12.10.2015 | Articles / Publications
Norton Bankruptcy Law Adviser Newsletter: Bad News, Will Travel Fast: Third Circuit Imposes “Good Faith” Condition on Involuntary Bankruptcy Petitioners
Birmingham-based Partner, James H Haithcock, III, and Nashville-based Partner, Robert C. Goodrich, Jr., co-authored an article for the Norton Bankruptcy Law Adviser(Issue 12, p. 1-4) in December 2015. The article was titled, Bad News, Will Travel Fast: Third Circuit Imposes “Good Faith” Condition on Involuntary Bankruptcy Petitioners.
In what is characterized as a matter of first impression,1 the United States Court of Appeals for the Third Circuit held on October 16, 2015, in In re Forever Green Athletic Fields, Inc.,2 that the petitioner’s “bad faith” justified dismissing an involuntary petition-even when the statutory criteria for commencing the involuntary case are satisfied-and that bad faith is determined by a “totality of the circumstances.” The addition of this non-statutory requirement for an involuntary bankruptcy petition under § 303 is of utmost importance to creditors and creditors’ rights attorneys.