492 B.R. 232
Bankr. S.D. Ohio2012Background
- This is the Debtors' second Chapter 12 case seeking to reorganize to keep a family farm.
- At the confirmation hearing the Debtors sought a continuance to file a revised plan based on jurisdictional, standing, and securitization theories.
- Creditors and the Chapter 12 Trustee opposed any continuance and moved to dismiss with a two-year refiling bar; the court had previously addressed related motions and pro se filings.
- The court set and rescheduled hearings, evaluated the Debtors’ proposed plan and its feasibility, and required supplemental documentation regarding insurance, income, and eligibility.
- The court found the Proposed Plan deficient on best interests, feasibility, and good faith, and ultimately dismissed the case with a two-year bar; relief from stay and adequate protection issues were resolved moot.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Continued confirmation hearing | Pertuset urged a 30-day continuance to file a revised plan. | Creditors opposed delay to protect creditor interests and estate. | Denied |
| Confirmability of the Proposed Plan | Debtors contended plan could be confirmed with proper adjustments. | Objections argued lack of best interests, feasibility, and good faith. | Denied |
| Motions to Dismiss for Cause | Creditors sought dismissal for gross mismanagement and lack of rehabilitation. | Debtors contested dismissal and argued plan viability. | Granted |
| Two-year bar to refiling | Creditors urged a bar to refiling to prevent abuse of the system. | Debtors urged no bar or a shorter bar. | Granted |
| Relief from stay/adequate protection moot | ASB sought relief and protection for collateral; other issues remained unresolved. | Arguments moot due to dismissal and lack of plan confirmation. | Denied as moot |
Key Cases Cited
- In re Caldwell, 895 F.2d 1123 (6th Cir. 1990) (totality of circumstances for good faith and education of plan)
- In re Alt, 305 F.3d 413 (6th Cir. 2002) (factors for good faith in bankruptcy filings)
- In re Burger, 254 B.R. 692 (Bankr.S.D.Ohio 2000) (good faith in filing and plan consideration)
- In re Zurface, 95 B.R. 535 (Bankr.S.D. Ohio 1989) (good faith considerations in Chapter 12 plans)
- In re Knudsen, 389 B.R. 643 (N.D. Iowa 2008) (chapter 12 purpose to protect family farmers and avoid abuse)