John P. Fitzgerald, III

Acting United States Trustee

For Region 4

Jack Frankel, Attorney

115 S Union Street

Alexandria, VA 22314

(703) 557-7229

Jack.I.Frankel@USDOJ.Gov

United States Bankruptcy Court

Eastern District of Virginia

Alexandria Division

In re:

Blue Ridge Arsenal, Inc., Case No. 18-10472-KHK

Debtor. Chapter 11

 Hearing: January 15, 2019, 11:00 am

 Courtroom III, 3rd Floor

Motion to Dismiss or Convert Case to Chapter 7

 Comes Now, John P. Fitzgerald, III, Acting United States Trustee for Region 

4, and moves the Court to dismiss or convert this case to Chapter 7 pursuant to 

Section 1112(b)(4) of the Bankruptcy Code. 

 Cause exists to grant the requested relief:

• unreasonable delay in filing disclosure statement and plan of reorganization, 

11 U.S.C. Section 1112(b)(4);

• substantial or continuing loss to or diminution of the estate and the absence 

of a reasonable likelihood of rehabilitation.

Jurisdiction

1. This Court has authority to hear and decide this matter. 28 U.S.C. § 1334.

2. This is a core proceeding. 28 U.S.C. §157.

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Statement of Facts

1. On February 9, 2018, the Debtor filed a petition for relief under Chapter 11

of the Bankruptcy Code. 

2. The Debtor has not filed a disclosure statement and plan of reorganization.

3. No plan of reorganization has been confirmed.

4. According to the Debtor’s monthly operating reports filed from February to 

October, 2018, had:

Revenue: $964,977

Cost of Goods Sold: $195,259

Gross Profit: $769,718

Operating Expenses: $775,594

Net Loss $ (5,876)

Argument

 The Court, for cause, after notice and hearing, may dismiss or convert a case to 

a case under Chapter 7 whichever is in the best interests of creditors and the estate. 

11 U.S.C. Section 1112(b)(1). 

 The Acting United States Trustee recognizes that finding an unreasonable delay 

in filing a disclosure statement and plan is dependent on the unique circumstances 

of the particular case. Quarles v. U.S. Tr., 194 B.R. 94, 97 (W.D. Va. 1996)

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As stated in In re Sunflower Racing, Inc. 226 B.R. 665, 670 (D. Kan. 1998) “The 

bankruptcy court's decision of what constitutes “unreasonable delay” and 

“prejudice” is clearly discretionary and very fact intensive. Bankruptcy courts are 

given a great deal of discretion to say when enough is enough.” (citations omitted, 

quotation marks omitted).

 This is not a large or complicated case.

 The Debtor has had the protection of the bankruptcy laws for ten months. A 

disclosure statement and plan of reorganization should have been filed by now. 

Cases should not remain on the docket like beached whales. 

 As another cause, the Debtor has incurred a year to date loss.

 There is no bright-line test to determine whether conversion or dismissal is in 

the best interests of the creditors and the estate. In re Babayoff, 445 B.R. 64, 81 

(Bankr. E.D.N.Y. 2011).

 There are no unusual circumstances establishing that converting or dismissing 

this case is not in the best interests of the estate and creditors.

 John P. Fitzgerald, III,

Acting United States Trustee

For Region 4

/s/ Jack Frankel

Jack Frankel, Attorney

Office of United States Trustee

115 S Union Street

Alexandria, VA 22314

(703) 557-7229

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Certificate of Service

 I hereby certify that on the 27th day of November, 2018, I mailed, United States mail, first 

class, postage prepaid, a true copy of this motion and notice of motion and hearing to:

Blue Ridge Arsenal, Inc.

14725 K Flint Lee Road

Chantilly, VA 20151

Robert M. Marino, Esq.

Redmon Peyton & Braswell

510 King Street, Suite 301

Alexandria, VA 22314-3143

/s/ Jack Frankel

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