application Appointing Receiver, dated March 28, 2026, attached as Exhibit 1; 2) Receiver Stone Blossom Capital LLC's 6th Interim Monthly Report, attached as Exhibit 2; 3) Order Granting Receiver's Notice of Motion and Motion for an Order Approving Sale of All Petitioner's Assets Free and Clear of Liens, Claims, and Encumbrances, attached as Exhibit 3.

PGP's request for judicial notice is GRANTED as to Exhibits 1 and 3. The Court takes judicial notice of the existence and filing of Exhibit 2, but does not take judicial notice of the factual assertions, statements, or conclusions contained in the Receiver's 6th Interim Monthly Report.

EVIDENTIARY OBJECTIONS

The Receiver objects to parts of the Declaration of Stewart Kim, Managing Partner of PGP, submitted in support of the instant Motion. The Court OVERRULES objections 1 through 12.

REASONING

On May 22, 2025, the Receiver and PGP entered into an Engagement Letter under which PGP agreed to serve as the Receivership's Exclusive Financial Advisor in connection with any asset sale transaction. (Kim Decl., Ex. B.) The Engagement Letter required PGP to assist the Receiver in identifying potential acquirers, contacting them, preparing marketing materials, arranging management presentations, and assisting with due diligence.

Section 5 of the Engagement Letter governed termination and provided that either party could terminate the agreement after six months without liability, but further stated: "if, at any time prior to the expiration of six (6) months following the termination of this Agreement, the Company enters into any agreement that subsequently results in any Transaction, or consummates any Transaction, in each case with any person or entity who was identified by PGP during the term of this Agreement, then the Company will pay, or cause to be paid, to PGP the full amount of compensation under Section 3 above in respect of each such Transaction in cash promptly upon the closing of each such Transaction." (Ibid.)

It also contained a provision requiring the Receiver to indemnify and hold harmless PGP to the fullest extent lawful, from all claims, liabilities, losses, damages, and expenses (including reasonable and documented counsel fees and per diem personnel costs) arising out of claims related to the Engagement Letter. (Id., Annex II.)

PGP argues that on June 5, 2025, it launched a market and outreach process, contacted 91 potential parties, 34 executed non-disclosure agreements, and 31 advanced to full diligence. PGP structured and managed a multi-faceted competitive bidding process and by July 31, 2025, 14 bidders had submitted indications of interest. By the September 2, 2025 final bid deadline, 9 bidders had submitted final proposals. PGP worked closely with GF entities to conduct a detailed evaluation of each bid in order to identify structural and economic strengths and weaknesses.

However, on September 5, 2025, the Receiver prematurely terminated PGP via email. On the same day, a bidder that PGP had identified during the course of its engagement, SGI Retail, LLC, doing business as Stiiizy ("Stiiizy"), submitted a revised offer reflecting an approximately 41% increase in total consideration from its prior bid. On October 23, 2025, the Receiver conducted an auction and on November 25, 2025, Court granted the Receiver's request to approve the sale of Petitioners' assets to Stiiizy, transferring over $25 million to the Receivership Estate in connection with this transaction.

Despite its termination, PGP argues that the work it performed under the Engagement Letter conferred a substantial benefit to the Receivership Estate. On January 28, 2026, PGP issued an invoice for its work in connection with the engagement, seeking allowance and payment of $687,831.12, including out-of-pocket expenses and attorney fees; however, this amount has not been paid, compelling PGP to file the instant Motion. Moreover, PGP argues that it is entitled to attorney fees under Code of Civil Procedure section 1033.5(a)(10) and Civil Code section 1717.

The Receiver opposes PGP's claim for full compensation, arguing PGP cannot recover as though it faithfully completed its engagement when its conduct forced the termination and required the Receiver to personally salvage the sale process. PGP was hired to conduct a confidential, fair, and competitive marketing process designed to maximize value for the Receivership Estate. According to the Receiver, on September 5, 2025, it terminated PGP after learning that confidential bid information concerning the names of other bidders and the amounts of their bids had apparently been disclosed to competing market participants by representatives of PGP.

For example, Receiver received communications from Elliott Lewis of South Cord Holdings, Inc., who reported knowledge of confidential information communicated to him by PGP representatives. On September 8, 2025, Receiver's counsel issued a formal cease-and-desist demand directing PGP and its personnel to cease all third-party communications concerning Gold Flora, the bidding process, bids received, and data room information. PGP confirmed that it had ceased third-party communications regarding the identified subjects and would forward relevant correspondence to the Receiver.

Following PGP's removal, the Receiver assumed direct responsibility for work PGP had been retained to perform to uphold its court-imposed duty. The Receiver became the sole point of contact for bidders, re-established uniform ground rules, required bidders to refine and conform offers, maintained communication records, evaluated competing bid structures, reviewed financing and due diligence, restored confidence in the process, selected a stalking horse bidder, and prepared for court-supervised auction. The Receiver discovered gaps in PGP's diligence, including that PGP had not obtained definitive proof of funds from two leading bidders at the stalking-horse selection point.

PGP cannot establish that it is entitled to compensation because it was terminated due to confidentiality breaches that were material obligations under both agreements and indispensable to the competitive process. Specifically, PGP breached the Non-Disclosure Agreement executed around April 13, 2025 and the Engagement Agreement, which provided that PGP would not disclose any information regarding transactions related to the engagement which were not in the public domain. (Ormond Decl., Exs. 2-3.)

Thus, there are substantial disputes regarding breach, causation, benefit, damages, and offset. The Receiver argues that the Court should deny the Motion, or conduct an evidentiary hearing concerning PGP's disclosures, their impact on bidders and the Receivership Estate, and offsets the Receivership is entitled to. Furthermore, 1625 S. 7th St., LLC ("Landlord") filed a limited opposition to the Motion solely regarding PGP's request for attorneys' fees and costs. Landlord takes no position on PGP's claim for transaction-related fees under the Engagement Letter. The Receiver joins the limited opposition. PGP has not filed a reply addressing the Receiver's opposition or the limited opposition to its request for attorney fees and costs.

"The receiver is the agent of the court and not of any party, and as such: (1) [i]s neutral; (2) [a]cts for the benefit of all who may have an interest in the receivership property; and (3) [h]olds assets for the court and not for the plaintiff or the defendant." (Cal. Rules of Court, rule 3.1179(a).) "The receiver has, under the control of the Court, power to bring and defend actions in his own name, as receiver; to take and keep possession of the property, to receive rents, collect debts, to compound for and compromise the same, to make transfers, and generally to do such acts respecting the property as the Court may authorize." (Code Civ. Proc., Sec.568.)

"It is well settled that a trial court has broad discretion in its directions and approvals given to a receiver in respect to management of the property." (Hillman v. Stults (1968) 263 Cal.App.2d 848, 876.) "'The "main function" of the court is to manage or dispose of the property 'in the best manner possible and for the best interest of the parties concerned. To effectually perform that duty necessarily requires some flexibility and continuity of jurisdiction in giving instructions to the receiver as to the manner in which the property should be sold to meet exigencies as they may arise.' [Citations.]" (People v. Stark (2005) 131 Cal.App.4th 184, 205.)

"[C]ompensation to be allowed receivers and their attorneys is primarily within the sound discretion of the trial court." (Venza v. Venza (1951) 101 Cal.App.2d 678, 681.) "Generally, the costs of a receivership are paid from the property in the receivership estate...Courts are vested with broad discretion in determining who is to pay the expenses of a receivership, and the court's determination must be upheld in the absence of a clear showing of an abuse of discretion." (City of Chula Vista v. Gutierrez (2012) 207 Cal.App.4th 681, 685.)

Having considered the moving papers and oppositions, the Court finds that substantial disputes exist regarding whether PGP breached its confidentiality obligations under the Engagement Letter and the Non-Disclosure Agreement, whether such breaches were material, whether and to what extent the breaches caused harm to the Receivership Estate, whether the Receiver's termination of PGP was justified, and what benefit, if any, the Receivership Estate retained from PGP's pre termination efforts.

The determination of whether PGP is entitled to compensation under the Engagement Letter requires resolution of contested factual issues. The record as presented--particularly in the absence of a reply from PGP--does not permit resolution of these disputes on the papers. Thus, the Court finds that Plaintiff has not demonstrated that it is entitled to the transaction-related fees and denies the Motion. Given that the Motion is denied, the Court also denies PGP's request for attorney fees and costs.

PGP Capital Advisors, LLC's Motion for Allowance and Payment of Administrative Claim is DENIED without prejudice.

Case Number: 25SMCV04186 Hearing Date: September 1, 2026 Dept: N TENTATIVE RULING

Defendant-in-Interpleader Billy Zachary Earley's Motion for Sanctions for Misuse of the Discovery Process is DENIED. Earley to give notice.

REASONING