IN RE: KENNETH J. TAGGART
- Summarized by Stephen Falanga , Walsh Pizzi O'Reilly Falanga LLP
- 10 months 1 week ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- No. 23-1251 (3rd Circuit, Feb 29,2024) Not Published
- Tag(s):
-
- Ruling:
- In non-precedential opinion, the Third Circuit affirmed the bankruptcy court's decision to reject an individual pro se Debtor's proposed structured dismissal and instead dismiss the Debtor's chapter 11 petition under section 1112 of the Bankruptcy Code finding the Debtor failed to show a reasonable likelihood of rehabilitation.
- Procedural context:
- Debtor, Kenneth J. Taggart, appealed pro se from the District Court’s affirmance of a Bankruptcy Court order dismissing his chapter 11 bankruptcy petition. The Debtor argued that the Bankruptcy Court committed error by not agreeing to the Debtor's proposed structured dismissal that had not been agreed to by any party in interest or creditor. The Debtor also argued that his due process rights were violated when the Bankruptcy Court dismissed his case without holding a separate hearing regarding his structured dismissal request. The Third Circuit affirmed the District Court's affirmance of the underlying Bankruptcy Court's decision, finding that there was no basis to conclude that the Bankruptcy Court committed any error in its determination that a non-conditional dismissal was most appropriate, and the Debtor did not establish that his due process rights were violated by the Bankruptcy Court.
- Facts:
- In September 2021, Kenneth J. Taggart ("Debtor") filed a pro se voluntary petition under Chapter 11 of the United States Bankruptcy Code. Debtor's primary assets were several properties. He had previously defaulted on his mortgages for those properties around 2009 and subsequently initiated numerous state and federal lawsuits seeking to prevent foreclosure by his creditors. After initiating his bankruptcy case, Debtor did not file a plan of liquidation or reorganization to indicate how he sought to proceed. In April 2022, the City of Philadelphia moved to dismiss Debtor's case for cause. The City argued that cause existed for the dismissal under 11 U.S.C. § 1112(b)(1) because Debtor's reported monthly income was insufficient to pay his debts and there was no reasonable likelihood of rehabilitation, among other reasons. Another party sought a bar against Debtor preventing him from refiling a bankruptcy petition for two years, given his extensive litigation history. At a May 2022 hearing, Debtor conceded that rehabilitation of the estate was unlikely because of the litigation he was pursuing and intended to pursue for several more years, preventing the development of a plan. Rather than a typical dismissal, Debtor sought a “structured dismissal” in which various conditions that he requested would be attached to the dismissal. His requests included that a claim of one mortgage-holder be dismissed through a sale of his home, free of all liens, to one of the other occupants of the home. He also sought to secure various assets after dismissal of the case, including his car, sports tickets, and a timeshare. At the conclusion of the hearing, the Bankruptcy Court dismissed Debtor's petition without imposing any conditions or a refiling bar. The Bankruptcy Court concluded that Debtor had not attempted to resolve his claims with his creditors and that his operating reports did not show sufficient income to pay his debts. Accordingly, it concluded that the case lacked a reasonable likelihood of rehabilitation, making dismissal warranted. Debtor timely appealed to the District Court which affirmed the decision of the Bankruptcy Court.
- Judge(s):
- BIBAS, PORTER, and MONTGOMERY-REEVES
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