23-11558 (WIWB); 23-11559 (WIWB); 23-11560 (WIWB)
After confirmation of a chapter 11 Plan of reorganization which merged the three named Debtors into the Reorganized Debtor, the U.S. Trustee filed a motion to dismiss the case based on the failure to file quarterly reports and pay quarterly fees after the Reorganized Debtor ceased operating. Creditor, KLC Financial Inc. (“KLC”), opposed dismissal and requested conversion to chapter 7 based on its speculation that there may be “potentially recoverable transfers” to Diversified Management Group, Inc. (“DMG”), the entity responsible for management of the Reorganized Debtor. KLC also sought authority to conduct a Rule 2004 examination of DMG, its principal, K. Michael Buck, and the Reorganized Debtor. The confirmed Plan vested all property and causes of action in the Reorganized Debtor and there was no showing of even the likelihood that assets would be available for a chapter 7 trustee to administer upon conversion. Accordingly, KLC’s objection was overruled, its 2004 motion was denied, and the U.S. Trustee’s motion to dismiss was granted.