In re Dini, 566 B.R. 220

Debtor David L. Dini and creditor/former partner John H. Sammarco have litigated disputes arising from Dini’s purchase of Sammarco’s NTMS stock and subsequent missed payments; Sammarco sued in state court in 2012.
Dini and NTMS filed bankruptcy (chapter 11) in June 2013; Dini’s case converted to chapter 7 in February 2014.
Sammarco moved to dismiss under § 707(b) in June 2014 alleging bad faith/lavish spending; the court found Dini’s debts were primarily non-consumer and denied that motion in January 2015.
After the Seventh Circuit’s decision in In re Schwartz (Aug. 2015), Sammarco waited until September 9, 2016—shortly before a § 727 discharge trial—to file a new motion to dismiss under § 707(a), relying on Schwartz.
Dini argued the § 707(a) motion is barred by laches because of Sammarco’s multi-year delay; the court held a threshold laches analysis was required before deciding the § 707(a) motion.

Issue	Plaintiff's Argument (Sammarco)	Defendant's Argument (Dini)	Held
1) Whether laches is available as a defense to a creditor’s § 707 motion	Laches not applicable; § 707(a) has no time limit so laches shouldn’t bar creditor motions	Laches applies to statutes without limiting provisions to protect finality and prevent prejudice	Held: Laches is available to bar § 707 motions
2) Whether Sammarco’s delay in filing § 707(a) was reasonable	Delay justified: waited for controlling Seventh Circuit decision (Schwartz) and to accumulate stronger post-Schwartz facts	Delay was unreasonable: operative facts were known in June 2014 and Schwartz was publicly available in Aug. 2015; counsel admitted awareness	Held: Delay (≈2 years from June 2014; 13 months post‑Schwartz) was unreasonable and inexcusable
3) Whether Dini suffered material prejudice from the delay	Little prejudice; motion could be decided on the papers and would not require extensive new discovery	Prejudice: prolonged uncertainty, substantial litigation expense (hundreds of thousands), and unnecessary separate litigation of § 727 adversary that could have been consolidated earlier	Held: Delay caused material prejudice to Dini
4) Net effect: whether laches bars the § 707(a) motion	N/A	N/A	Held: Sammarco’s § 707(a) motion is barred by laches and denied

Hot Wax, Inc. v. Turtle Wax, Inc., 191 F.3d 813 (7th Cir. 1999) (defines laches as equitable maxim for those who sleep on rights)
Smith v. Caterpillar, Inc., 338 F.3d 730 (7th Cir. 2003) (sets laches two‑part test: unreasonable delay and prejudice)
Lingenfelter v. Keystone Consol. Indus., Inc., 691 F.2d 339 (7th Cir. 1982) (laches protects against prejudice from changed conditions; claimant bears burden explaining delay)
Chattanooga Mfg., Inc. v. Nike, Inc., 301 F.3d 789 (7th Cir. 2002) (sliding‑scale approach to delay and required prejudice)
Cook v. City of Chicago, 192 F.3d 693 (7th Cir. 1999) (limitations and laches promote finality and stability of obligations)
Bennett v. Tucker, 827 F.2d 63 (7th Cir. 1987) (reasonableness of delay assessed in context; delay not unreasonable until law is clear)
In re Schwartz, 799 F.3d 760 (7th Cir. 2015) (held § 707(a) may support dismissal for a debtor’s unjustified refusal to pay debts/lavish post‑petition spending)