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Full title: Adversary case 21-03029. 31 (Approval of sale of property of estate and of a co-owner - 363(h)), 91 (Declaratory judgment) Complaint by PROFESSIONAL FINANCIAL INVESTORS, INC., Professional Investors 44, LLC against Marian O'Dowd. Fee Amount $350. (Attachments: # 1 AP Cover Sheet) (Marum, J.) (Entered: 07/16/2021)

Document posted on Jul 15, 2021 in the bankruptcy, 17 pages and 0 tables.

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This is an adversary proceeding for (1) the approval of the sale of a co-owner’s 9 interest in property held as a tenant in common with PFI and LLC 44 pursuant to 11 U.S.C. § 10 363(h), and (2) a determination and declaration pursuant to Rule 7001(9) of the Federal Rules of 11 Bankruptcy Procedure (the “Bankruptcy Rules”) of the co-owner’s respective ownership interest 12 in such property and entitlement to a proportionate distribution from the net proceeds from a sale 13 of said property based on such ownership interest according to 11 U.S.C. § 363(j).Pursuant to 11 U.S.C. § 363(h), a trustee or debtor in possession may sell both the 6 estate’s interest and the interest of any co-owner in property in which the debtor had, at the time o7 the commencement of the case, an undivided interest as a tenant in common, joint tenant, or tenan8 by the entirety, if: (i) partition in kind of such property among the estate and such co-owners is 9 impracticable; (ii) sale of the estate’s undivided interest in such property would realize 10 significantly less for the estate than sale of such property free of the interests of such co-owners; 11 (iii) the benefit to the estate of a sale of such property free of the interests of co-owners outweighs12 the detriment, if any, to such co-owners; and (iv) such property is not used in the production, 13 transmission, or distribution, for sale, of electric energy or of natural or synthetic gas for heat, 14 light, or power.(Declaratory Relief Pursuant to Bankruptcy Rule 7001(9) and 11 U.S.C. § 363(j) 14 Determining Co-Owner’s Ownership Interest in Property and Directing Debtors to Distribute Net Proceeds from Sale of Property Pursuant to Such Ownership Interest) 15 (All Plaintiffs Against the Defendant) 16 26.Pursuant to 11 U.S.C. § 363(j), after a sale of property to which 11 U.S.C. § 363(h19 applies, a trustee or debtor in possession shall distribute to the co-owners of such property and to 20 the estate, the proceeds of such sale, less the costs and expenses, not including any compensation 21 to the trustee or debtor in possession, of such sale, according to the interests of such co-owners 22 and of the estate.BEGINNING at a point on the Westerly line of Lot 151, distant North 02° 53' East, 159.23 feet from the Northerly line of Sycamore Avenue, as said Lot and Avenue are shown on that certain Map entitled, "Map of Ross Valley Park, Subdivision "2", recorded November 23, 1903 in Book 1 of Maps at Page 130, Marin County Records; thence leaving said point of beginning and running along the Westerly, Northeasterly and Easterly line of said Lot,

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1 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership 2 Including Professional Corporations ORI KATZ, Cal. Bar No. 209561 3 J. BARRETT MARUM, Cal. Bar No. 228628 JEANNIE KIM, Cal. Bar No. 270713 4 MATT KLINGER, Cal. Bar No. 307362 GIANNA SEGRETTI, Cal. Bar No. 323645 5 Four Embarcadero Center, 17th Floor San Francisco, California 94111-4109 6 Telephone: 415.434.9100 Facsimile: 415.434.3947 7 E mail okatz@sheppardmullin.com bmarum@sheppardmullin.com 8 jekim@sheppardmullin.com mklinger@sheppardmullin.com 9 gsegretti@sheppardmullin.com 10 Counsel for the Debtors 11 UNITED STATES BANKRUPTCY COURT 12 NORTHERN DISTRICT OF CALIFORNIA, SAN FRANCISCO DIVISION 13 In re Case No. 20-30604 14 (Jointly Administered) PROFESSIONAL FINANCIAL 15 INVESTORS, INC., et al.,1 Chapter 11 16 Debtors. Adv No. 17 COMPLAINT FOR SALE OF CO- PROFESSIONAL FINANCIAL OWNER’S INTEREST IN PROPERTY 18 INVESTORS, INC. and PROFESSIONAL PURSUANT TO 11 U.S.C. § 363(h) INVESTORS 44, LLC, 19 Plaintiffs, The Hon. Hannah L. Blumenstiel 20 v. 21 MARIAN O’DOWD, 22 Defendant. 23 24 25 26 1 A complete list of the Debtors and their respective chapter 11 case numbers may be found at 27 www.donlinrecano.com/Clients/pfi/index. The federal tax identification numbers of each of the Debtors is also available in the bankruptcy petitions of each Debtor, also available at the Donlin

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1 Professional Financial Investors, Inc. (“PFI”) and Professional Investors 44, LLC (“LLC 2 44,” and together with PFI, the “Plaintiffs,” and collectively with PFI and the other debtors in the 3 above-captioned jointly administered bankruptcy cases, the “Debtors”) in this Complaint for Sale 4 of Co-Owner’s Interest in Property Pursuant to 11 U.S.C. § 363(h) (the “Complaint”) against 5 Marian O’Dowd (“O’Dowd” or the “Defendant”) hereby allege and state as follows: 6 I. 7 JURISDICTION AND VENUE 8 1. This is an adversary proceeding for (1) the approval of the sale of a co-owner’s 9 interest in property held as a tenant in common with PFI and LLC 44 pursuant to 11 U.S.C. § 10 363(h), and (2) a determination and declaration pursuant to Rule 7001(9) of the Federal Rules of 11 Bankruptcy Procedure (the “Bankruptcy Rules”) of the co-owner’s respective ownership interest 12 in such property and entitlement to a proportionate distribution from the net proceeds from a sale 13 of said property based on such ownership interest according to 11 U.S.C. § 363(j). This Court ha14 jurisdiction over this adversary proceeding and its subject matter pursuant to 28 U.S.C. §§ 157 an15 1334, 11 U.S.C. §§ 363(f), (h) and (j), and Bankruptcy Rules 7001(3) and (9). 16 2. This is a core proceeding pursuant to 28 U.S.C. § 157(b)(2). 17 3. Venue in this district is proper pursuant to 28 U.S.C. §§ 1408 and 1409. 18 4. PFI and LLC 44 consent, to the extent such consent is necessary, to the entry of 19 final orders and judgments by this Court in this proceeding. 20 II. 21 FACTUAL ALLEGATIONS 22 5. Kenneth Casey founded PFI and related entity, Professional Investors Security 23 Fund, Inc. (“PISF”), as real estate investment and management firms specializing in multi-unit 24 residential and commercial properties in Northern California, and ran them, along with several 25 other PFI affiliated entities (together with PFI and PISF, the “PFI Enterprise”), up until his death 26 on May 6, 2020. 27

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1 6. In total, the Debtors own, either directly or indirectly, approximately 70 real 2 properties in Northern California (Marin and Sonoma Counties), consisting mostly of apartment 3 buildings and office buildings. 4 7. Following Mr. Casey’s death, it was uncovered that the PFI Enterprise was in 5 actuality a Ponzi scheme, and on July 16, 2020, certain asserted creditors of PISF, commenced an6 involuntary chapter 11 bankruptcy action against PISF, Case No. 20-30579 (the “PISF Case”). O7 July 26, 2020, PISF filed a consent to the entry of an order for relief in the PISF Case, which the 8 Court entered on July 27, 2020. 9 8. On July 26, 2020 (the “Petition Date”), PFI commenced its bankruptcy case by 10 filing a voluntary chapter 11 petition. Subsequently PFI commenced involuntary petitions against11 all but two of its affiliated limited liability companies (the “LLCs”) and limited partnerships (the 12 “LPs”), as follows: 13 a. On November 20, 2020, under authority granted by the Bankruptcy Court, 14 PFI commenced involuntary petitions against twenty-nine LLCs and LPs (collectively, the15 “LLC/LP Debtors”), and on December 11, 2020, PFI consented to such involuntary 16 petitions and the Court entered orders for relief. 17 b. On February 3, 2021, and February 4, 2021, PFI commenced involuntary 18 petitions against ten additional LLC affiliates of PFI, including LLC 44 (collectively, the 19 “New Debtors”). On February 17, 2021, PFI consented to the ten additional involuntary 20 petitions, and on February 18, 2021, the Court entered orders for relief. 21 9. The Debtors’ chapter 11 cases are jointly administered under Case No. 20-30604. 22 10. The Debtors, including PFI and LLC 44, continue to operate as debtors in 23 possession pursuant to sections 1101(a), 1107(a) and 1108 of the Bankruptcy Code. 24 11. On August 19, 2020, the Office of the United States Trustee appointed the Official25 Committee of Unsecured Creditors (the “OCUC”). Meanwhile, certain parties with membership 26 interests in the LLCs formed and controlled by PFI formed an ad hoc committee of LLC member27 (the “Ad Hoc Committee of LLC Members”), and certain lenders to the Debtors who are secured

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1 holders (the “Ad Hoc Committee of DOT Holders,” and collectively with the OCUC and the Ad 2 Hoc Committee of LLC Members, the “Committees”). 3 12. On the Petition Date, PFI, LLC 44, and the Defendant were co-owners as tenants i4 common of certain real estate located in Marin County, California commonly known as the 5 Sycamore Creek Apartments, which is located at 100 Sycamore Avenue, San Anselmo, Californi6 94960 (the “Property”). 7 13. The legal description of the Property is attached hereto as Exhibit A. 8 14. Pursuant to that certain The Sycamore Creek Apartments Tenancy in Common 9 Agreement dated January 1, 2019 (the “TIC Agreement”), PFI owns an undivided 35% interest in10 the Property, LLC 44 owns an undivided 58% interest in the Property, and Marian O’Dowd owns11 an undivided 7% interest in the Property (the “Defendant’s Interest”). A true and correct copy of 12 the TIC Agreement is attached hereto as Exhibit B. 13 15. An outstanding debt is secured by the Property as a whole. 14 16. On July 9, 2021, the Court entered an order approving and confirming the Second 15 Amended Joint Chapter 11 Plan of Professional Financial Investors, Inc. and Its Affiliated 16 Debtors Proposed by the Debtors and Official Committee of Unsecured Creditors and Supported 17 by the Ad Hoc LLC Members and the Ad Hoc DOT Noteholders Committee (Dated May 20, 202118 (the “Plan”). The Plan has yet to go effective. 19 17. In the meantime, the Debtors’ have engaged in the marketing of their portfolio of 20 assets and real property to potential interested purchasers, which has resulted in an offer by 21 Hamilton Zanze & Company (the “Stalking Horse Bidder”) for the purchase of approximately 60 22 real properties owned in whole or in part by the Debtors (collectively, the “Portfolio”), including 23 the Property held as tenants in common by PFI and LLC 44 with the Defendant. 24 18. To effectuate the proposed sale of the Property, PFI and LLC 44 therefore now 25 seek authority to sell it free and clear of the Defendant’s Interest. 26 /// 27 ///

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1 FIRST CLAIM FOR RELIEF (Authority to Sell Co-Owner’s Interest in Property Pursuant to 11 U.S.C. § 363(h)) 2 (All Plaintiffs Against the Defendant) 3 19. PFI and LLC 44 hereby restate, reallege, and incorporate by reference paragraphs 4 through 18 of the Complaint in their entirety. 5 20. Pursuant to 11 U.S.C. § 363(h), a trustee or debtor in possession may sell both the 6 estate’s interest and the interest of any co-owner in property in which the debtor had, at the time o7 the commencement of the case, an undivided interest as a tenant in common, joint tenant, or tenan8 by the entirety, if: (i) partition in kind of such property among the estate and such co-owners is 9 impracticable; (ii) sale of the estate’s undivided interest in such property would realize 10 significantly less for the estate than sale of such property free of the interests of such co-owners; 11 (iii) the benefit to the estate of a sale of such property free of the interests of co-owners outweighs12 the detriment, if any, to such co-owners; and (iv) such property is not used in the production, 13 transmission, or distribution, for sale, of electric energy or of natural or synthetic gas for heat, 14 light, or power. 15 21. Partition in kind of the Property between the Plaintiffs and the Defendant is 16 impracticable because the Property is considered one continuous unit and because PFI, LLC 44, 17 and the Defendant are each liable on a debt secured by the entire Property. As such, it would be 18 particularly impracticable to partition the Property between the Plaintiffs and the Defendant. 19 22. The sale of only the Plaintiffs’ undivided interests in the Property would realize 20 significantly less for the Debtors’ bankruptcy estates (collectively, the “Bankruptcy Estate”) than 21 sale of the Property free and clear of the Defendant’s Interest. Indeed, the Stalking Horse Bidder 22 has offered to purchase the Portfolio at a purchase price that reflects that multiple properties are t23 be included in the proposed sale in their entirety. However, pursuant to the Stalking Horse Asset 24 Purchase Agreement entered into between the Stalking Horse Bidder and the Debtors, there will 25 be a reduction in the proposed purchase price for the Portfolio sale should PFI and LLC 44 be 26 authorized to only sell their tenants in common interests in the Property rather the Property as a 27 whole, free and clear of the Defendant’s Interest. Moreover, the Stalking Horse Bidder could ele

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1 further reduce the proposed purchase price for the Portfolio to the detriment of the Bankruptcy 2 Estate. 3 23. The benefit to the Bankruptcy Estate of a sale of the Property free of the 4 Defendant’s Interest outweighs the detriment, if any, to the Defendant. Indeed, the Defendant 5 merely holds her interest in the Property as an investment and will receive her proportionate share6 from the net proceeds of its sale. Thus, because the Property is held by PFI, LLC 44, and the 7 Defendant as an investment property, the proposed sale of the Property, should it close, should be8 a net benefit to the Defendant rather than a detriment. 9 24. The Property is not used in the production, transmission, or distribution, for sale, o10 electric energy or of natural or synthetic gas for heat, light, or power. 11 25. Accordingly, Plaintiffs seek authority pursuant to 11 U.S.C. § 363(h) to sell the 12 entirety of the Property free and clear of the Defendant’s Interest. 13 SECOND CLAIM FOR RELIEF (Declaratory Relief Pursuant to Bankruptcy Rule 7001(9) and 11 U.S.C. § 363(j) 14 Determining Co-Owner’s Ownership Interest in Property and Directing Debtors to Distribute Net Proceeds from Sale of Property Pursuant to Such Ownership Interest) 15 (All Plaintiffs Against the Defendant) 16 26. PFI and LLC 44 hereby restate, reallege, and incorporate by reference paragraphs 17 through 25 of the Complaint in their entirety. 18 27. Pursuant to 11 U.S.C. § 363(j), after a sale of property to which 11 U.S.C. § 363(h19 applies, a trustee or debtor in possession shall distribute to the co-owners of such property and to 20 the estate, the proceeds of such sale, less the costs and expenses, not including any compensation 21 to the trustee or debtor in possession, of such sale, according to the interests of such co-owners 22 and of the estate. 23 28. According to that certain TIC Agreement as signed by the Defendant on January 24 23, 2019, and attached hereto as Exhibit B, the Defendant agreed to and holds an undivided 7% 25 ownership interest in the Property. 26 29. A judicial determination of the Defendant’s respective ownership interest in the 27 Property is necessary and appropriate to determine her respective entitlement from the net

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1 30. Accordingly, the Plaintiffs seek a declaration from the Court pursuant to 2 Bankruptcy Rule 7001(9) determining the Defendant’s respective ownership interest in the 3 Property and directing the Plaintiffs to distribute to the Defendant a share of the net proceeds fro4 any such sale of the Property, less the costs and expenses, proportionately according to the 5 Defendant’s respective ownership interest in the Property pursuant to 11 U.S.C. § 363(j). 6 PRAYER FOR RELIEF 7 WHEREFORE, PFI and LLC 44 respectfully request that the Court enter judgment agains8 the Defendant pursuant to 11 U.S.C. §§ 363(h) and (j) and Bankruptcy Rule 7001: 9 1. Authorizing PFI and LLC 44 to take sole possession of the Property; 10 2. Authorizing PFI and LLC 44 to sell the entirety of the Property free of the 11 Defendant’s Interest; 12 3. Determining and declaring, pursuant to Bankruptcy Rule 7001(9), that the 13 Defendant holds an undivided 7% interest in the Property; 14 4. Authorizing and directing PFI and LLC 44 to, pursuant to 11 U.S.C. § 363(j), 15 distribute a proportionate share of the net proceeds from the sale of the Property to the Defendant 16 equal to her respective ownership interest in the Property; and 17 5. Providing for all other just and proper relief. 18 Dated: July 16, 2021 19 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP 20 21 By /s/ J. Barrett Marum ORI KATZ 22 J. BARRETT MARUM 23 JEANNIE KIM MATT KLINGER 24 GIANNA SEGRETTI 25 Counsel for the Debtors 26 27

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EXHIBIT A EXHIBIT A

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THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN ANSELMO, IN THE COUNTY OF MARIN, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: PARCEL ONE: BEGINNING at a point on the Southerly line of Madrone Avenue, which point is the Northeast corner of Lot No. 140, as said Lot is shown and delineated on that certain Map of "Ross Valley Park Subdivision No. 2", filed in the office of the County Recorder of the County of Marin on November 23, 1903 in Book 1 of Maps at Page 130; and running thence along the Northerly and Easterly line of Lots 141 to 151, inclusive, of said Subdivision, South 36° 24' East, 96.3 feet; thence North 88° 17' East, 171.8 feet; thence North 63° 37' East, 110.0 feet; thence North 83° 30' East, 130 feet; thence South 50° 30' East, 50 feet; thence South 2° 45' East, 161.5 feet; thence South 15° 18' West, 126 feet, more or less, to a point on the Northerly line of Sycamore (Redwood) Avenue; thence Easterly along the Northerly line of Sycamore (Redwood) Avenue and crossing the Arroyo San Anselmo, 182 feet; more or less, to the Southwest corner of the first exception described in that certain Deed granted by Sydney V. Smith and Cora B. Smith to M. Butler and recorded in the office of the County Recorder of Marin County in Book 96 of Deeds at Page 39; thence running along the Westerly line of Exceptions One to Four inclusive, in said Deed to M. Butler, as above mentioned; North 45° West, 166.8 feet; thence North 10° 3' West, 113.3 feet; thence North 1° 47' West, 93.8 feet; thence North 48° 50' West, 63.6 feet; thence North 67° 49' West, 147.4 feet to the Southeast corner of Lot No. 157, as said Lot is shown on the aforementioned Map of Ross Valley Park, Subdivision No. 2; thence following the Southerly boundary of said Lot 157 in a Westerly direction 297.1 feet; thence following the Westerly boundary of said Lot 157 in a Northwesterly direction, 63 feet to the Southern line of Madrone Avenue; thence following the Southern line of Madrone Avenue in a Westerly direction 65 feet, more or less, to the point of beginning. EXCEPTING THEREFROM the following described portions: a. The portion conveyed by Michael Butler and Mary Butler, his wife, to Abbie McAdoo and John McAdoo byDeed dated November 29, 1911 and recorded April 16, 1912 in Book 143 of Deeds at Page 35. b. The portion conveyed by Michael Butler to Martha J. Edwards, by Deed dated July 28, 1922 and recordedAugust 3, 1922 in Book 6 of Official Records at Page 58. c. The portion conveyed by Katherine H. Butler et al, to Lillian V. Osborn, by Deed dated March 15, 1937 andrecorded April 1, 1937 in Book 338 of Official Records at Page 175. d. The portion conveyed by Katherine Butler et al, to Albert L. Smith and Georgia A Smith, his wife, by Deeddated December 13, 1944 and recorded December 5, 1945 in Book 480 of Official Records at Page 29. e. The portions conveyed by Watkin and Sibbald, a Co-Partnership, to Harold B. Watkin, by Deed dated August25, 1972 and recorded November 16, 1972, Book 2630, Official Records, Page 518. PARCEL TWO: BEGINNING at a point on the Westerly line of Lot 151, distant North 02° 53' East, 159.23 feet from the Northerly line of Sycamore Avenue, as said Lot and Avenue are shown on that certain Map entitled, "Map of Ross Valley Park, Subdivision "2", recorded November 23, 1903 in Book 1 of Maps at Page 130, Marin County Records; thence leaving said point of beginning and running along the Westerly, Northeasterly and Easterly line of said Lot,

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EXHIBIT A (Continued) North 02° 53' East, 144.27 feet; South 50° 30' East, 50.0 feet and South 02° 45' East, 114.612 feet; thence leaving said lot line and running North 87° 33' West, 51.386 feet to the point of beginning. BEING a portion of Lot 151 of the above referred to Subdivision. PARCEL THREE: COMMENCING at a point on the Northerly line of Sycamore (formerly Redwood) Avenue, as it now exists, which point is distant along the Westerly line of Lot 151, as shown upon the Map hereinafter referred to, 10 feet Northerly from the Southwesterly corner of said Lot; running thence Northerly along the Westerly line of said Lot, 149.23 feet to the Southwesterly corner of the Lot conveyed by Sibyl V. MacPherson to Harold B. Watkin et al, by Deed recorded August 8, 1951 in Book 695 of Official Records at Page 435; running thence Easterly along the Southerly line of said Lot so conveyed to Watkin, 51.386 feet to a point in the Easterly line of Lot 151; running thence Southerly along the Easterly line of said Lot 151, 173.088 feet, more or less, to a point on the Northerly line of Sycamore (formerly Redwood) Avenue; running thence Westerly along the Northerly line of Sycamore Avenue to the point of commencement. BEING a portion of Lot 151, as said Lot is designated upon that certain "Map of Ross Valley Park, San Anselmo, Marin County, California Subdivision Two, filed November 23, 1903 in Book 1 of Maps at Page 130, Marin County Records. PARCEL FOUR: The Southerly 10 feet of Lot 151, is designated upon that certain "Map of Ross Valley Park, San Anselmo, Marin County, California Subdivision Two", filed November 23, 1903 in Book 1 of Maps at Page 130, Marin County Records. PARCEL FIVE: Lot No. 150, as shown upon that certain Map entitled, "Ross Valley Park, San Anselmo, Marin County, California, Subdivision Two", recorded November 23, 1903 in Book 1 of Maps at Page 130, in the office of the County Recorder of the County of Marin, State of California. APN: 006-083-38

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EXHIBIT B EXHIBIT B

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