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Client-lender wins dismissal of bankruptcy case

A commercial property client and lender recently won summary dismissal of a bankruptcy case. Chapter 11 bankruptcies are used by commercial property owners to reorganize their debts, but they can also be used to delay and leverage secured creditors. Chapter 11 cases are time consuming and expensive. However, 11 U.S.C. section 1112(b) allows a creditor to, under certain circumstances, move for and obtain dismissal of the bankruptcy where the creditor can show evidence of a lack of good faith by the debtor in pursuing the bankruptcy or gross mismanagement of the bankruptcy estate.

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