Burr Alert: Court Denies Creditor's Motion to Dismiss Chapter 11 Case Despite Multiple Factors in Favor of Dismissal

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In a recent case1 out of the bankruptcy court for the Southern District of Florida (the "Court"), a secured creditor moved to dismiss a debtor's bankruptcy case "for cause" based on the debtor's bad faith filing.2 The debtor owned certain commercial real estate in south Florida (the "Commercial Property") and leased space to various tenants, one of which had recently applied for both state and federal licenses to sell medical marijuana.3 The secured creditor had a first-position mortgage on the Commercial Property.4 After a decade-long lending relationship soured, the debtor initiated a lender liability action against the secured creditor in state court.5 The secured creditor subsequently filed three state court actions against the debtor including, inter alia, an action to foreclosure its mortgage on the Commercial Property (the "Foreclosure Action").6

A final judgment was entered in the Foreclosure Action and the state court scheduled a foreclosure sale for the Commercial Property.7 On the eve of the foreclosure sale, the debtor removed the state court case to federal court, thereby cancelling the sale.8 The Foreclosure Action was subsequently remanded and a second foreclosure sale was scheduled.9 Once again, on the eve of the sale, the debtor sought to remove the Foreclosure Action to federal court.10 Similarly, the federal court remanded the Foreclosure Action to state court, this time entering an Order enjoining the debtor from any further removals to federal court.11

Download the full article, "Burr Alert: Court Denies Creditor's Motion to Dismiss Chapter 11 Case Despite Multiple Factors in Favor of Dismissal" written by Armando Nozzolillo.

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