debtor's motion to dismiss chapter 11 case

Debtor's motion to dismiss chapter 11 case code#

Because chapter 11 cases can be prolonged and costly, prepackaged or prenegotiated plans and expedited asset sales under section 363(b) of the Bankruptcy Code have been increasingly used as methods to short-circuit the process, minimize expenses, and maximize creditor recoveries. In a typical chapter 11 case, a plan of reorganization or liquidation is proposed the plan is confirmed by the bankruptcy court the plan becomes effective and, after the plan has been substantially consummated and the case has been fully administered, the court enters a final decree closing the case. The BAP affirmed a bankruptcy court order granting a 'straight dismissal' of a chapter 11 case, finding that, notwithstanding the debtor's pledge on the record to pay some, but not all, unsecured creditors after dismissal of his bankruptcy case, the court's dismissal order complied with all applicable provisions of the Bankruptcy Code. However, because the Court declined to express any 'view about the legality of structured dismissals in general,' many open questions remain regarding the structured dismissal mechanism.Ī bankruptcy appellate panel for the Ninth Circuit ('BAP') recently addressed structured dismissals in In re Pourteymour, 2023 WL 2929323 (B.A.P.

Supreme Court held that the Bankruptcy Code does not allow bankruptcy courts to approve distributions to creditors in a 'structured dismissal' of a chapter 11 case that violate the Bankruptcy Code's ordinary priority rules without the consent of creditors.

Debtor's motion to dismiss chapter 11 case