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Bankruptcy | Case Law | Dismissal
DISMISSAL OF THE CASE– §§ 521(i), 707(a), 1112(b) and 1307(a)
In re Warren, 568 F.3d 1113 (9th Cir. 2009)
“. . .[T]he bankruptcy court has discretion, after the passing of the forty-five day filing
deadline set forth in § 521(i)(1), to “order otherwise” and thereby waive the § 521(a)(1) filing requirement.” In re Owens, 552 F.3d 960 (9th Cir. 2009) Bankruptcy court properly dismissed rather than converting chapter 11 case that was filed in bad faith as a litigation tactic. Although conversion might have benefitted moving party, the best interests of all creditors must be considered in converting or dismissing a case. Here, creditors might have fared worse in chapter 7 because the chapter 7 discharge would have deprived them of access to the debtor’s substantial future income. In re AVI, Inc., 389 B.R. 721, 724 (9th Cir. BAP 2008) Dismissal of chapter 11 case was properly set aside, where order approving a settlement did not include a provision for dismissal of the case upon the occurrence of certain events, and the case was subsequently dismissed without notice to creditors. Court properly set aside the dismissal under Rule 60(b). In re Hickman, 384 B.R. 832 (9th Cir. BAP 2008) Debtor’s counterclaims to a creditor’s claims in a non-dischargeability proceeding were not entitled to a jury trial in bankruptcy court, since they involved the restructuring of the debtor creditor relationship. Any jury trial right debtor may have had in another forum did not provide cause for dismissal of the bankruptcy case under § 707(a), where the debtor voluntarily submitted himself to the jurisdiction of the bankruptcy court and then failed to perform his statutory duties. Warren v. Wirum, 378 B.R. 640 (N.D. Cal. 2007) 1) Because credit counseling under § 109(h) is not jurisdictional, the debtor was judicially estopped from dismissing his case for failing to obtain it, citing In re Mendz, 367 B.R. 107 (9th Cir. BAP 2007); 2) unless the debtor asks to be excused from filing payment advices or the trustee moves the court to decline from dismissing, the case is automatically dismissed, and the court may not retroactively waive the debtor’s obligation to file payment advices. In re Mendez, 367 B.R. 109 (9th Cir. BAP 2007) Pre-bankruptcy credit counseling is not a jurisdictional prerequisite, but an eligibility requirement subject to waiver and estoppel. Debtor waived strict compliance with credit counseling requirements, and could not use noncompliance offensively to obtain dismissal of her bankruptcy case. In re Sewell, 345 B.R. 174, 182 (9th Cir. BAP 2006)“Debtors’ case was reinstated and the automatic stay was reimposed as of the time the
Reinstatement Order was docketed, not when it was signed. . . The bankruptcy court had discretion to determine when Debtors’ case was reinstated and the automatic stay was reimposed.” Foreclosure sale was allowed to stand, as it occurred between the time the case was dismissed and the reinstatement order was docketed. 161 In re Sherman, 491 F.3d 948 (9th Cir. 2007) Dismissal of chapter 7 for cause under § 707(a) is improper if the asserted “cause” is contemplated by another provision of the bankruptcy code, such as § 362. In re Tennant, 318 B.R. 860 (9th Cir. BAP 2004) Court has the power under § 105 to dismiss a chapter 13 case sua sponte for failure to file schedules. In re Bartee, 317 B.R. 362 (9th Cir. BAP 2004) A chapter 7 debtor does not have an absolute right to dismiss. The bankruptcy court did not abuse it’s discretion in denying the debtor’s motion, where the case had assets, the schedules were inaccurate and there was no basis for believing that creditors would be paid outside of bankruptcy . In re Padilla, 222 F.3d 1184 (9th Cir. 2000) 1. Bad faith “as a general proposition does not provide “cause” to dismiss a Chapter 7 petition under § 707(a). 2. Credit card “bust out” did not constitute cause under § 707(a). In re Elias, 215 B.R. 600 (9th Cir. B.A.P. 1997), aff’d, 188 F.3d 1160 (9th Cir. 1999) Effect of dismissal of case - 349(b) In re Leavitt, 171 F.3d 1219 (9th Cir. 1999) Bankruptcy debtor’s concealment and misuse of assets warranted dismissal of Chapter 13 case with prejudice In re Marsch, 36 F.3d 825 (9th Cir. 1994) Having found that case was filed in bad faith, court abused discretion in staying dismissal for 60 days. In re Eisen, 31 F.3d 1447 (9th Cir. 1994) 4 year delay in pursuing case justified alone dismissal. Court need not make findings as to each of 5 part test In re Leach, 130 B.R. 855 (9th Cir. B.A.P. 1991) Denial of dismissal appropriate where IRS would be prejudiced since dismissal would allow debtor to refile subsequently and discharge the obligations. Abuse of discretion standard In re Hall, 15 B.R. 913 (9th Cir. B.A.P. 1981) Trustee has standing to object to dismissal if creditors do not affirmatively consent. If they do, trustee may still object to recover fees. 162