Opinion
BK No. 05-13009.
January 26, 2006
Theodore Orson, Esq. Attorney for Alleged Debtor ORSON AND BRUSINI LTD. Providence, Rhode Island.
John Boyajian, Esq. Attorney for Petitioning Creditors BOYAJIAN HARRINGTON RICHARDSON Providence, Rhode Island.
ORDER DENYING ALLEGED DEBTOR'S MOTION FOR PARTIAL SUMMARY JUDGMENT
Heard on January 25, 2006, on the sole legal question of whether an insider can be a petitioning creditor under 11 U.S.C. § 303(b)(2) when the alleged debtor has fewer than twelve creditors. For the reasons argued by the Petitioning Creditors in their brief, Doc. #80, and made on the record during oral argument, which I adopt and incorporate herein by reference, I answer the question in the affirmative, and rule that an insider may be a petitioning creditor when the alleged debtor has fewer than twelve creditors. Accordingly, the Alleged Debtor's "Motion for Partial Summary Judgment" is DENIED.
In addition to our ruling based on the petitioning creditors' arguments, I also disagree with the Alleged Debtor's interpretation of the statute, that Congress intended that the transferee of an avoidable transfer be excluded as a petitioning creditor in cases where there are fewer than twelve creditors. It would be difficult to imagine an instance where such a transferee would ever aspire to being a petitioning creditor in an involuntary bankruptcy, and therefore, conclude that Congress did not intend to provide the exclusion proposed by the Alleged Debtor.