Bradbury Bankruptcy Attorney

Bankruptcy | Case Law | Conversion

CONVERSION

In re Owens, 552 F.3d 960 (9th Cir. 2009)

Bankruptcy court properly dismissed rather than converting chapter 11 case that was filed

in bad faith as a litigation tactic. Although conversion might have benefitted moving party, the

best interests of all creditors must be considered in converting or dismissing a case. here,

creditors might have fared worse in chapter 7 because the chapter 7 discharge would have

deprived them of access to the debtor’s substantial future income.

In re Marrama, 549 U.S. 365, 127 S.Ct. 1105 (2007)

Debtor forfeited his right to convert his case to chapter 13 where he did not qualify as a

debtor because of his bad faith concealment of assets

In re Lynch, 363 B.R. 101 (9th Cir. BAP 2007)

Trustee should not have been compelled to abandon property. Even though the debtor

valued the property at 560,000 as of the date of the filing of the chapter 13 petition, and the plan

was confirmed without objection, that valuation was not binding on the trustee under § 348(f)(1),

since no implicit valuation occurred. However, the relevant valuation date was the petition date,

not the conversion date (absent a showing of bad faith.

In re Fowler, 394 F.3d 1208 (9th Cir. 2005)

“We hold that § 348(d) requires that postpetition employment tax debt, incurred as an

administrative expense of a Chapter 11 bankruptcy estate, retains its first priority administrative

expense status upon conversion to a Chapter 13 bankruptcy plan. Section 1305 is not in conflict

with this holding because it does not govern the priority of the postpetition claims it allows into

the bankruptcy.”

In re Captain Blythers, Inc., 311 B.R. 530 (9th Cir. B.A.P. 2004), aff’d, 182 Fed. Appx. 708

(2006).

Chapter 11 plan which dedicated the proceeds, if any, of a cause of action to payment of

creditors revested in the chapter 7 estate upon conversion.

In re Consolidated Pioneer Mortgage Entities, 264 F.3d 803 (9th Cir. 2001)

Conversion from chapter 11 to chapter 7 was warranted where corporation charge with

responsibility for liquidating bankruptcy estate caused unreasonable delay by failing to account to

investors. Bankruptcy court’s decision to convert will be reversed only if there is no evidence in

the record upon which to rationally support it.

In re Johnston, 149 B.R. 158 (9th Cir. B.A.P. 1992)

Conversion of case from 11 to 7 four months after filing held to be proper. Bankruptcy

court isn’t required to wait a certain time to detriment of creditors before pulling the plug.

In re Plata, 958 F.2d 918 (9th Cir. 1992)

Monies held from post-petition earning by Chapter 12 trustee go back to debtor.

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