The U.S. Trustee (UST) assigned to the Rooster Energy case filed with the U.S. Bankruptcy Court a motion to dismiss the case for cause pursuant to 11 U.S.C. Section 1112(b)(4).
The Trustee asserts, “Bankruptcy Code section 1112(b) provides that: [O]n request of a party in interest, and after notice and a hearing, the court shall convert a Case under this chapter to a case under chapter 7 or dismiss a case under this chapter, whichever is in the best interests of creditors and the estate, for cause unless the court determines that the appointment under section 1104(a) of a trustee or an examiner is in the best interests of creditors and the estate. There is ’cause’ mandating conversion to chapter 7 where there is, among other things, ‘substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation.’ The Motion to Convert argues that there is a ‘substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation.’ Bankruptcy Code section 1112(b) provides for alternative relief – dismissal or conversion.”
In addition, “In the cases before the Court, no facts have been presented which establish a reasonable likelihood that conversion and subsequent administration by a chapter 7 trustee would benefit the unsecured creditors. However, the administration will almost certainly be lengthy and expose the estate to liability. Wherefore, the UST prays for an order dismissing this case. He further prays for all general and equitable relief which may be just and proper under the circumstances.” The Trustee also filed with the Court a motion to expedite consideration of this dismissal motion. The Court approved that motion and scheduled a September 12, 2017 hearing.
Read more Rooster Energy bankruptcy news.