Diwan, LLC v. Maha-Vishnu Corp.

Debtor challenges the district court's affirmance of the dismissal of its small business Chapter 11 bankruptcy. The court explained that the bankruptcy court's feasibility concerns would have existed even had debtor succeeded on its impairment-of-collateral argument. Even giving debtor the benefit of the impairment-of-collateral issue, the court found a sufficient basis in the record to defer to the bankruptcy court's "broad discretion" in determining whether a Chapter 11 case should be dismissed. In this case, the bankruptcy court noted primarily the issue of feasibility, that debtor's case had been pending for three years, and its failure to present a confirmable plan imposed substantial and continuing losses on its creditors. Accordingly, the court affirmed the judgment. View "Diwan, LLC v. Maha-Vishnu Corp." on Justia Law