In re Fairfield TIC, LLC, EDVA Case No. 18-73744-VJ (11/29/2018)

The Court dismissed the Debtor's single-asset Chapter 11 case on motion of creditor under Section 1112(b) for cause as the Debtor's case was both filed in bad faith and was objectively futile.  Based upon the lack of assets, equity and cash flow, and considering the structure of the ownership as a tenant-in-common ("TIC") investment vehicle with only one of multiple TICs filing for relief, the Court held that the Debtor could not propose an objectively reasonable plan of reorganization.  Further, the Court found that the Debtor did not file the case in good faith as it did so to delay its largest secured creditor when its controlling member knew there was no reasonable possibility of reorganization.

Date: 
Thursday, November 29, 2018
Category: 
Bad Faith
Best Interests
Burden of Proof
Chapter 11 Issues
Conversion and Dismissal
Dismissal
Chapter: 
11