                                                          FILED
                                                           MAY 22 2013
 1
                                                       SUSAN M SPRAUL, CLERK
 2                                                       U.S. BKCY. APP. PANEL
                                                         OF THE NINTH CIRCUIT

 3                  UNITED STATES BANKRUPTCY APPELLATE PANEL
 4                            OF THE NINTH CIRCUIT
 5   In re:                        )        BAP No. EC-12-1471-JuMkD
                                   )        BAP No. EC-12-1485-JuMkD
 6   WEST COAST REAL ESTATE &      )        BAP No. EC-12-1493-JuMkD
     MORTGAGE INC.,                )        BAP No. EC-12-1498-JuMkD
 7                                 )        (cross appeals)
        Debtor.                    )
 8   ______________________________)        Bk. No.   12-30686
     DON SMITH; HOWARD BROWN, III; )
 9   WEST COAST REAL ESTATE &      )
     MORTGAGE INC.,                )
10                                 )
        Appellants/Cross-Appellees,)
11                                 )
     v.                            )        M E M O R A N D U M*
12                                 )
     SA CHALLENGER, INC.,          )
13                                 )
        Appellee/Cross-Appellant, )
14                                 )
     DOUGLAS M. WHATLEY, Trustee; )
15   UNITED STATES TRUSTEE,        )
                                   )
16      Appellees.                 )
     ______________________________)
17
                     Argued and Submitted on March 22, 2013
18                         at Sacramento, California
19                            Filed - May 22, 2013
20            Appeal from the United States Bankruptcy Court
                  for the Eastern District of California
21
         Honorable Robert S. Bardwil, Bankruptcy Judge, Presiding
22                        _______________________
23   Appearances:     Garland O’Bryan Bell, Jr., Esq. argued for
                      Appellants Don Smith, Howard Brown, III, and West
24                    Coast Real Estate & Mortgage Inc.; Joshua D.
                      Wayser, Esq. of Katten Muchin Rosenman LLP,
25                    argued for Appellee SA Challenger, Inc.
                           _________________________
26
27        *
            This disposition is not appropriate for publication.
     Although it may be cited for whatever persuasive value it may
28
     have (see Fed. R. App. P. 32.1), it has no precedential value.
     See 9th Cir. BAP Rule 8013-1.

                                      -1-
 1   Before:     JURY, MARKELL and DUNN, Bankruptcy Judges.
 2
 3            These appeals and cross-appeals arise from two sanctions
 4   orders in favor of Appellee, SA Challenger, Inc. (SACI), and
 5   against Appellants, Don Smith (Smith), Howard Brown, III (Brown)
 6   and chapter 111 debtor, West Coast Real Estate & Mortgage Inc.
 7   (West Coast)(collectively, Appellants), in the amount of $20,000
 8   to be paid jointly and severally.
 9            Appellants argue that the bankruptcy court abused its
10   discretion in awarding the sanctions under § 105 because the
11   $20,000 award was punitive in nature and the amount arbitrary
12   and lacking evidentiary support.        SACI cross-appeals,2 also
13   arguing that the bankruptcy court abused its discretion in
14   determining the amount of the sanctions.        According to SACI, the
15   record supports an award of $134,885.82, which includes
16   $33,459.82 in attorneys’ fees and $101,436.00 in missing rents
17   that were unaccounted for and constituted SACI’s cash
18   collateral.
19            We agree with Appellants that the sanctions award appears
20   arbitrary because the bankruptcy court did not explain how it
21   arrived at the $20,000 amount which it based on SACI’s
22
23
          1
            Unless otherwise indicated, all chapter and section
24   references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
     “Rule” references are to the Federal Rules of Bankruptcy
25
     Procedure and “Civil Rule” references are to the Federal Rules of
26   Civil Procedure.
          2
27          Appellees, Douglas M. Whatley, the chapter 7 trustee for
     West Coast, and the United States Trustee (UST) have not
28   participated in these matters.

                                       -2-
 1   reasonable attorneys’ fees.   As a result, we are unable to
 2   determine how the court exercised its discretion and thus cannot
 3   conduct a meaningful review of the award.   We therefore VACATE
 4   the sanctions orders and REMAND to the bankruptcy court so that
 5   it can make additional findings and explain its conclusions
 6   regarding the amount of the award.    We do not express any
 7   opinion whether the amount of the sanctions previously awarded
 8   based on SACI’s attorneys’ fees should or should not be changed.
 9        Because of our remand, we conclude that SACI’s cross-
10   appeals challenging the amount of the sanctions awarded based on
11   its attorneys’ fees are moot.   However, on the issue of
12   sanctions based on the missing rents, we AFFIRM the bankruptcy
13   court’s decision for the reasons discussed below.
14                 I.   FACTS AND PROCEDURAL BACKGROUND
15        The facts leading up to the entry of the sanctions orders
16   are a textbook example of bad faith.   Appellants’ conduct that
17   gave rise to the sanctions involved the transfer of real
18   property owned by chapter 11 debtor, Sundance Eldorado Self-
19   Storage LP (Sundance).   Sundance, through Brown, transferred the
20   property by grant deed to West Coast after U.S. Bank (Bank)
21   obtained relief from the automatic stay in Sundance’s bankruptcy
22   and on the eve of the Bank’s foreclosure.   The transfer of the
23   property was immediately followed by West Coast’s filing of a
24   chapter 11 petition, signed by Smith, the 100% owner of West
25   Coast and its president.   Needless to say, West Coast’s
26   bankruptcy filing halted the Bank’s efforts to foreclose on the
27   property due to the imposition of the automatic stay.   The facts
28   relating to the transfer of the real property are not disputed

                                     -3-
 1   on appeal3 and are as follows.
 2            Sundance was a self storage business located in Eldorado
 3   Hills, California.     On January 12, 2007, Pacific National Bank
 4   (PNB) loaned $5.95 million (Loan) to Sundance.     The Loan was
 5   secured by a deed of trust, assignment of rents, security
 6   agreement, and fixture filing recorded against Sundance’s real
 7   property.     At Sundance’s request, PNB modified the Loan three
 8   times over two years.     After the last modification, the Federal
 9   Deposit Insurance Corporation placed PNB into receivership and
10   the assets of PNB, including the Loan, were sold to the Bank.
11   Sundance defaulted on the Loan in February 2010.
12                       Sundance’s First Bankruptcy Case
13            On May 31, 2010, Sundance filed a chapter 11 petition.    The
14   bankruptcy court dismissed the case because Sundance did not
15   file the required documents.     After dismissal, the Bank filed a
16   Notice of Default and Election to Sell Under Deed of Trust with
17   respect to the property.
18                      Sundance’s Second Bankruptcy Case
19            On June 25, 2010, Sundance filed a second chapter 11
20   petition, Case No. 10-36676 (Second Sundance Bankruptcy).       Smith
21   signed the petition as manager of operations.     On July 19, 2010,
22   the Bank filed its first motion for relief from the automatic
23   stay.
24            Sundance then filed a motion to use the Bank’s cash
25   collateral.     Because Sundance was in the process of finding a
26
27
          3
            Many of the facts are taken from the bankruptcy court’s
28   written rulings dated June 27, 2012, and August 29, 2012.

                                       -4-
 1   buyer for the property, the Bank agreed that Sundance could use
 2   its cash collateral with the qualification that such use
 3   terminated if the Bank obtained relief from stay.    The Bank also
 4   required Sundance to pay 60% of its monthly interest payment on
 5   its Loan.    Sundance could not secure a buyer.
 6           After an unsuccessful second motion for relief from stay,
 7   the Bank sought relief from stay for a third time on June 15,
 8   2011.    The latter motion was continued several times to give
 9   Sundance the opportunity to reorganize the property.
10           On January 17, 2012, Sundance filed its third amended plan
11   and disclosure statement.    Peninsula Capital Group Inc.
12   (Peninsula) was the general partner for Sundance and a joint
13   proponent of the plan along with Brown, who was the owner and
14   sole officer of Peninsula.    Peninsula was seen as a potential
15   source of new funding and guarantor of the plan.
16           On March 28, 2012, the bankruptcy court held an evidentiary
17   hearing on plan confirmation and took the matter under
18   submission.
19           On April 12, 2012, the bankruptcy court issued a Memorandum
20   Decision granting the Bank relief from stay and denying
21   confirmation of Sundance’s plan of reorganization.    In granting
22   the Bank relief from stay, the court found, among other things,
23   that:    (1) Sundance defaulted under the terms of the Loan
24   documents; (2) Sundance’s plan was not feasible and likely would
25   be followed by liquidation; and (3) Sundance lacked equity in
26   the property, a plan was unlikely to be confirmed, and the
27   property was not necessary to an effective reorganization.    The
28   court entered the order granting the Bank relief from stay on

                                      -5-
 1   April 12, 2012.
 2            The Bank scheduled the foreclosure sale on June 5, 2012.
 3            On April 23, 2012, the UST filed a motion to dismiss or
 4   convert Sundance’s case to chapter 7.     Brown filed a response in
 5   favor of dismissal and opposing conversion and Sundance
 6   submitted declarations asking the bankruptcy court to stop the
 7   Bank’s foreclosure.
 8                           The State Court Lawsuit
 9            On April 30, 2012, two weeks after the bankruptcy court
10   entered its Memorandum Decision, Sundance filed a complaint and
11   application for injunctive relief in the El Dorado County
12   Superior Court (State Court) to enjoin the Bank’s then-scheduled
13   June 5, 2012 foreclosure sale.     Smith filed a declaration in
14   support of the application and served as Sundance’s
15   representative at the related hearings.     Following two hearings,
16   on May 24, 2012, the State Court denied injunctive relief.4        The
17   Bank continued with its foreclosure efforts.
18                     The Transfer of Sundance’s Property
19            On May 24, 2012, the same day that the State Court denied
20   Sundance injunctive relief, Sundance transferred its real
21   property by grant deed to West Coast.     Brown, in his individual
22   capacity, signed the grant deed on Sundance’s behalf.     The grant
23   deed was recorded on May 29, 2012, in the County of El Dorado as
24
25        4
            In their opening brief, Appellants contend that the
26   injunction was not granted because their attorney was unable to
     obtain the documents and declarations that would have shown that
27   the Bank had “probably” made misrepresentations of the Loan
     obligation to Sundance and the bankruptcy court. None of those
28   documents or declarations are in the record on appeal.

                                       -6-
 1   DOC-2012-0025784-00.
 2                            The Conversion Hearing
 3            On May 30, 2012, the bankruptcy court heard the UST’s
 4   motion to dismiss or convert the Second Sundance Bankruptcy
 5   case.     The court granted the UST’s request for conversion.
 6   Although Brown’s attorney appeared at the hearing, he did not
 7   inform the bankruptcy court, the Bank, or the UST’s office that
 8   the property had been transferred.5     The bankruptcy court
 9   entered a minute order dated June 4, 2012, converting the case
10   to chapter 7.
11                         West Coast’s Bankruptcy Case
12            The same day that Sundance’s case was converted, West Coast
13   filed a chapter 11 petition, which Smith signed as President.
14   Smith was also the 100% owner of West Coast.      The schedules
15   listed the property transferred by Sundance as West Coast’s only
16   asset and listed as creditors only the Bank and a few others
17   with minor debts.     The income listed in the past two years was
18   “Debtor Loss on Property.”     West Coast described the nature of
19   its business as real estate and mortgage without mentioning a
20   self-storage facility or relationship to the Second Sundance
21   Bankruptcy.
22            The next day, the Bank filed a Notice of Claim to Rents,
23   alerting all interested parties that the rents from the property
24
25        5
            Brown’s attorney, Mr. Isley, later stated at the
26   August 29, 2012 sanctions hearing that at the time of the hearing
     on the dismissal or conversion of Sundance’s Second Bankruptcy
27   case, he had “no clue” that “any of this stuff had happened” and
     that he “didn’t hear about it until probably several weeks
28   later.” Hr’g Tr. 8/29/12 at 11:15-23.

                                       -7-
 1   could not be used for any purpose.
 2        On June 8, 2012, the Bank filed an Expedited Motion for
 3   Relief From the Automatic Stay and For Sanctions Against Don
 4   Smith and West Coast.   The motion sought relief from the
 5   automatic stay based upon the transfer of the property followed
 6   by West Coast’s bad faith bankruptcy filing.   The Bank sought
 7   sanctions against Smith and West Coast, with the amount left for
 8   later determination, on the grounds that Smith had willfully
 9   disobeyed the bankruptcy court’s relief from stay order in the
10   Second Sundance Bankruptcy case when he transferred the property
11   outside the ordinary course to West Coast one week before the
12   foreclosure and West Coast then, in bad faith, filed the
13   bankruptcy to hinder and delay the Bank’s foreclosure.    The Bank
14   also sought dismissal of West Coast’s case under the bankruptcy
15   court’s inherent power to sanction.
16        In support of its motion, the Bank submitted the
17   declaration of Jessica M. Mickelsen.   Mickelsen — one of the
18   attorneys representing the Bank — declared that as a result of
19   West Coast’s filing, the Bank had incurred approximately $15,000
20   in attorneys’ fees and costs.
21        On June 12, 2012, West Coast filed a motion to use the
22   Bank’s cash collateral.   The motion did not mention the history
23   of Sundance’s previous use of the Bank’s cash collateral nor did
24   it mention that the Bank’s permission to use the cash collateral
25   had expired when the bankruptcy court granted the Bank’s motion
26   for relief from stay in the Second Sundance Bankruptcy.     The
27   motion also failed to disclose the transfer of the real property
28   from Sundance to West Coast.

                                     -8-
 1            The Bank opposed the cash collateral motion on several
 2   grounds:     (1) the bad faith transfer of the property; (2) West
 3   Coast’s bad faith failure to account for at least $23,895.82 of
 4   cash collateral as of June 2012, which West Coast apparently
 5   acquired from Sundance as a result of the transfer of the
 6   property; and (3) the flawed budget that West Coast submitted,
 7   including substantially decreased payments to the Bank (from
 8   $23,500 per month, which is what Bank received before Sundance
 9   stopped paying, to $13,167 per month).
10            In the end, the Bank argued that West Coast’s bad faith
11   acts in hiding cash collateral warranted sanctions under § 105,
12   including the dismissal of the case.     In support of this latter
13   request and allegations regarding the missing rents, the Bank
14   submitted Mickelsen’s declaration which stated that Sundance had
15   not filed monthly operating reports since March 2012.
16            On June 27, 2012, the bankruptcy court heard the Bank’s
17   expedited motion for relief from stay and sanctions and West
18   Coast’s motion to use cash collateral.6     Prior to the hearing,
19   the court had issued a tentative ruling granting the motion.
20   After hearing oral argument, the bankruptcy court adopted its
21   tentative ruling and issued an amended written ruling.     There,
22   the court concluded that the attempted transfer of the property
23   by Sundance to West Coast was in bad faith as to the Bank and
24   the other creditors and renters of Sundance.     The court found
25   that as to the Bank, the purported transfer was an attempt to
26
27
          6
            The bankruptcy court denied West Coast’s cash collateral
28   motion by minute order entered July 2, 2012.

                                       -9-
 1   hinder and delay its foreclosure proceeding after Sundance’s
 2   two-year attempt to confirm a plan while under the protection of
 3   the automatic stay.   As to the renters, the bankruptcy court
 4   observed that the transfer of the property put those parties in
 5   a position of owing rent to Sundance’s bankruptcy estate, while
 6   at the same time, West Coast would be attempting to collect
 7   their rent.   As to the other creditors, the court found the
 8   transfer was an attempt to retain the property and its benefits
 9   while divesting the property owner of any obligations to those
10   creditors.    Finally, the bankruptcy court found West Coast’s
11   failures to give notice of its case to any of the renters or
12   creditors as further indicia of bad faith.
13        In addition, the court did not overlook Smith’s role in
14   facilitating the transfer of the property.     The court observed
15   that Smith was the president of West Coast while simultaneously
16   acting as operations manager for Sundance and had full knowledge
17   that Sundance was a chapter 11 debtor-in-possession when he
18   orchestrated the transfer.
19        For all these reasons, the bankruptcy court found it
20   appropriate to issue sanctions against West Coast and Smith in
21   the amount of the Bank’s reasonable attorneys’ fees and costs
22   incurred in connection with West Coast’s case.     In the end, the
23   court stated that it would also award sanctions against Brown
24   for his complicity in these acts.      The bankruptcy court set a
25   further hearing to determine the amount of the sanctions for
26   August 29, 2012.
27        After the Bank obtained relief from stay, it assigned the
28   deed of trust and loan documents to SACI, a related entity to

                                     -10-
 1   the Bank.7     SACI foreclosed on the property by credit bid on
 2   June 29, 2012.
 3            On July 31, 2012, Smith filed opposition to the Bank’s
 4   motion for sanctions.     Smith admitted that the transfer took
 5   place but claimed that he did not know that the property could
 6   not be sold subject to existing financing without court
 7   approval.     Smith also maintained that he paid expenses from his
 8   private funds to run the business so as not to use any cash
 9   collateral.     As further justification for his conduct, Smith
10   contended that he believed the transfer of the property was the
11   only way to bring the Bank’s fraudulent actions before the
12   court.     Finally, Smith asserted that there was no competent
13   evidence before the bankruptcy court to support an award of
14   attorneys’ fees to the Bank.     Smith filed a separate pleading
15   objecting to Mickelsen’s declaration on the grounds that
16   (1) there was no foundation to support her assertion that the
17   Bank had incurred approximately $15,000 in fees and (2) her
18   statement was hearsay.
19            On August 1, 2012, SACI filed a motion for sanctions in
20   West Coast’s bankruptcy against Brown for his complicity in the
21   bad faith transfer of the property based on the bankruptcy
22   court’s inherent authority under § 105.     SACI alleged that Brown
23   (1) signed the grant deed that documented the transfer of the
24   property from Sundance to West Coast on the same day that the
25   State Court denied Sundance’s request to enjoin the foreclosure
26
27
          7
            Hereinafter when we refer to the Bank such references
28   apply equally to SACI and vice versa.

                                       -11-
 1   of the property and six days before the UST’s motion to dismiss
 2   or convert hearing in the Second Sundance Bankruptcy; (2) failed
 3   to disclose the transfer to the bankruptcy court at the
 4   dismissal/conversion hearing, despite the facts that the
 5   transfer occurred six days earlier, was recorded the day before
 6   the hearing, and counsel for Brown appeared at the hearing and
 7   presented argument; and (3) failed to seek approval from the
 8   bankruptcy court before transferring the property.    Based on
 9   these acts, SACI sought sanctions against Brown in the amount of
10   $147,078.82 that consisted of its legal fees and costs and
11   missing rents for the months of June, July, and August 2012,
12   which constituted its cash collateral.
13           SACI submitted the declaration of Joshua D. Wayser, counsel
14   for SACI, in conjunction with its motion.    Wayser declared that
15   he reviewed his firm’s bills for the months of June and July
16   2012 and as of July 27, 2012, the fees totaled $33,459.82.
17   Attached to Wayser’s declaration were redacted bills evidencing
18   the charges.    Wayser further sought as sanctions the missing
19   rents in the estimated amount of $113,619.    That amount was
20   subsequently reduced to $101,436 based upon $12,183 SACI
21   received after taking possession of the property on August 6,
22   2012.    Wayser declared that SACI was seeking the missing rents
23   as sanctions because it otherwise would have been entitled to
24   collect the rents for those months had the transfer of the
25   property and subsequent bankruptcy not occurred and had SACI
26   been allowed to timely foreclose on the property.
27           On August 13, 2012, the UST filed a statement regarding the
28   Bank’s motion for sanctions and related declaration of Smith.

                                      -12-
 1   The UST stated that the unauthorized transfer of the property
 2   was an egregious breach of duty on the part of the responsible
 3   representatives of Sundance.    Beyond this, the UST did not take
 4   a position on the motion.   However, the UST pointed out that
 5   Smith’s declaration should not be read to imply that Smith did
 6   not know that the transfer of the property had been recorded at
 7   the time he met with the UST.   Smith declared that he learned
 8   about the recording on the afternoon of May 30, 2012, but he met
 9   with the UST after that date and did not inform counsel for the
10   UST about the transfer of the property.   Attached to the UST’s
11   statement of position was the declaration of Jason Blumberg
12   which verified the meeting date between Smith and the UST.
13        On the same date, SACI filed a reply in support of the
14   motion for sanctions against Smith.    SACI pointed out that Smith
15   continued to thwart SACI’s exercise of ownership rights over the
16   foreclosed property.   SACI maintained that due to Smith’s
17   actions, it filed an adversary proceeding against him seeking a
18   temporary restraining order (TRO) and preliminary injunction
19   which the bankruptcy granted on August 1, 2012, and August 13,
20   2012, respectively.    Based on Smith’s conduct, SACI argued that
21   significant sanctions were warranted to deter his conduct.
22   According to SACI, there were no mitigating factors — Smith had
23   been through two personal bankruptcies and thus plainly had
24   knowledge of the bankruptcy process and the necessity for
25   obtaining court approval for certain transactions.   In the end,
26   SACI requested the bankruptcy court to award it not only the
27   full amount of its attorneys’ fees and costs, but also the
28   amount for the missing rents.

                                     -13-
 1        On August 15, 2012, Brown filed an opposition to SACI’s
 2   motion for sanctions.   Brown asserted that the bankruptcy court
 3   should abstain from exercising jurisdiction over the tort
 4   (sanctions) claim of SACI.    Brown argued that he and Peninsula
 5   were outside third parties and had no involvement with the West
 6   Coast proceedings and that a judgment against Brown would have
 7   no possible effect on West Coast’s rights or the handling of its
 8   estate.   According to Brown, the third party action should be
 9   taken in state court.   He further argued that the sanctions
10   motion required an adversary proceeding because SACI sought to
11   essentially have Brown turn over all income from the property
12   allegedly received by Sundance and West Coast for the months of
13   June, July and August 2012.   Brown also maintained that he did
14   not have any personal involvement because he signed the grant
15   deed in his capacity as president of Peninsula.
16        Finally, Brown argued that there was no evidence submitted
17   to support SACI’s claim of damages for the missing rents nor was
18   SACI entitled to assert a cash collateral claim after the
19   trustee’s sale which extinguished the note and deed of trust.
20   With respect to the attorneys’ fees, Brown complained that
21   Wayser’s hourly rate of $675 was far above sums awarded to
22   attorneys in the Eastern District of California.   Brown further
23   pointed out that the billing statements were improper because
24   the services were lumped together, the descriptions insufficient
25   to understand what services were performed, and the hours were
26   not revised despite some entries being redacted.
27        On August 15, 2012, West Coast also filed opposition to the
28   Bank’s sanctions motion.   West Coast’s opposition simply

                                     -14-
 1   incorporated Smith’s and Brown’s arguments set forth in their
 2   memoranda.
 3        On August 20, 2012, Smith filed a sur-reply to the Bank’s
 4   motion for sanctions.   Smith argued that Wayser’s declaration
 5   should be stricken because Wayser had not stated facts that
 6   would establish a foundation for the estimated attorneys’ fees
 7   and furthermore, the declaration constituted hearsay.    Smith
 8   also reiterated some of Brown’s arguments; i.e., that Wayser’s
 9   hourly rate was too high and the billing statements did not have
10   detailed time and expense entries.     In addition, Smith contended
11   that SACI’s claim of missing rents was a “new matter” because it
12   was not contained in the Bank’s original motion for sanctions
13   and thus should be stricken.   On the same day, Smith filed a
14   separate pleading containing his evidentiary objections to
15   Wayser’s declaration.
16        The bankruptcy court then issued a tentative ruling
17   finding, among other things, that SACI incurred attorneys’ fees
18   of at least $20,000 due to Smith’s and Brown’s actions, and that
19   such amount should be payable jointly and severally by Smith,
20   Brown and the debtor.
21        At the August 29, 2012 sanctions hearing, Smith’s attorney,
22   Mr. Bell, requested the bankruptcy court to rule on Smith’s
23   evidentiary objections.   Bell also maintained that Smith was
24   unable to pay the $20,000 award due to Smith’s personal
25   bankruptcy which he had filed a few years before.    Finally, Bell
26   asserted that $5,000 would be appropriate due to the lack of
27   evidence supporting the larger award and the circumstances of
28   the case.    Brown’s attorney, Isley, essentially reiterated the

                                     -15-
 1   arguments set forth in Brown’s pleadings as mentioned above.
 2            Wayser responded by first noting that his firm gave a 15%
 3   discount on all the fees so that the $675 hourly rate was not
 4   accurate.     Next, Wayser argued that as to the amount of the
 5   fees, they provided the bills and did not seek any of the
 6   attorneys’ fees in the related adversary proceeding against
 7   Smith.8
 8            The bankruptcy court stated that none of the arguments had
 9   changed its previous view of the case.      The court took the
10   matter under submission and, on the same day, issued final
11   rulings in the matters.     With respect to Brown, the bankruptcy
12   court found:     (1) Brown’s conduct in signing the grant deed in
13   favor of West Coast constituted bad faith and willful misconduct
14   sufficient to justify an award of sanctions against him under
15   the court’s inherent power; (2) Brown breached his fiduciary
16   duties to the Sundance bankruptcy estate and its creditors; and
17   (3) no adversary proceeding was needed because the matter did
18   not involve turnover of funds, but was instead a request for an
19   award of sanctions under the court’s inherent power.      The
20   bankruptcy court granted SACI’s motion in part by awarding its
21   reasonable attorneys’ fees in the sum of $20,000 against
22   Appellants, jointly and severally.       The court stated that the
23   fees incurred were for the Bank’s motion for relief from stay
24   and to dismiss West Coast’s case, for seeking sanctions against
25
26        8
            Recall that the adversary related to SACI’s motion for a
27   TRO and preliminary injunction against Smith who continued to
     thwart SACI’s attempts to gain possession of the property after
28   SACI foreclosed.

                                       -16-
 1   West Coast and Smith, and for SACI’s motion for sanctions
 2   against Brown.   The bankruptcy court did not further elaborate
 3   as to how it arrived at the $20,000 amount.
 4        In a separate ruling concerning West Coast and Smith, the
 5   bankruptcy court found:   (1) Smith’s explanations regarding the
 6   transfer of the property were not credible; (2) West Coast’s and
 7   Smiths’ conduct in initiating and completing the transfer of the
 8   property and the filing of the chapter 11 petition constituted
 9   bad faith and willful misconduct sufficient to justify an award
10   of sanctions against them; and (3) the amount of $20,000 to be
11   paid jointly and severally with Brown was an appropriate
12   sanction.
13        In addressing SACI’s request for sanctions in the amount of
14   the missing rents, the bankruptcy court noted that after the
15   foreclosure, the real property and rights to its rents were no
16   longer property of the estate.    Due to this fact and relying on
17   Fietz v. Great W. Sav. (In re Fietz), 852 F.2d 455, 457 (9th
18   Cir. 1988), the bankruptcy court stated it was not persuaded
19   that it had jurisdiction to award sanctions for conduct that
20   interfered with SACI’s rights to the real property and the
21   rental income post-foreclosure.
22        However, the bankruptcy court, assuming for the purpose of
23   ruling that it had jurisdiction, denied SACI’s request for
24   sanctions in the amount of the missing rents.   The court
25   reasoned that any damages arising from post-foreclosure conduct
26   were between SACI, on the one hand, and West Coast, Smith and
27   Brown, on the other, and any connection with the bankruptcy
28   estate was tangential at best.    The bankruptcy court’s decision

                                      -17-
 1   was without prejudice to SACI’s right to seek, in another court,
 2   an award of additional amounts on account of rents lost as a
 3   result of West Coast’s and Smith’s post-foreclosure conduct, and
 4   without prejudice to SACI’s right to seek, in another court, an
 5   award of damages or other relief on any other basis.
 6            The bankruptcy court entered the two orders granting
 7   sanctions in favor of SACI and against Appellants on August 30,
 8   2012.9     The order entered in connection with the Bank’s motion
 9   awarded sanctions against West Coast and Smith (Smith Order).
10   The order entered with respect to SACI’s motion awarded
11   sanctions against Brown (Brown Order).      Both orders indicate
12   that a single sanction in the amount of $20,000 was imposed
13   against the Appellants and is payable jointly and severally.
14            Appellants filed a single notice of appeal for both the
15   sanctions orders on September 12, 2012.         The Smith Order was
16   assigned BAP No. EC-12-1471 and the Brown Order was assigned BAP
17   No. EC-12-1485.
18            SACI filed a notice of cross-appeal from both orders on
19   September 26, 2012.     The cross-appeal of the Smith Order was
20   assigned BAP No. EC-12-1493 and the cross-appeal of the Brown
21   Order was assigned BAP No. EC-12-1498.
22                              II.   JURISDICTION
23            The bankruptcy court had jurisdiction over this proceeding
24   under 28 U.S.C. §§ 1334 and 157(a) and (b)(1).        We have
25
          9
26          The orders provided that the sanctions were payable no
     later than September 20, 2012. It does not appear that
27   Appellants obtained a stay pending appeal and there is no
     indication in the record that any of the sanctions award has been
28   paid by either Smith or Brown.

                                       -18-
 1   jurisdiction under 28 U.S.C. § 158.
 2                                 III.    ISSUES
 3         A.   Whether the bankruptcy court abused its discretion in
 4   awarding sanctions in the amount of $20,000 against Appellants;
 5   and
 6         B.   Whether the bankruptcy court abused its discretion in
 7   denying SACI’s request for sanctions based on the amount of
 8   missing rents which constituted SACI’s cash collateral.
 9                          IV.   STANDARDS OF REVIEW
10         An award or denial of sanctions under § 105(a) is reviewed
11   for abuse of discretion.     Nash v. Clark Cnty. Dist. Attorney’s
12   Office (In re Nash), 464 B.R. 874, 878 (9th Cir. BAP 2012).          The
13   appropriateness of the amount of the sanctions imposed also is
14   reviewed for an abuse of discretion.        Asher v. Film Ventures
15   Int’l, Inc. (In re Film Ventures Int’l, Inc.), 89 B.R. 80, 83
16   (9th Cir. BAP 1988).
17         We review the bankruptcy court’s evidentiary rulings for an
18   abuse of discretion.    Latman v. Burdette, 366 F.3d 774, 786 (9th
19   Cir. 2004).   To reverse on the basis of an erroneous evidentiary
20   ruling, we must conclude not only that the bankruptcy court
21   abused its discretion, but also that the error was prejudicial.
22   Id.
23         A bankruptcy court abuses its discretion if it applied the
24   wrong legal standard or its findings were illogical,
25   implausible, or without support in the record.
26   TrafficSchool.com, Inc. v. Edriver Inc., 653 F.3d 820, 832 (9th
27   Cir. 2011).
28

                                          -19-
 1                               V.   DISCUSSION
 2        Bankruptcy courts have inherent sanction power under
 3   § 105(a) which states in relevant part:       “The court may issue
 4   any order, process, or judgment that is necessary or appropriate
 5   to carry out the provisions of this title. . . .”      See also
 6   Miller v. Cardinale (In re DeVille), 361 F.3d 539 (9th Cir.
 7   2004); Caldwell v. Unified Capital Corp. (In re Rainbow
 8   Magazine), 77 F.3d 278, 284 (9th Cir. 1996).       “The court’s
 9   inherent authority to sanction includes not only the authority
10   to sanction a party, but also the authority to sanction the
11   conduct of a nonparty who participates in abusive litigation
12   practices, or whose actions or omissions cause the parties to
13   incur additional expenses.”      In re Avon Townhomes Venture,
14   433 B.R. 269, 304 (Bankr. N.D. Cal. 2010) (citing Chambers v.
15   NASCO, Inc., 501 U.S. 32, 50–51 (1991) (affirming imposition of
16   sanctions on an individual for conduct before other tribunals
17   that constituted an abuse of process, even though the individual
18   was not a party when the misconduct occurred); and In re Rainbow
19   Magazine, Inc., 77 F.3d at 278 (upholding sanctions levied under
20   the court’s inherent powers against corporate debtor’s principal
21   who orchestrated the bad faith filing of the bankruptcy
22   petition)).
23        The bankruptcy court’s inherent sanction power allows it to
24   deter and provide compensation for bad faith litigation.      See
25   Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178, 1196 (9th Cir.
26   2003).   Before the bankruptcy court imposes sanctions under its
27   inherent power, it must make an explicit finding of bad faith or
28   willful misconduct.   Id.   “[B]ad faith or willful misconduct

                                       -20-
 1   consists of something more egregious than mere negligence or
 2   recklessness.”    Id.
 3        Once a finding of bad faith or willful misconduct has been
 4   made, a court may award attorneys’ fees and costs as a sanction
 5   to compensate the prevailing party for expenses incurred by his
 6   or her opponent’s bad faith litigation tactics.     Chambers,
 7   501 U.S. at 45-46.      However, the long-settled rule is that
 8   inherent powers must be exercised with restraint and discretion.
 9   Id. at 44.     Thus, the “court should be cautious in exerting its
10   inherent power and ‘must comply with the mandates of due
11   process, both in determining that the requisite bad faith exists
12   and in assessing fees.’”     Id. at 50.
13   A.   The Merits:     Appeals EC-12-1471 and EC-12-1485
14        Here, the bankruptcy court made express findings regarding
15   Appellants’ bad faith and willful misconduct which is the
16   primary prerequisite for sanctions under the court’s inherent
17   power.   In re Dyer, 322 F.3d at 1196.     Indeed, the sanctionable
18   conduct of West Coast, Smith and Brown included complicity in
19   transferring Sundance’s property to West Coast followed by West
20   Coast’s bankruptcy filing on the eve of the Bank’s scheduled
21   foreclosure.    According to the bankruptcy court, these acts were
22   part of a scheme to harass, delay and increase the Bank’s and
23   SACI’s litigation costs.     Appellants do not challenge any of the
24   bankruptcy court’s bad faith findings on appeal, instead
25   complaining that the sanctions award was punitive in nature,
26   arbitrary in amount and lacked evidentiary support.
27                    The Punitive Nature of the Sanctions
28        Because the court lifted the stay and voided the transfer

                                       -21-
 1   of the property, Appellants assert that this was a sufficient
 2   sanction against Smith and West Coast.   Therefore, any sanctions
 3   beyond this, Appellants argue, were punitive and thus exceeded
 4   the bankruptcy court’s inherent authority.
 5        Smith had made this same argument in the bankruptcy court,
 6   which the court rejected noting that the order lifting the stay
 7   operated in conjunction with the Bank’s foreclosure to deprive
 8   Smith and West Coast of property that should not have been
 9   theirs in the first place.    We agree with the bankruptcy court’s
10   conclusion that nothing of value was taken from Smith or West
11   Coast and, therefore, their asserted “loss” did not operate as a
12   sanction against them.
13        Moreover, the bankruptcy court explicitly stated that the
14   sanctions award was based on SACI’s attorneys’ fees incurred as
15   a result of Appellants’ bad faith conduct.   Sanctions based on
16   attorneys’ fees are compensatory and within the bankruptcy
17   court’s inherent authority.   In re DeVille, 361 F.3d at 546;
18   see also Chambers, 501 U.S. at 44 (the less severe sanction of
19   an assessment of attorneys’ fees is undoubtedly within a court’s
20   inherent power).   Furthermore, compensatory sanctions are not
21   considered criminal penalties:    “Civil penalties must either be
22   compensatory or designed to coerce compliance.”   In re Dyer,
23   322 F.3d at 1192 (citing F.J. Hanshaw Enters., Inc. v. Emerald
24   River Dev., Inc., 244 F.3d 1128, 1137–38 (9th Cir. 2001)); see
25   also Lasar v. Ford Motor Co., 399 F.3d 1101, 1110 (9th Cir.
26   2005) (sanctions that compensate for harm caused are civil).
27   Accordingly, the sanctions awarded based on SACI’s attorneys’
28   fees were compensatory and not punitive in nature.

                                      -22-
 1                       The Amount of the Sanctions
 2         Appellants next complain that the bankruptcy court abused
 3   its discretion in awarding sanctions because (1) there was no
 4   admissible evidence to support the award of attorneys’ fees10 and
 5   (2) the award was arbitrary because the court failed to explain
 6   how it arrived at the $20,000 amount.   We address each of these
 7   arguments in turn below.
 8         Smith objected to Wayser’s declaration which attached his
 9   law firm’s billing records on the grounds that (1) it was not
10   admissible under Fed. R. Evid. 602 for lack of personal
11   knowledge, and (2) it constituted hearsay and thus was not
12   admissible under Fed. R. Evid. 803(6), the business records
13   exception.11   Appellants contend the bankruptcy court erred
14   because it did not rule on these objections.      Appellants’
15   contention is incorrect.   In its written ruling dated August 29,
16   2012, the bankruptcy court explicitly found that Wayser’s
17   declaration “sufficiently establishes a foundation for the
18   testimony that true and correct copies of the firm’s billing
19   statements are filed as exhibits.”    The court further opined:
20         It is difficult to understand what further evidence
           Smith would require [-] a declaration from each
21         individual who worked on the case? In any event, the
           court is satisfied that the billing statements
22         demonstrate, by clear and convincing evidence, to the
           extent that is necessary, that attorneys’ fees of at
23
24        10
            Indeed, at oral argument, Appellants’ attorney emphasized
     that the primary reason, if not the sole reason, for seeking
25
     reversal of the sanctions award was the lack of evidentiary
26   support.
          11
27          Although Smith had also objected to Mickelsen’s
     declaration on the same grounds, SACI supplemented the record
28   with Wayser’s declaration.

                                    -23-
 1        least $20,000 were reasonably incurred as a direct
          result of Smith[’]s unconscionable actions detailed
 2        above.
 3   Moreover, at the very least, the bankruptcy court was aware of
 4   the objections at the August 29, 2012 hearing and implicitly
 5   overruled them when it stated that “I didn’t hear anything today
 6   that changed my position in regards to the tentative.”
 7   We thus conclude that the objections were overruled and the
 8   evidence was admitted.
 9        Fed. Rule Evid. 602 states that “[a] witness may not
10   testify to a matter unless evidence is introduced sufficient to
11   support a finding that the witness has personal knowledge of the
12   matter.”   See also United States v. Dibble, 429 F.2d 598, 602
13   (9th Cir. 1970) (“The foundation is laid for receiving a
14   document in evidence by the testimony of a witness with personal
15   knowledge of the facts who attests to the identity and due
16   execution of the document and, where appropriate, its
17   delivery.”).   In his declaration, Wayser stated that he was one
18   of the attorneys at his firm responsible for representing SACI
19   in the bankruptcy case and the adversary proceeding.    He further
20   stated that based on that responsibility, he had personal
21   knowledge of the facts contained in his declaration.    Wayser
22   also summarized the services that his firm performed in the West
23   Coast bankruptcy case and stated that he reviewed the firm bills
24   for the months of June and July 2012.   These statements
25   sufficiently show that Wayser “actually perceived or observed
26   that which he testified to.”   Latman, 366 F.3d at 786.
27        In addition, although reasonable minds could differ,
28   Wayser’s testimony was sufficient to establish the accuracy and

                                    -24-
 1   trustworthiness of the billing statements for purposes of the
 2   business records exception to hearsay under Fed. R. Evid.
 3   803(6).   See United States v. Bonallo, 858 F.2d 1427, 1435 (9th
 4   Cir. 1988) (The business records exception to hearsay under Fed.
 5   R. Evid. 803(6) is available where the record is “(1) made or
 6   based on information transmitted by a person with knowledge at
 7   or near the time of the transaction; (2) made in the ordinary
 8   course of business; and (3) trustworthy, with neither the source
 9   of information nor method or circumstances of preparation
10   indicating a lack of trustworthiness.”).
11        In sum, “[i]n non-jury cases, the [bankruptcy] judge is
12   given great latitude in the admission or exclusion of evidence.”
13   Holliger v. United States, 651 F.2d 636, 640 (9th Cir. 1981).
14   Accordingly, we discern no reversible error on the evidentiary
15   grounds asserted by Appellants.
16        However, we agree with Appellants that the record is
17   insufficient for us to conduct a meaningful review of the
18   court’s decision to award the amount of $20,000 in sanctions
19   based on SACI’s attorneys’ fees.   In Padgett v. Loventhal,
20   706 F.3d 1205 (9th Cir. 2013), the Ninth Circuit recently
21   reminded us that courts must show their work when calculating
22   attorneys’ fees.   See also Chalmers v. City of L.A., 796 F.2d
23   1205, 1213 (9th Cir. 1986), amended by 808 F.2d 1373 (9th Cir.
24   1987) (vacating fee award when the order contained no
25   explanation of how the court arrived at the award).   That was
26   not done by the bankruptcy court here.
27        Where monetary sanctions are awarded, “the amount of the
28   monetary sanctions must be ‘reasonable.’”   Leon v. IDX Sys.

                                    -25-
 1   Corp., 464 F.3d 951, 961 (9th Cir. 2006) (citing Brown v. Baden
 2   (In re Yagman), 796 F.2d 1165, 1184 (9th Cir. 1986), amended by
 3   803 F.2d 1085 (1986)).
 4        When the sanctions award is based upon attorney’s fees
          and related expenses, an essential part of determining
 5        the reasonableness of the award is inquiring into the
          reasonableness of the claimed fees. Recovery should
 6        never exceed those expenses and fees that were
          reasonably necessary to resist the offending action
 7        . . . the court must make some evaluation of the fee
          breakdown submitted by counsel.
 8
 9   In re Yagman, 796 F.2d at 1184.    The Ninth Circuit has held in
10   other contexts that the lodestar approach is a proper method for
11   determining the reasonableness of attorneys’ fees.     Ballen v.
12   City of Redmond, 466 F.3d 736, 745-46 (9th Cir. 2006)
13   (characterizing the lodestar figure as the “presumptively
14   accurate measure of reasonable fees” when calculating
15   permissible fees under 42 U.S.C. § 1988); see also Gisbrecht v.
16   Barnhart, 535 U.S. 789, 801 (2002) (“The ‘lodestar’ figure has,
17   as its name suggests, become the guiding light of our
18   fee-shifting jurisprudence.”).    The starting point for computing
19   the lodestar amount is to multiply the number of hours the
20   prevailing party reasonably expended on the litigation by a
21   reasonable hourly rate.   Caudle v. Bristow Optical Co., Inc.,
22   224 F.3d 1014, 1028 (9th Cir. 2000).     The hourly rates used must
23   be “in line with those prevailing in the community for services
24   by lawyers of reasonably comparable skill, experience and
25   reputation.”   Blum v. Stenson, 465 U.S. 886, 895 (1984).
26        Another factor for determining reasonableness is the
27   sanctioned party’s ability to pay.      In re Yagman, 796 F.2d at
28   1184; see also Haynes v. City and Cnty. of S.F., 688 F.3d 984,

                                      -26-
 1   987 (9th Cir. 2012) (awards under 28 U.S.C. § 1927 are
 2   discretionary such that the court may permissibly take ability
 3   to pay into account, although courts are not required to limit
 4   an award to the amount that the sanctioned attorney is able to
 5   pay); and White v. Gen. Motors Corp., Inc., 908 F.2d 675, 684–85
 6   (10th Cir. 1990) (factors relevant to determine an appropriate
 7   amount of monetary sanctions include the reasonableness of the
 8   amount requested, the minimum necessary to deter a repetition of
 9   the conduct, and the ability to pay the sanction.).
10        Here, there is no indication in the record as to how the
11   bankruptcy court calculated the $20,000 amount.   The court does
12   not state the number of hours that it found reasonable for the
13   work performed nor does it set forth the hourly rate which it
14   applied.   See Tutor-Saliba Corp. v. City of Hailey, 452 F.3d
15   1055, 1065 (9th Cir. 2006) (vacating fee award when order failed
16   to state, among other things, the number of hours being
17   compensated or the hourly rate applied).   The mandate that
18   courts show their work is all the more important in cases where,
19   as here, some of the entries have been redacted and Wayser’s
20   hourly rate appears to be far above the prevailing community
21   rates even though discounted.12   Finally, although attorney Bell
22   argued that Smith had little ability to pay significant
23   sanctions because Smith filed bankruptcy in 2009 and 2010, it is
24   unclear whether the bankruptcy court took this factor into
25
26
27
         12
            The record does not contain any competent evidence on
28   what is a reasonable rate for the community.

                                    -27-
 1   consideration when determining the reasonableness of the fees.13
 2   See In re Yagman, 796 F.2d at 1184; Haynes, 688 F.3d at 987.
 3           We also note that when a bankruptcy court imposes sanctions
 4   pursuant to its inherent power, the court “should limit
 5   sanctions to the opposing party’s more ‘direct’ costs, that is,
 6   the costs of opposing the offending pleading or motion.”        Orange
 7   Blossom Ltd. P’ship v. S. Cal. Sunbelt Devs., Inc. (In re S.
 8   Cal. Sunbelt Devs., Inc.), 608 F.3d 456, 466 (9th Cir. 2010)
 9   (quoting Lockary v. Kayfetz, 974 F.2d 1166, 1178 (9th Cir.
10   1992)).    Under this precedent, fees and expenses incurred for
11   preparing and prosecuting the sanctions motions are generally
12   not authorized.14
13           In sum, because the bankruptcy court did not “show its
14   work,” we vacate the sanctions orders and remand to allow the
15   court to explain its reasoning on the reasonableness of the
16   fees.
17   B.      The Merits:   Cross-Appeals EC-12-1493 and EC-12-1498
18           Because of our decision to vacate and remand, SACI’s cross-
19   appeals on the amount of the sanctions based on its attorneys’
20   fees are rendered moot.     However, we still must address SACI’s
21   cross-appeals relating to the bankruptcy court’s denial of
22   sanctions in the amount of $101,435.00 based on the missing
23
24        13
            Besides Smith’s two bankruptcies, we found no financial
     statements or other evidence in the record which demonstrated
25
     Smith’s current financial condition.
26        14
            The bankruptcy court stated in its written rulings that
27   its award was based on reasonable fees and costs incurred for,
     among other things, the motions for sanctions against West Coast,
28   Smith and Brown.

                                       -28-
 1   rents.
 2        SACI maintains that it would have received this amount in
 3   rent for the months of June, July and August 2012 (at the rate
 4   of $37,873 per month) had it been able to take possession of the
 5   property at the beginning of June 2012; as it would have without
 6   Appellants’ bad faith acts.   Because of Appellants’ conduct,
 7   SACI contends that it was not able to foreclose until June 29,
 8   2012, and, even then, it was unable to gain possession of the
 9   property until August 6, 2012, allegedly due to Smith’s post-
10   foreclosure conduct.   SACI argues that due to the outrageousness
11   of Appellants’ conduct, the bankruptcy court abused its
12   discretion by awarding a de minimis amount in sanctions which
13   failed to make it whole or deter repeat conduct.   We are not
14   persuaded.
15        We mention first that generally a bankruptcy court has the
16   inherent power to regulate the conduct of those before it, even
17   in the absence of subject matter jurisdiction.   Willy v. Coastal
18   Corp., 503 U.S. 131, 137–38 (1992) (upholding Rule 11 sanctions
19   before court of appeals determined district court lacked subject
20   matter jurisdiction); 5A Charles Alan Wright & Arthur R. Miller,
21   Federal Practice and Procedure: Civil § 1336, at 632 (3d ed.
22   2005).   Here, the bankruptcy court assumed it had subject matter
23   jurisdiction to award SACI sanctions in the amount of the
24   missing rents and, in the exercise of its discretion, denied
25   SACI’s request.
26        Reversal on abuse of discretion grounds is not proper
27   unless we have “a definite and firm conviction that the
28   bankruptcy court committed a clear error of judgment in the

                                    -29-
 1   conclusion it reached after weighing the relevant factors.”
 2   United States v. Gould (In re Gould), 401 B.R. 415, 429 (9th
 3   Cir. BAP 2009), aff’d on other grounds, 603 F.3d 1100 (9th Cir.
 4   2010).   By the same token though, “a bankruptcy court
 5   necessarily abuses its discretion if it bases its decision on an
 6   erroneous view of the law or clearly erroneous factual
 7   findings.”   Id.; TrafficSchool.com, Inc., 653 F.3d at 832.
 8        In denying SACI’s request for sanctions in the amount of
 9   the missing rents, the bankruptcy court considered the following
10   factors:   (1) SACI’s claim for the missing rents against West
11   Coast, Smith and Brown was essentially a “two party” dispute
12   with little, or no, effect on West Coast’s bankruptcy estate;
13   (2) there were few, if any, remaining assets belonging to West
14   Coast’s estate after SACI obtained relief from stay; and
15   (3) SACI could pursue its damage claim against Smith and Brown
16   for the missing rents in the state court.   After carefully
17   weighing these factors, the bankruptcy court could reasonably
18   conclude that SACI had not made a strong enough showing for the
19   imposition of sanctions under the court’s inherent power based
20   on the amount of the missing rents.
21        SACI does not argue in its cross-appeals that the
22   bankruptcy court’s findings were illogical, implausible, or
23   without support in the record.    Indeed, the relationship between
24   SACI’s damage claim for the missing rents and SACI’s direct
25   costs in opposing the transfer of the property and West Coast’s
26   bad faith filing became tenuous at best after SACI foreclosed.
27   In addition, although sanctions under § 105 serve the dual
28   purposes of compensation and deterrence, we are not convinced

                                      -30-
 1   that SACI’s citations to In re Simmons, 2011 WL 3957439, at *1
 2   (Bankr. N.D. Cal. 2011), In re Avon Townhomes Venture, 433 B.R.
 3   at 304, or Rentz v. Dynasty Apparel Indus., Inc., 556 F.3d 389,
 4   399-400 (6th Cir. 2009), compel a different result.    These cases
 5   are factually distinguishable and simply reiterate the general
 6   premise that under certain circumstances an award in the full
 7   amount of the attorneys’ fees incurred may be warranted to serve
 8   the dual purpose of deterrence and making the party which
 9   incurred the fees whole.    None of these cases addresses an award
10   of sanctions for missing rents under § 105 nor do they discuss
11   any factors relevant to such an inquiry.
12        In sum, SACI has not convinced us that the bankruptcy court
13   abused its discretion by basing its decision on an erroneous
14   view of the law.   Accordingly, we discern no error with the
15   bankruptcy court’s exercise of restraint and discretion not to
16   impose sanctions in the amount of the missing rents under the
17   facts and circumstances of this case.
18                              VI.   CONCLUSION
19        For the reasons stated, we VACATE the sanctions orders and
20   REMAND on the amount of the sanctions based on SACI’s attorneys’
21   fees so that the bankruptcy court can show its work.   We AFFIRM
22   the denial of SACI’s request for sanctions in the amount of the
23   missing rents as within the bankruptcy court’s broad discretion.
24
25
26
27
28

                                      -31-
