In re Atlas Red-D Mix, Inc.

(Bankr. S.D. Ind. Nov. 10, 2015)

The bankruptcy court dismisses the chapter 7 business debtor’s bankruptcy for cause under 11 U.S.C. § 707(a). The debtor had ceased operations a few years prior to the bankruptcy, due to the death of its principal. The individual that inherited the stock then caused the debtor to withdraw from a pension fund to which the debtor was a contributing employer, which caused the debtor to incur a $3.5 million liability. The fund obtained a judgment against the debtor, took steps to collect on the judgment, and the debtor then filed a chapter 7 petition. The court finds that the case should be dismissed for cause because the debtor filed the bankruptcy in bad faith. The court finds that factors supporting a dismissal for bad faith include that the debtor had transferred four parcels of real property after the fund sued the debtor, the bankruptcy was essentially a two-party dispute, and there was no real purpose for the bankruptcy because the corporate debtor would not receive a discharge. Opinion below.

2015-11-10 – in re atlas red-d mix

Author: Matt Lindblom

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