The U.S. Trustee assigned to the Small Business Development Group case filed with the U.S. Bankruptcy Court a motion to dismiss Small Business Development Group’s Chapter 11 proceeding.
The Trustee asserts, “This case was not filed in good faith. The Debtor has been up-front about why it filed for relief under chapter 11 of the United States Bankruptcy Code (the ‘Code’). One of the primary factors, if not the primary factor, for commencing this chapter 11 case was to remove an action pending in the Supreme Judicial Court in New York. The law is well-settled. Chapter 11 cases filed for the primary purpose of gaining a tactical advantage in litigation are subject to dismissal for bad faith. Further, there is no viable reorganization that the Debtor can achieve. Simply put – the true financial condition of the Debtor is that it has no assets, no income, and no viable prospects.”
The Trustee continues, “The fact that the Debtor has not filed this case in good faith is also evidenced by the inconsistent information the Debtor has provided to the Court. For these reasons, the United States Trustee requests that this Court dismiss the above-captioned chapter 11 case or, in the alternative, convert it to a proceeding under chapter 7 of the Code.”
The Court scheduled a May 5, 2016 hearing to consider the motion. Read more bankruptcy news.
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