03 B 46296

Plaintiff in a state court alter ego action against two principals (and a Judgment Creditor of the debtor) of a corporate chapter 7 debtor filed a motion to dismiss the debtor’s case or in the alternative, lift the automatic stay to permit the state court action to proceed. Noting that corporate chapter 7 cases have very limited purposes and that they do not demand the type of reorganizational analysis required in a chapter 11 or chapter 13 case, the court held that the debtor’s case was filed in “bad faith” and dismissed it for “cause.” The court concluded that the case served only to stay Plaintiff’s collection efforts, was an unfair litigation tactic designed to delay the Plaintiff’s state court alter-ego claim and that it was an attempt to shift the dispute, which could be resolved in state courts, to a bankruptcy forum.