Opinion
Case No. 15-20489
12-14-2015
In re: Andover Covered Bridge, LLC, Debtor
Chapter 11
OPINION
This matter came before me on the October 21, 2015 Motion of the United States Trustee to Convert or Dismiss the Chapter 11 Case of Andover Covered Bridge, LLC (Docket Entry "DE" 35). Based upon the facts established on the record, including the undisputed facts set forth in the various pleadings, and the arguments made by counsel in their pleadings and at the hearing on December 8, 2015, I conclude that the United States Trustee has demonstrated that cause exists under 11 U.S.C. § 1112(b) to dismiss this case. Such cause includes, but is not limited to, the late filing of certain monthly operating reports, the accrual of post-petition debt without the income or other apparent ability to pay such debt, and the absence of a reasonable likelihood of rehabilitation. I further conclude that dismissal, rather than conversion of this case, is in the best interests of the creditors and the estate.
Here, the Debtor maintains that it will soon submit a liquidating plan. The U.S. Trustee argues that a liquidating plan is not enough to save the Debtor from dismissal as such a plan would not satisfy the rehabilitation requirement in §1112 (b)(4). In this case, I agree with the U.S. Trustee. "Rehabilitation" as used in §1112(b)(4)(A) is distinct from a reorganization; while the latter can encompass liquidation, the former generally does not. 5 Norton Bankr. L. & Prac. 3d § 103:7. In addition, a Chapter 11 plan to rehabilitate must be grounded in something more concrete than a speculative intention to liquidate and thus cease operations. In re Costa Bonita Resort, Inc. 513 B.R. 184, 198 (Bankr. D.P.R. 2014). --------
It is therefore hereby ORDERED, ADJUDGED, and DECREED that the chapter 11 case of Andover Covered Bridge, LLC is hereby DISMISSED. A separate order shall enter. Dated: December 14, 2015
/s/ Peter G. Cary
Hon. Peter G. Cary
Judge, U.S. Bankruptcy Court
District of Maine