The U.S. Bankruptcy Court denied the motion of the U.S. Trustee assigned to the Triad Guaranty case for an order converting the Chapter 11 reorganization to a liquidation under Chapter 7.
The denial order states, “By July 31, 2017, the Debtor shall file its disclosure statement and solicitation procedures motion. A hearing on approval of the disclosure statement shall be held no later than September 30, 2017, or at such time as this Court may direct. A hearing on confirmation of the plan shall be held no later than October 31, 2017 or at such time as this Court may direct.”
The Trustee previously argued, “The Debtor has not filed a plan and disclosure statement, despite having been in bankruptcy for approximately four years. In June 2016, the District Court issued an opinion affirming this Court’s ruling in the adversary proceeding that was commenced by the Debtor in order to obtain a ruling with respect to its rights to shared net operating losses. The monthly operating reports do not show significant activity, and it appears that the case may be administratively insolvent. As a result, there appears to be substantial or continuing loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation, which constitutes cause for conversion or dismissal under 11 U.S.C. section 1112 (b)(4)(A).”
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