23-81464
On competing motions by the chapter 11 debtor to convert his case to chapter 7 under Section 1112(a) and by a creditor and the U.S. Trustee seeking to dismiss the case under Section 1112(b), finding it more appropriate to first address the debtor’s motion given the strong presumptive right of the debtor to choose conversion. Finding that the debtor met his burden of showing that none of the statutory exceptions in section 1112(a) applied, rejecting the creditor’s contention that section 1112(a)(1)’s term “debtor in possession” means anything other than as defined in section 1101(1). Also finding that the objecting creditor and U.S. Trustee had failed to meet their burden of demonstrating that the case would necessarily be dismissed for cause under the standard set forth in Marrama or that the debtor was otherwise ineligible to be a chapter 7 debtor, noting that related issues of discharge and dischargeability may be adjudicated in the adversary proceeding still pending.
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Thursday, February 20, 2025