A. Where We Left Off Part II of this series focused on the first element of section 1112(b)’s dismissal test: whether “cause” exists for the court to dismiss or convert the case. Once the judge determines that cause exists, the court must dismiss or convert the case. As a result, a party seeking the approval of a proposed structured dismissal must prove that the structured dismissal is better for creditors than converting the case to…
STRUCTURED DISMISSALS – HOW THEY WORK PART III: THE BEST INTERESTS OF THE CREDITORS TEST
Structured Dismissals – How They Work Part II: Proving That Cause Exists to Dismiss the Case Under Section 1112(b)
A. Where We Left Off As noted in Part I, movants seeking approval of a structured motion to dismiss must generally prove that: (1) the court has the power to enter an order approving a structured dismissal; (2) “cause” exists to approve the structured dismissal; and (3) the structured dismissal is in the best interest of the debtor’s creditors. Part I addressed courts’ authority to enter orders approving structured dismissals under section 105(a) of the…