Prometheus Health Imaging, Inc. v. U.S. Trustee (In re Prometheus Health Imaging, Inc.)

Citation:
Ninth Circuit Bankruptcy Appellate Panel Case No. CC-14-1576-FKiKu (November 2, 2015)
Tag(s):
Ruling:
The Bankruptcy Appellate Panel ("BAP"), in the ruling determined not appropriate for publication, vacated the bankruptcy court's order dismissing the Chapter 11 case as a bad faith filing and remanded the case to the bankruptcy court for further proceedings. A bankruptcy court's findings of fact must be sufficiency to enable a reviewing court to determine the factual basis for the court's ruling.
Procedural context:
Prometheus Health Imaging, Inc. ("Debtor") appealed the bankruptcy court's order dismissing the Chapter 11 case as a bad faith filing.
Facts:
Debtor had been in litigation in both the United States and France regarding claims asserted against General Electric Medical Systems Europa ("GEM"). The Debtor filed Chapter 11 in an effort to seek a stay of the decision entered in France. The Debtor was not an operating business when it commenced the Chapter 11, but asserted that the recovery from the lawsuit against GEM would be sufficient to pay the six creditors listed in the Schedules. The Debtor filed a Chapter 11 Plan and Disclosure Statement. The Office of the United States Trustee filed an Objection, and the Debtor filed an amended Disclosure Statement. In the interim, the Court entered an Order to Show Cause regarding whether the case was properly filed in the bankruptcy court. The BAP referenced to certain portions of the transcript related to the hearing, and determined that even though the bankruptcy court had broad discretion regarding establishing "cause" for dismissal. In the present matter the bankruptcy court raised six issues regarding the Order to Show Cause, and briefly referenced two of the six issues.
Judge(s):
FARIS, KIRSCHER, and KURTZ, Bankruptcy Judges.

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