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In re Lester (Case No. 09-70048) 05/04/09

Debtor filed a motion to convert from chapter 13 to chapter 11. Grundy National Bank objected. Debtors filed this adversary proceeding to prevent an allegedly fraudulent transfer induced by the bank and the recovery of money and property transferred in accordance therewith. Grundy asserts that the motion to convert was not filed in good faith. The Court noted that the case law on the issue was sparse and that the Court has discretion whether to grant or deny a motion to convert to chapter 11. The Court also noted that the debtors satisfied the only explicit conversion requirement under the Bankruptcy Code. Accordingly, the Court granted the Debtors’ motion to convert.

Date: 
Monday, May 4, 2009
Category: 
Adversary Proceedings
Conversion and Dismissal
Good Faith
Chapter: 
13