Opinion
Bankruptcy No. 83 B 10914.
March 23, 1984.
Jack Weiss, Melville, N.Y., for Chemical Bank.
Raymond J. Aab, New York City, for debtor in possession.
DECISION AND ORDER ON MOTION TO DISMISS
On June 22, 1983, George Blake filed a petition for relief under Chapter 11 of the Bankruptcy Code (the Code). Chemical Bank, the principal creditor, then filed a motion on October 24, 1983, to dismiss the Chapter 11 petition under section 1112(b) of the Code. This motion was joined in by Chase Manhattan Bank on November 8, 1983. Section 1112(b) grants the bankruptcy courts wide discretion in making an appropriate disposition of the case. In re Alves Photo Service, Inc., 6 B.R. 690 (Bkrtcy.D.Mass. 1980); Matter of Levinsky, 23 B.R. 210 (Bkrtcy.E.D.N.Y. 1982).
The debtor, George Blake, had a successful and lucrative psychiatric practice in California. In 1981, Dr. Blake relocated to New York City and purchased a townhouse for $1,050,000, of which $900,000 was financed by Chemical Bank. Dr. Blake defaulted on the first mortgage payment due June 15, 1981, and has made no payments on the mortgage. Chemical Bank then instituted a foreclosure action in Supreme Court, New York County in May of 1982. A few days before judgment was to be entered for Chemical Bank, the debtor filed his Chapter 11 petition.
This court is of the opinion that unless the debtor files a reorganization plan by April 2, 1984, Chemical Bank's motion to dismiss the debtor's Chapter 11 petition should be granted pursuant to section 1112(b)(4). If the debtor has filed a plan, a hearing will then be held on notice to all creditors and to the United States Trustee within ten days of April 2.
§ 1112. Conversion or dismissal.
(b) Except as provided in subsection (c) of this section, on request of a party in interest, and after notice and a hearing, the court may convert a case under this chapter to a case under chapter 7 of this title or may dismiss a case under this chapter, whichever is in the best interest of creditors and the estate, for cause, including — * * *
(4) failure to propose a plan under section 1121 of this title within any time fixed by the court.
11 U.S.C. § 1112(b)(4) (1983).
Accordingly, the motion to dismiss is granted in part.
It is so ordered.