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In re Frank Martin Paris, Jr.

23 B 16481
Chapter 7 debtor sought conversion under 11 U.S.C. § 706(d) to subchapter V of chapter 11.  The case trustee and the Debtor’s ex-wife opposed the request on the grounds that Debtor was not eligible to be a debtor under chapter 11.  HELD: The Supreme Court explained in Marrama v. Citizens Bank of Massachusetts, 549 U.S. 365 (2007), that the right to convert under § 706 is limited.  Bankruptcy judges may deny a motion to convert if the case would simply be reconverted.  Since a state court judge found that Debtor failed to pay a number of postpetition domestic support obligations, cause would exist to convert if this was a chapter 11 case.  Debtor argued that although he had not paid maintenance and support from his own income, his ex-wife and children had received payment of those obligations from a trust.  The state court judge had already rejected that argument.  Under the Bankruptcy Code, the plain language of § 1112(b)(4)(P) does not ask whether the ex-spouse is out of pocket but whether a debtor failed to pay the domestic support obligation.  Debtor presented no evidence to find otherwise and in fact admitted that he had not made the payments.  Therefore, any chapter 11 case would be reconverted for cause, and conversion to chapter 11 would be futile.  The court denied the motion to convert.

Monday, June 17, 2024