Aspen Skiing Co. v. Cherrett (In re Cherrett)

Aspen Skiing Co. v. Cherrett (In re Cherrett), BAP No. CC-14-1056-DKiTa (B.A.P. 9th Cir. Nov. 7, 2014)
AFFIRMING the bankruptcy court, the Bankruptcy Appellate Panel of the Ninth Circuit determined that (1) the order denying the section 707(b) motion to dismiss was a final order that could be appealed immediately and (2) the bankruptcy court did not err in finding that the debtor's primary purpose in obtaining the housing loan was "primarily business/employment-oriented" and therefore not consumer debt within the meaning of section 101(8) of the Bankruptcy Code. "[T]he key factor in determining whether secured debt is consumer debt lies in the debtor's purpose in incurring the secured debt," and "[w]here the debt was incurred for more than one purpose, the primary purpose of the debt will determine its nature."
Procedural context:
Appeal from bankruptcy court's denial of a motion to dismiss for abuse under section 707(b)(1) of the Bankruptcy Code, reviewed de novo.
The bankruptcy court denied debtor's former employer's motion to dismiss chapter 7 case for abuse under section 707(b)(1) of the Bankruptcy Code and Rule 1017 of the Federal Rules of Bankruptcy Procedure. Employer argued that debtor had sufficient projected disposable income to pay creditors through a chapter 13 plan. In particular, the employer contended that debtor's debts were primarily consumer debts, and that a housing loan sponsored by the employer (which comprised most of debtor's debt) was a consumer debt under section 101(8) of the Bankruptcy Code. The bankruptcy court denied the motion and found that debtor's debts were not primarily consumer debts.

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