04 B 13843

The United States Trustee filed a motion to dismiss or convert a chapter 11 case arguing that the case was not filed in good faith, that the debtor had no real need for bankruptcy reorganization, that the debtor’s plan was both unconfirmable and unfeasible, and that the true creditor body (as opposed to shareholders) would not be well served by continued prosecution of a trade-secret-misappropriation action in state court. The court concluded that “cause” existed under 11 U.S.C. §§ 1112(b)(1) and (b)(2) to dismiss the case due to the highly speculative nature of the state court action which was the debtor’s primary asset. The court alternatively found that “cause” existed that the chapter 11 case was filed in bad faith.