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In re Lake Region Development, Incorporated

Bankr. No.: 
93-10192
Chapter: 
11
Date of Decision: 
January 26, 1994
Issue: 
Whether this case and a companion case (Marshall Manor ) should be dismissed as bad faith, successive filings?
Ruling: 
Both cases were dismissed. The Court found each Debtor's second Chapter 11 petition was not filed in good faith. Debtors had abused their first chance to reorganize and had not attempted to resolve claims of major creditors, despite having sufficient income to make payments on the claims. There had not been sufficient changes in Debtors' financial circumstances since the last cases were dismissed to warrant another reorganization attempt. Further, the second petitions were filed in bad faith because insiders and principals had removed substantial cash from the corporations over the past year but had not paid anything to the corporations' two major creditors. Finally, there were no unsecured claim holders that would benefit from a reorganization.
Full Bankruptcy Court Decision: 
Appeal Summary: 
The district court affirmed the bankruptcy court’s decision concerning each Debtor.
Full Bankruptcy Appellate Panel/District Court Appeal Opinion: