In re: Brennon Ty Bishop and Michelle Bishop

FILED
AUG 23 2017
1 NOT FOR PUBLICATION
2 SUSAN M. SPRAUL, CLERK
U.S. BKCY. APP. PANEL
OF THE NINTH CIRCUIT
3 UNITED STATES BANKRUPTCY APPELLATE PANEL
4 OF THE NINTH CIRCUIT
5 In re: ) BAP Nos. CC-16-1341-TaKuL
) CC-16-1342-TaKuL
6 BRENNON TY BISHOP and ) (related)
MICHELLE BISHOP, )
7 ) Bk. No. 2:12-bk-1600-RK
Debtors. )
8 ______________________________) Adv. No. 2:12-ap-01302-RK
)
9 FEDCHEX, LLC; FEDCHEX )
RECOVERY, LLC; ED ARNOLD; )
10 RODNEY DAVIS, )
)
11 Appellants, )
)
12 v. ) MEMORANDUM*
)
13 ELECTRONIC FUNDS SOLUTIONS, )
LLC, )
14 )
Appellee. )
15 ______________________________)
16 Argued and Submitted on June 22, 2017
at Pasadena, California
17
Filed – August 23, 2017
18
Appeal from the United States Bankruptcy Court
19 for the Central District of California
20 Honorable Robert N. Kwan, Bankruptcy Judge, Presiding
21
Appearances: Louis H. Altman of Haberbush & Associates LLP
22 argued for appellants.
23
Before: TAYLOR, KURTZ, and LAFFERTY, Bankruptcy Judges.
24
25
26 *
This disposition is not appropriate for publication.
27 Although it may be cited for whatever persuasive value it may
have (see Fed. R. App. P. 32.1), it has no precedential value.
28 See 9th Cir. BAP Rule 8024-1(c)(2).
 1 INTRODUCTION
2 Thirteen years after litigation commenced and following a
3 thirteen day trial, the bankruptcy court entered judgment
4 largely in favor of defendant-appellants FedChex, LLC, FedChex
5 Recovery, LLC, Ed Arnold, and Rodney Davis. Appellants escaped
6 liability on claims based on alleged fraudulent or preferential
7 transfers. But the bankruptcy court also determined that they
8 received unauthorized postpetition transfers of estate property;
9 it thus concluded that the plaintiff could recover the
10 transferred property.
11 On appeal, Appellants contend that the bankruptcy court
12 erred in three respects: first, by awarding plaintiff the
13 transferred property; second, by excluding the testimony from an
14 individual they characterize as their rebuttal expert witness;
15 and third, by not entering judgment in favor of Mr. Arnold and
16 Mr. Davis on all theories.
17 We disagree. Appellants provide an incomplete record on
18 appeal, sometimes misstate the record they do provide, concede
19 the bankruptcy court’s factual findings, and fail to challenge
20 the bankruptcy court’s legal conclusions adequately.
21 We AFFIRM.
22 FACTS
23 Near the beginning of its 92-page memorandum decision, the
24 bankruptcy court noted the complex and convoluted facts of this
25 case. Appellants, however, concede that the facts, for purposes
26 of these appeals, are undisputed and are as set forth by the
27 bankruptcy court. We take them at their word.
28 In early 2000, Brennon Ty Bishop (“Debtor”) and two

2
 1 business acquaintances, Michael Murphy and Michael Barry, formed
2 Electronic Funds Solutions, LLC (“EFS”). EFS was in the
3 business of assisting merchants with electronic funds
4 processing, including electronic collection of bounced checks.
5 In late 2000 and early 2001, Debtor and Mr. Murphy formed a
6 new company (“EPT”) and disassociated from Mr. Barry. Shortly
7 thereafter, Debtor and Mr. Murphy went into business with
8 Mr. Davis and Mr. Arnold (two of the Appellants) and formed two
9 LLCs: FedChex and FedChex Recovery. Mr. Barry eventually sued
10 Debtor, Mr. Murphy, and EPT.
11 On November 19, 2002, Debtor and his wife, Michelle Bishop,
12 filed a chapter 71 bankruptcy petition.2
13 Debtor’s bankruptcy filing was a dissolution event under
14 the FedChex and FedChex Recovery operating agreements.3 Thus,
15 the other LLC members held an emergency meeting and agreed to
16 terminate Debtor’s membership interests pursuant to Section 8.1
17
18
1
Unless otherwise indicated, all chapter and section
19 references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1532.
20 All “Rule” references are to the Federal Rules of Bankruptcy
Procedure. All “Civil Rule” references are to the Federal Rules
21 of Civil Procedure.
22 2
We exercise our discretion to take judicial notice of
documents electronically filed in the adversary proceeding and
23
in the underlying bankruptcy case. See Atwood v. Chase
24 Manhattan Mortg. Co. (In re Atwood), 293 B.R. 227, 233 n.9 (9th
Cir. BAP 2003).
25
3
Appellants filed a motion to supplement the record and
26 to transmit documentary exhibits. BAP Dkt. No. 10. Most of the
27 documents attached to the motion were already included in
Appellants’ excerpts of record. That said, to the extent
28 necessary, we grant the motion.

3
 1 of the operating agreements for the LLCs. But they did not take
2 immediate steps in this regard; Debtor’s membership interests
3 continued to be reflected in FedChex and FedChex Recovery
4 documents until December 4, 2002 when Debtor sold his remaining
5 interests for $64,000. In this transaction, Debtor waived his
6 right to an appraisal of his membership interest, completed the
7 sale without approval from either the trustee or the bankruptcy
8 court, and received a promissory note. Debtor never received
9 payment on that note.
10 In 2003, the bankruptcy court granted stay relief to
11 Mr. Barry and EFS to continue their suit against Debtor,
12 Mr. Murphy, and EPT. They eventually obtained a default
13 judgment of more than $30 million.
14 Also in 2003, Debtor’s chapter 7 trustee commenced the
15 present adversary proceeding against a variety of parties.
16 Thereafter, the bankruptcy court entered an order approving the
17 trustee’s sale and assignment of substantially all estate assets
18 to EFS. Accordingly, EFS became plaintiff in the adversary
19 proceeding as the trustee’s successor-in-interest; the
20 bankruptcy estate, however, retained a contingent interest in a
21 portion of the recovery.
22 And the adversary proceeding slowly lumbered along. The
23 fourth amended complaint, the operative one, alleged seven
24 claims for relief. As relevant here, the third claim for relief
25 sought avoidance of unauthorized post-petition transfers under
26 § 549 while the fourth sought recovery of avoided transfers
27 under § 550.
28 Eventually the bankruptcy court found that Plaintiff

4
 1 established a viable claim under § 549 for the unauthorized
2 postpetition transfers of Debtor’s 9.12% ownership interest in
3 FedChex for $62,000 and his 2.64% ownership interest in FedChex
4 Recovery for $2,000.
5 Having determined that Plaintiff had established a § 549
6 claim, and thus that the transfers were avoidable and
7 recoverable, the bankruptcy court turned to selection of a
8 remedy under § 550. After reciting the relevant law and
9 caselaw, it found that “there was little evidence in the record
10 as to the market value of FedChex and FedChex Recovery in 2002.”
11 December 8, 2014 Tentative Amended Memorandum Decision on
12 Plaintiff’s Fourth Amended Complaint to Avoid and Recover
13 Intentional and Constructive Fraudulent Transfers and Post-
14 Petition Transfers (“Mem. Dec.”) at 90. It noted that Davis
15 stated, in a deposition, that he did not know the values. And,
16 particularly relevant here, the bankruptcy court explained:
17 Defendants offered the testimony of Michael Issa, in
which Issa offered his opinion on the value of FedChex
18 and FedChex Recovery, but these values were first
offered as of October 13, 2004 (valuing FedChex at
19 $1,100,000 to $1,300,000, and valuing FedChex Recovery
at $500,000 to $1,000,000). These values are not
20 helpful for the Plaintiff’s fourth claim for relief
because the court should consider the value at the
21 time of the transfer.
22 Id. (citation omitted).
23 The bankruptcy court determined that it would award
24 Plaintiff the property, rather than its value; “[t]hus,
25 Plaintiff shall recover for the benefit of the estate [Debtor]’s
26 9.12% interest in FedChex and [Debtor]’s 2.64% interest in
27 FedChex Recovery.” Id.
28 The bankruptcy court later entered an order adopting the

5
 1 analysis in the memorandum decision as its final ruling. It
2 clarified:
3 To the extent that the court had not specified the
nature of Plaintiff’s interests in the various FedChex
4 entities as a result of the court’s partial ruling in
its favor on its avoidance claims, Plaintiff would
5 have an economic interest in those entities based on
its claims to recover debtor’s interest in those
6 entities unless Plaintiff can show that it should be
admitted as a Manager or Member of those entities
7 under the Operating Agreements or applicable state
law, which it has not shown.
8
9 September 29, 2016 Order Adopting [the Mem. Dec.] as Final
10 Ruling at 3.
11 The bankruptcy court also entered a separate judgment.
12 Appellants timely appealed.
13 JURISDICTION
14 The bankruptcy court had jurisdiction under 28 U.S.C.
15 §§ 1334 and 157(b)(2). We have jurisdiction under 28 U.S.C.
16 § 158.
17 ISSUES
18 Whether the bankruptcy court erred in excluding a rebuttal
19 expert witness.
20 Whether the bankruptcy court abused its discretion by
21 awarding Plaintiff the LLC interests rather than their value.
22 Whether the bankruptcy court erred by not entering judgment
23 in favor of Mr. Arnold and Mr. Davis.
24 STANDARDS OF REVIEW
25 We review the bankruptcy court’s “evidentiary decisions for
26 abuse of discretion, and ‘the appellant is . . . required to
27 establish that the error was prejudicial.’ ” Allstate Ins. Co.
28 v. Herron, 634 F.3d 1101, 1110 (9th Cir. 2011) (quoting

6
 1 Tritchler v. Cty. of Lake, 358 F.3d 1150, 1155 (9th Cir. 2004));
2 see also Valdivia v. Schwarzenegger, 599 F.3d 984, 988 (9th Cir.
3 2010).
4 We review the bankruptcy court’s choice of remedies, which
5 includes choices under § 550, for an abuse of discretion. USAA
6 Fed. Sav. Bank v. Thacker (In re Taylor), 599 F.3d 880, 890 (9th
7 Cir. 2010).
8 We apply a two-step test to determine whether the
9 bankruptcy court abused its discretion. First, we “determine de
10 novo whether the bankruptcy court identified the correct legal
11 rule to apply to the relief requested.” Id. at 887 (quotation
12 marks and alterations omitted). If the bankruptcy court
13 identified the correct legal rule, “we then determine whether
14 its application of the correct legal standard to the facts was
15 (1) illogical, (2) implausible, or (3) without support in
16 inferences that may be drawn from the facts in the record.” Id.
17 (quotation marks and alterations omitted).
18 DISCUSSION
19 On appeal, Appellants’ brief lists fifteen issues for
20 appeal, but acknowledges that “[m]any of these issues overlap
21 and for purposes of this Brief, they have been analyzed as three
22 issues.” Br. at 7. We consider on appeal only the issues they
23 actually argue. Pierce v. Multnomah Cty., Or., 76 F.3d 1032,
24 1037 n.3 (9th Cir. 1996); Leer v. Murphy, 844 F.2d 628, 634 (9th
25 Cir. 1988) (“Issues raised in a brief which are not supported by
26 argument are deemed abandoned.”); cf. Fed. R. App. P. 28(a)(8).
27
28

7
 1 A. We treat the facts as undisputed for purposes of this
appeal.
2
3 As already noted, we hold Appellants to a concession in
4 their opening brief: “The facts underlying the Appeals are
5 undisputed for purposes of these Appeals, and all of the issues
6 in the Appeals involve solely legal questions . . . .” Br.
7 at 4.
8 But we acknowledge that Appellants’ brief creates some
9 tension in connection with this conclusion. The brief is
10 littered with suggestions that the bankruptcy court “clearly
11 erred” in making a particular finding; in doing so, Appellants
12 refer generally to the entirety of the testimony at trial and
13 the record. We resolve that tension in favor of their
14 concession for two reasons.
15 First, the statements noting alleged error are followed by
16 an acknowledgment that the alleged error was either harmless or
17 immaterial.
18 Second, in their excerpts of record, Appellants provide
19 only partial transcripts from three days of the thirteen-day
20 trial. This is insufficient to challenge the bankruptcy court’s
21 factual findings. Kritt v. Kritt (In re Kritt), 190 B.R. 382,
22 387 (9th Cir. BAP 1995) (“The appellants bear the responsibility
23 to file an adequate record, and the burden of showing that the
24 bankruptcy court’s findings of fact are clearly erroneous.
25 Appellants should know that an attempt to reverse the trial
26 court’s findings of fact will require [that] the entire record
27 relied upon by the trial court be supplied for review.”
28 (internal quotation marks and citations omitted)). And the fact

8
 1 that the bankruptcy court docket contains complete transcripts
2 is of no aid to Appellants where they dispute the bankruptcy
3 court’s factual conclusions; we are not “obliged to search the
4 entire record, unaided, for error[,]” Tevis v. Wilke, Fleury,
5 Gould & Birney, LLP (In re Tevis), 347 B.R. 679, 686 (9th Cir.
6 BAP 2006), and we certainly are not required to scour the many
7 transcripts outside the record for testimony supporting the
8 Appellants’ view of the facts.
9 Accordingly, we rely on the facts as the bankruptcy court
10 determined them.
11 B. The bankruptcy court did not abuse its discretion in
excluding Mr. Issa’s testimony.
12
13 On appeal, Appellants argue that the bankruptcy court erred
14 “in excluding the rebuttal testimony of Mr. Issa such that this
15 court should remand to the bankruptcy court to consider
16 Mr. Issa’s testimony to determine the amount to award to EFS.”
17 Br. at 28 (capitalization removed). We disagree.
18 Mr. Issa submitted two declarations as his proposed
19 testimony at trial. In one declaration, described as his direct
20 testimony, Mr. Issa opined about the LLCs’ value in 2004 (the
21 “First Issa Declaration”). In a second declaration, described
22 as rebuttal testimony, Mr. Issa opined about the LLC’s value on
23 the petition date (the “Second Issa Declaration”). The
24 bankruptcy court excluded both declarations at different points
25 in time and for different reasons.
26 In their brief, Appellants conflate these decisions and the
27 two declarations. But when the record is sorted out, it is
28 clear that the bankruptcy court did not err in excluding all of

9
 1 this testimony.
2 The bankruptcy court did not err in excluding Mr. Issa’s
3 declaratory testimony as untimely. The bankruptcy court
4 established a date in June of 2009 for submission of testimony
5 through declarations. The Appellants neither argue that the
6 bankruptcy court established a second date for rebuttal
7 testimony nor do they provide us with the relevant transcript in
8 the record. In fact, they concede that both Issa declarations
9 were filed well after the deadline.
10 Appellants filed the First Issa Declaration in October of
11 2009. In April 2010, during the trial, the bankruptcy court
12 excluded the First Issa Declaration as untimely. Appellants
13 filed the Second Issa Declaration almost a year late on May 5,
14 2010, during the middle of the trial. The Court was well within
15 its rights in determining that the Issa Declarations should not
16 be considered as they were untimely and thereby enforcing the
17 requirements of its pretrial procedures. See Lee-Benner v.
18 Gergely (In re Gergely), 110 F.3d 1448, 1452 (9th Cir. 1997).
19 We may affirm summarily as the Appellants failed to provide
20 us with an adequate record on appeal. Appellants primarily
21 complain that the bankruptcy court failed to appropriately
22 consider the Second Issa Declaration. They failed to provide a
23 record that would allow us to adequately consider this issue on
24 appeal.
25 First, they fail to include the Second Issa Declaration in
26 the record. Appellants thus did not provide us with the
27 evidence that is the foundation for their claim of error.
28 Second, as already noted, they failed to provide us with

10
 1 all relevant transcripts.
2 Most importantly, in connection with exclusion of the
3 Second Issa Declaration, the bankruptcy court’s order after
4 hearing incorporated its oral ruling by reference; in its oral
5 ruling, which we can review, the bankruptcy court affirmatively
6 adopted a prior tentative ruling. Appellants, however, did not
7 provide the tentative ruling in the record, and we cannot locate
8 it on the bankruptcy court docket. Accordingly, we cannot
9 adequately review the bankruptcy court’s decision. Welther v.
10 Donell (In re Oakmore Ranch Mgmt.), 337 B.R. 222, 226 (9th Cir.
11 BAP 2006) (“If a tentative decision is necessary to
12 understanding the court’s ruling, it must be included in the
13 designation and the excerpts of the record.”); Gertsch v.
14 Johnson & Johnson Fin. Corp. (In re Gertsch), 237 B.R. 160, 169
15 (9th Cir. BAP 1999); see Ehrenberg v. Cal. State Univ.,
16 Fullerton Found. (In re Beachport Entm’t), 396 F.3d 1083, 1087-
17 88 (9th Cir. 2005); Morrissey v. Stuteville (In re Morrissey),
18 349 F.3d 1187, 1189 (9th Cir. 2003) (failing to provide a
19 critical document may result in summary affirmance).
20 Appellants must demonstrate prejudice from the exclusion of
21 the Issa testimony, but they fail to do so. To reverse the
22 bankruptcy court on the basis of an erroneous evidentiary
23 ruling, we must conclude that the error was prejudicial.
24 Allstate Inc. Co., 634 F.3d at 1110. The record we have does
25 not support an assertion of prejudice.
26 Appellants argue that the Issa Declarations would allow the
27 bankruptcy court to value the LLC interests and to award
28 monetary damages instead of a return of the transferred LLC

11
 1 interests themselves. We question this assertion and for
2 various reasons conclude that exclusion of the Issa testimony
3 did not prejudice the Appellants.
4 As to the First Issa Declaration, the bankruptcy court
5 noted that it was not helpful; among other things, it valued the
6 LLC interests well after the transfer date. For that reason, it
7 was irrelevant to the bankruptcy court’s valuation
8 determinations as of the transfer date. The Appellants’
9 arguments are confusing, but they implicitly acknowledge this
10 fact; despite sweeping language, their focus is on the Second
11 Issa Declaration.
12 At the hearing, shortly after the bankruptcy court stated
13 that it was excluding the First Issa Declaration, Appellants’
14 counsel asked about Mr. Issa’s rebuttal testimony. The
15 bankruptcy court allowed a later offer of proof regarding
16 rebuttal testimony and stated that it would rule on it later.
17 Appellants subsequently filed a motion and the offer of
18 proof; the matter was fully briefed and set for hearing. At the
19 hearing, the bankruptcy court stated that it read the late-filed
20 Second Issa Declaration but found that it would not be helpful
21 because:
22 • “It’s really disguised argument”;
23 • “It’s just taking whatever the witness testified at trial
24 and is just offering rebutting arguments”;
25 • “I don’t see how there’s any expertise that Mr. Issa is
26 providing”; and
27 • “he’s just giving commentary on the testimony and he’s not
28 a fact witness.”

12
 1 AP Dkt. No. 716, Hr’g Tr (June 2, 2010) 4:25-5:5. The
2 bankruptcy court, in short, concluded: “[S]o I would hold that
3 . . . Mr. Issa’s testimony would not be helpful to the Court.
4 It would not assist the trier of fact, and it was filed
5 untimely.” Id. at 5:24-6:2. The bankruptcy court thus decided
6 to “adopt its tentative ruling as its order”. Id. at 6:9-13.
7 Appellants argue as if submission of Mr. Issa’s Rebuttal
8 Testimony would have been a fait accompli: the bankruptcy court
9 would have found his testimony credible and helpful and would
10 have adopted it. This notion is fanciful; the bankruptcy court
11 did review the Second Issa Declaration and for a variety of
12 reasons found it neither helpful nor compelling. Appellants do
13 not dispute this point; thus, they fail to demonstrate any
14 prejudice in relation to the Second Issa Declaration, and the
15 bankruptcy court did not abuse its discretion in excluding it.
16 The Second Issa Declaration was not true rebuttal
17 testimony. The purpose of rebuttal testimony “is to explain,
18 repel, counteract[,] or disprove evidence of the adverse party.”
19 Marmo v. Tyson Fresh Meats, Inc., 457 F.3d 748, 759 (8th Cir.
20 2006) (internal quotation marks omitted) (citing cases). To the
21 extent labels matter here, we agree with the implicit
22 determination of the bankruptcy court: the Second Issa
23 Declaration does not appear to be true rebuttal testimony.
24 Thus, it was properly excluded because “[i]t is well settled
25 that evidence which properly belongs in the case-in-chief but is
26 first introduced in rebuttal may be rejected . . . .” Emerick
27 v. U.S. Suzuki Motor Corp., 750 F.2d 19,22 (3d Cir. 1984).
28 On appeal, Appellants argue that Mr. Issa provided proper

13
 1 rebuttal testimony on one central point: the LLCs’ value.4 And,
2 the Second Issa Declaration discussed, in part, the value of the
3 LLCs on the petition date; he opined that they were worth
4 nothing.
5 But Appellants miss the point. Plaintiff did not need to
6 establish the LLCs’ value on the transfer date to prevail on its
7 § 549 and § 550 claims for relief. Thus, it was incumbent on
8 Appellants to present evidence of value if they wanted to argue
9 that Plaintiff should only recover the monetary value of the
10 transferred property. They did not do so in their case in
11 chief; having failed to do so, they cannot properly remedy the
12 defect through rebuttal.5
13
14 4
Appellants raise a second, irrelevant point: “Mr. Issa
15 was a relevant rebuttal or impeachment witness as to issues or
claims. . . that either the ownership interest of Mr. Davis was
16 misstated . . . or that Mr. Davis did not contribute everything
noted on Exhibits 140-145.” Br. at 32. This testimony was
17 relevant to the fraudulent transfer claims, not the § 549 and
18 § 550 claims involved in this appeal.
5
19 We also note reluctantly that Appellants seriously
misstate the record in connection with this point. Appellants
20 argue:
21 When the bankruptcy court issued its order sustaining
Plaintiff’s Objection to the Trial Declaration of
22 Michael Issa, and ordering the preclusion of any
evidence from Mr. Issa, . . . . no trial date had been
23 set, and there was no prejudice at all for Plaintiff
24 to take the offer made by Defendants’ counsel in
October of 2008 to depose the expert[] . . . . There
25 was no issue of delaying a trial, requesting a
continuance, forcing a continuance, or any other
26 prejudice. The real issue was Plaintiff’s attempt to
27 achieve an overwhelming strategic advantage by using a
clever tactic. That advantage was not warranted.
28 (continued...)

14
 1 And despite Appellants’ convoluted and conflated arguments,
2 they appear to have waived any argument in relation to the
3 Second Issa Declaration. The bankruptcy court decided not to
4 accept the Second Issa Declaration into evidence at the June 2,
5 2010 hearing; Appellants completely fail to discuss this hearing
6 or to address the bankruptcy court’s analysis. True, they
7 discuss the April 28, 2010 order; but they never explain how or
8 argue that the June 2, 2010 decision was wrong. They thus
9 waived any argument on the point, and we can affirm on that
10 ground. See Padgett v. Wright, 587 F.3d 983, 986 n.2 (9th Cir.
11 2009) (per curiam) (appellate courts “will not ordinarily
12 consider matters on appeal that are not specifically and
13 distinctly raised and argued in appellant’s opening brief”).
14 Accordingly, we find no merit to Appellants’ argument that
15 the bankruptcy court erred in its April 28, 2010 order by
16 excluding the rebuttal testimony of Mr. Issa; it did no such
17 thing. Because Appellants do not argue that the June 2, 2010
18 order was in error, we affirm.
19
20 5
(...continued)
21 Br. at 34-35. At best, this is misleading.
First, Appellants’ record citation is to an April 28, 2010
22 order entered after the ninth day of a thirteen day trial.
Their analysis is thus inapt.
23 Second, the next day of trial had already been set for
24 May 6, 2010. Again, their argument is wrong.
Third, the bankruptcy court sustained the timeliness
25 objection to the First Issa Declaration; it did not bar
Mr. Issa’s testimony for other reasons. More directly, the
26 bankruptcy court did not exclude the Second Issa Declaration on
27 that date.
In sum, the April 28, 2010 order was in the middle of trial
28 and did not preclude Mr. Issa from testifying in rebuttal.

15
 1 C. The bankruptcy court did not abuse its discretion in
awarding Plaintiff the property transferred instead of the
2 value of the property.
3 In this appeal, no one directly questions the bankruptcy
4 court’s determination that there was a § 549 unauthorized
5 postpetition transfer of estate property. We now turn to the
6 remedy.
7 Section 550(a) provides that “to the extent that a transfer
8 is avoided under section . . . 549 . . ., the trustee may
9 recover, for the benefit of the estate, the property
10 transferred, or, if the court orders, the value of such property
11 . . . .” 11 U.S.C. § 550(a). As the bankruptcy court observed,
12 the Code “does not provide guidelines by which the court is to
13 determine whether the Plaintiff recovers the property itself
14 . . . or the monetary value of those interests.” Mem. Dec. at
15 89. Section 550’s purpose “is to restore the estate to the
16 financial condition it would have enjoyed if the transfer had
17 not occurred.” Decker v. Tramiel (In re JTS Corp.), 617 F.3d
18 1102, 1111 (9th Cir. 2010) (quotation marks omitted) (citing
19 Acequia Inc. v. Clinton (In re Acequia, Inc.), 34 F.3d 800, 812
20 (9th Cir. 1994)); Aalfs v. Wirum (In re Straightline Invs.,
21 Inc.), 525 F.3d 870, 883 (9th Cir. 2008). “The primary goal is
22 equity and restoration, i.e., putting the estate back where it
23 would have been but for the transfer.” In re JTS Corp.,
24 617 F.3d at 1111 (quotation marks omitted) (quoting 5 Collier on
25 Bankruptcy § 550.02[3][a] at 550-10 (Alan N. Resnick & Henry J.
26 Sommer 16th Ed.)) (also citing other sources).
27 Thus, here, the question is whether the bankruptcy court
28 abused its discretion when it decided to award the transferred

16
 1 property itself, instead of the value of the property
2 transferred. Cf. In re Taylor, 599 F.3d at 890 (considering
3 opposite situation).
4 “It is well established that in deciding to award an estate
5 the value of property, a bankruptcy court must decide whether
6 there is conflicting evidence as to the value of the property
7 and whether the value of the property is readily determinable.”
8 Id. at 892 (internal quotation marks and citation omitted). But
9 “[w]here the value of the property cannot be easily or readily
10 determined — as is the case here — the correct remedy is to
11 return the property, not award an estimate of the value of the
12 property.” Id. at 892.
13 On appeal, Appellants correctly state that nonbankruptcy
14 law defines the scope of the bankruptcy estate’s property
15 interests. They then try to frame the remedy issue in that
16 light: the bankruptcy estate (i.e., Plaintiff) was entitled to
17 only what Debtor was entitled to and no more. Because Debtor’s
18 interest was defined by the LLCs’ operating agreements,
19 Appellants argue that the bankruptcy court erred when it did not
20 enforce those operating agreements:
21 • When a member withdraws, the LLCs need only pay the
22 withdrawing member the balance in that member’s capital
23 account. That is the withdrawing member’s only remedy.
24 • Debtor’s bankruptcy filing was a dissolution event for both
25 LLCs. Accordingly, the LLC members met. They agreed to
26 continue business. And they agreed to purchase Debtor’s
27 remaining interests in the LLCs.
28 • Debtor’s capital accounts contained a combined $50,000

17
 1 balance. As a result, Debtor, and thus the bankruptcy
2 estate, was entitled to only $50,000.
3 • By awarding Plaintiff the Debtor’s economic interest in the
4 LLCs, instead of $50,000, the bankruptcy court erred.
5 This is perplexing.6 Appellants never directly engage with
6 the bankruptcy court’s legal conclusion; they approach it only
7 by various traverses. What’s more, put slightly differently,
8 Appellants argue that state law limited the bankruptcy court’s
9 choice of remedy on a bankruptcy claim for relief.
10 First, Appellants’ attempt to retreat to state law must
11 fail; the Code is not silent on the point.7 It speaks directly
12 to unauthorized postpetition transfers of estate property; they
13 are avoidable. 11 U.S.C. § 549. When they are avoidable, the
14 trustee may recover the property itself or, if the court so
15 orders, the value of that property. 11 U.S.C. § 550.
16 Accordingly, we are in the bankruptcy law world.
17 Second, Appellants fail to explain why an award of the LLC
18 interests expands rights under the LLCs. If the Debtor’s rights
19
20 6
Our review of the adversary docket shows that Appellants
21 raised a similar argument early in the case. AP Dkt. No. 156 at
2 (“By the Motion Movants seek an order limiting judgment on the
22 avoidance claims to an award of the value of the property
interests rather than for the recovery of actual property
23
interests.”). It was opposed. The bankruptcy court denied the
24 motion. AP Dkt. No. 184. Again, Appellants do not refer to
this motion or the bankruptcy court’s order.
25
7
Appellants quote Mortgage Guaranty Insurance Corporation
26 v. Pascucci (In re Pascucci): “Where the Bankruptcy Code is
27 silent, and no uniform bankruptcy rule is required, the rights
of the parties are governed by the underlying non-bankruptcy
28 law.” 90 B.R. 438, 442 (Bankr. C.D. Cal. 1988).

18
 1 were limited as they discuss, it is unclear how the rights of
2 the estate or its transferee would be expanded as a result of a
3 § 550 recovery of the economic value of the interest.
4 Finally, they fail to explain how the award of the LLC
5 interests constituted error given the facts of the case and the
6 latitude allowed by the Code. The bankruptcy court had two
7 possible remedies after determining that unauthorized post-
8 petition transfers existed. Because there was little evidence
9 in the record about the market value of FedChex and FedChex
10 Recovery on the relevant date, the bankruptcy court awarded the
11 property itself, not its value. This was appropriate given the
12 questions as to value, but it would also have been appropriate
13 even if value were more clear. In re Taylor, 599 F.3d at 892.
14 Cf. Trout v. Drive Fin. Servs. (In re Trout), 609 F.3d 1106,
15 1113 (10th Cir. 2010) (“Moreover, as other courts have also
16 recognized, the language of § 550(a) suggests that the default
17 rule is the return of the property itself, whereas a monetary
18 recovery is a more unusual remedy to be used only in the court’s
19 discretion.”).
20 In any event, having concluded that Appellants have not
21 shown any error in the bankruptcy court’s exclusion of
22 Mr. Issa’s testimony, we also conclude that the bankruptcy court
23 did not clearly err in determining that there was little
24 evidence in the record about the LLCs’ value on the petition
25 date. Appellants point to no other evidence of value.
26 Accordingly, the bankruptcy court did not misapply the correct
27 legal standard or otherwise abuse its discretion in this
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 1 respect.8
2 D. The bankruptcy court did not err by not entering judgment
in Mr. Davis and Mr. Arnold’s favor and indicating that
3 they were prevailing parties.
4 Last, Appellants argue that the bankruptcy court erred by
5 not entering judgment in favor of Mr. Arnold and Mr. Davis and
6 indicating that they were prevailing parties on all claims
7 brought against them. Appellants had submitted a judgment that
8 included that language; the bankruptcy court struck that
9 language when it entered the final judgement.
10 Appellants claim that the bankruptcy court only ordered
11 recovery against the LLCs and that no recovery was granted
12 against any individual defendant. They ask us to either amend
13 the judgment or remand so the bankruptcy court may make separate
14 findings of fact and conclusions of law about Mr. Davis and
15 Mr. Arnold. They state: “More importantly, no statements in the
16 Memorandum Decision even suggest the bankruptcy court believed
17 Mr. Arnold and Mr. Davis were liable to EFS for any of the
18 claims for relief.” Br. at 45.
19 We disagree. First, the bankruptcy court found that Debtor
20 “sold his remaining interests in FedChex and FedChex Recovery to
21
8
22 At oral argument, Appellants’ counsel suggested that
there were “regulatory” issues raised when the bankruptcy court
23 awarded the LLC interests and not their value. They, however,
24 did not raise this in their opening brief; it is also not clear
if they raised it below — in our review of the underlying docket
25 (admittedly not exhaustive), we have not seen a similar
argument. Both of these failures waive the argument. See
26 Padgett, 587 F.3d at 986 n.2; Samson v. W. Capital Partners, LLC
27 (In re Blixseth), 684 F.3d 865, 872 n.12 (9th Cir. 2012)
(appellate court may decline to address argument not raised
28 before bankruptcy court).

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 1 the remaining members of the LLCs.” Mem. Dec. at 21.
2 Mr. Arnold and Mr. Davis were two of the remaining members.
3 Second, and contrary to Appellants’ statement otherwise, the
4 bankruptcy court’s memorandum decision clearly finds Mr. Davis
5 and Mr. Arnold liable on the third and fourth claims for relief:
6 “As discussed in this memorandum decision, the following
7 transfers are avoided under 11 U.S.C. § 549 and recoverable
8 pursuant to 11 U.S.C. § 550, and are recoverable from Mr. Davis,
9 Mr. Arnold, FedChex, and FedChex Recovery . . . .” Id. at 89
10 (emphasis added).
11 Accordingly, we reject Appellants’ argument and decline to
12 amend the bankruptcy court’s judgment or remand for additional
13 findings.
14 CONCLUSION
15 Based on the foregoing, we AFFIRM.
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