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Litton Loan Servicing, L.P. v. Dennis Schubert

Summarizing by Amir Shachmurove

In re Myron Hale

Case Type:
Case Status:
United States Bankruptcy Appellate Panel Case No. CC-19-1225-SFL (9th Circuit, Sep 28,2020) Not Published
The Bankruptcy Appellate Panel affirmed the bankruptcy court's denial of the Debtor's motion to dismiss. The Debtor does not have an absolute right to dismiss; rather, the Debtor must demonstrate cause for dismissal under the totality of circumstances. The Bankruptcy Appellate Panel determined that regardless of the relatively small amount of unsecured claims, the Debtor failed to provide any evidence of his intent to repay creditors. Therefore, the interest of the creditors was best served by denying the motion to dismiss.
Procedural context:
After the Chapter 7 case was administratively closed, the Chapter 7 Panel Trustee learned of the Debtor's probate estate proceeding. The Trustee sought to reopen the administrative case. The Debtor filed a motion to dismiss alleging that he would work out a payment plan with the creditors. The bankruptcy court denied the Debtor's motion to dismiss. Debtor appealed. However, the Debtor failed to provide a transcript of the bankruptcy court proceeding. The Bankruptcy Appellate Panel determined, in its discretion, there was a sufficient record to conduct a meaningful review.
Consumer Debtor filed Chapter 7 Bankruptcy. Unknown to the appointed Chapter 7 Panel Trustee, the Debtor's father passed away pre-petition. The Debtor did not schedule the interest in his father's estate or notify the Chapter 7 Trustee of the interest at the Meeting of Creditors. Approximately one month after filing Chapter 7, the Debtor filed a petition in state court seeking to open a probate. Of note what the father's former residence the Debtor valued in the amount of $1.8 million. The Chapter 7 Panel Trustee submitted the no-asset report and the case was administratively closed. Upon learning of the probate proceeding, the Trustee sought to reopen the administrative case. The Debtor sought dismissal of the Chapter 7 case on the basis that the amount of unsecured claims was small and the Debtor intended on working out repayment plans.
Honorable Spraker, Fairs, and Lafferty

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