Lucky Dragon Hotel & Casino – Snow Covered Capital Objects to Conversion of Insolvent Estates as Unduly Burdensome for Chapter 7 Trustees

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November 16, 2018 – Snow Covered Capital filed an objection [Docket No. 999] to the motion of the Debtors’ Official Committee of Unsecured Creditors to convert the Chapter 11 cases to a cases under Chapter 7 [Docket No. 964]. Snow Covered Capital asserts, “In the Motion to Convert, the UCC proposes to place enormous responsibilities on two Chapter 7 trustees (one for each estate) to investigate and prosecute numerous claims, causes of action, objections and defenses. But post-conversion, the Chapter 7 trustees will each inherit administratively insolvent estates that have no funds to even retain counsel, let alone conduct thorough investigations and prosecute litigation, litigation which is, at least as to SCC, quixotic at best. SCC contends that it would be fundamentally unfair to impose the burden of the administration of the LP bankruptcy case on a Chapter 7 trustee under these circumstances. 

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