PCC Rokita S.A. v. HH Technology Corp., 659 B.R. 788

PCC Rokita S.A. (Rokita), a creditor, obtained a foreign default judgment against HH Technology Corp. (HHT) and initiated involuntary Chapter 7 bankruptcy after HHT made an assignment for the benefit of creditors.
Rokita filed an involuntary petition as the sole creditor; later joined by Shanghai Morimatsu Chemical Equipment Co. (Morimatsu), so there were two petitioning creditors.
Bankruptcy Code § 303(b) requires three petitioning creditors if the debtor has 12 or more creditors, and fewer if less; HHT produced a list indicating it had more than 12 unsecured creditors.
DFT Properties, LLC (DFT), a creditor, sought to join the petition after the court-imposed deadline had passed. The bankruptcy court denied DFT’s joinder for lack of good cause.
The bankruptcy court dismissed the involuntary petition, finding insufficient petitioning creditors, and found that certain creditors should not be excluded from the count because petitioners failed to show they received voidable preferential transfers.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether bankruptcy court could set a joinder deadline before dismissal of the case	Rokita: § 303(c) gives creditors an unfettered statutory right to join prior to dismissal or relief, so no earlier cutoff allowed.	HHT: Court has inherent authority to manage docket and may set earlier deadline to ensure fairness and efficiency.	Court can set reasonable joinder deadline; not plain error to do so.
Whether court should have allowed DFT's late joinder	Rokita: DFT showed good cause due to new information discovered after deadline.	HHT: DFT had notice of deadline, declined to join timely, and later changed mind without adequate cause.	DFT’s motion was untimely; denial not error as DFT had notice and made strategic choice.
Whether bankruptcy court erred by counting creditors with potential § 547 defenses	Rokita: Only prima facie showing of a preferential transfer needed to exclude; defenses to avoidance need not be considered.	HHT: § 547(c) defenses must be considered by statute; burden remains on petitioners to show avoidability.	Court must consider affirmative defenses; burden of proof properly on petitioners.
Whether defenses to avoidance must be specifically pleaded to be considered	Rokita: Defenses not specifically pleaded should be waived.	HHT: In context of involuntary petition, formal pleading rules less rigid; no unfair surprise.	No bar to considering defenses; no unfair prejudice, and Appellants contributed to timing.

In re Crown Sportswear, Inc., 575 F.2d 991 (1st Cir. 1978) (addressing right to intervene in involuntary bankruptcy)
In re DSC, Ltd., 486 F.3d 940 (6th Cir. 2007) (recognizing court authority to set deadlines in involuntary bankruptcy proceedings)
Rosario-Diaz v. Gonzalez, 140 F.3d 312 (1st Cir. 1998) (authority of trial courts to manage case schedules)
NAACP v. New York, 413 U.S. 345 (1973) (standards for timeliness of intervention)
United States v. Ron Pair Enters., Inc., 489 U.S. 235 (1989) (plain language of statute controls statutory interpretation)
Blixseth v. Montana Dep’t of Revenue, 581 B.R. 882 (D. Nev. 2017), aff'd in part, 942 F.3d 1179 (9th Cir. 2019) (burdens in contests over involuntary petitions)
Popular Auto, Inc. v. Reyes-Colon (In re Reyes-Colon), 922 F.3d 13 (1st Cir. 2019) (petitioning creditors bear burden of showing number and ineligibility of creditors)