UNPUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

In Re: JACOB FRAIDIN,

Debtor.

JACOB FRAIDIN,

Plaintiff-Appellant,

No. 95-2922

v.

ANDRE R. WEITZMAN,

Defendant-Appellee,

OFFICE OF THE UNITED STATES

TRUSTEE,

Party-in-interest.

Appeal from the United States District Court

for the District of Maryland, at Baltimore.

Andre M. Davis, District Judge.

(CA-95-1872-AMD, BK-92-5-2338-JS)

Argued: January 28, 1997

Decided: April 3, 1997

Before RUSSELL and WILKINS, Circuit Judges, and OSTEEN,

United States District Judge for the Middle District of North

Carolina, sitting by designation.

_________________________________________________________________

Affirmed by unpublished per curiam opinion.

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COUNSEL

ARGUED: Jeffrey Allen Liesemer, DAVID, HAGNER, KUNEY &

KRUPIN, P.C., Washington, D.C., for Appellant. Andre R. Weitzman, Baltimore, Maryland, for Appellee. ON BRIEF: Erik D. Bolog,

DAVID, HAGNER, KUNEY & KRUPIN, P.C., Washington, D.C.,

for Appellant. George W. Liebmann, Baltimore, Maryland; Steven J.

Potter, Baltimore, Maryland, for Appellee.

_________________________________________________________________

Unpublished opinions are not binding precedent in this circuit. See

Local Rule 36(c).

_________________________________________________________________

OPINION

PER CURIAM:

Appellant Jacob Fraidin filed for bankruptcy protection under

Chapter 11 of the Bankruptcy Code. Ultimately, the bankruptcy court

converted the proceeding to Chapter 7. Fraidin appealed the order of

conversion, and the district court dismissed the appeal for lack of

jurisdiction, but noted that if it had jurisdiction, it would have

affirmed the bankruptcy court on the merits. We find that the district

court did have jurisdiction and that the order of conversion to a Chapter 7 proceeding should be affirmed.

I.

Fraidin filed for bankruptcy protection under Chapter 11 in August

1991. On November 23, 1994, Andre R. Weitzman, one of Fraidin's

creditors, filed a motion to convert the estate to Chapter 7 pursuant

to 11 U.S.C. § 1112. Fraidin timely objected through counsel, after

which his counsel of record was allowed to withdraw. On April 3,

1995, the bankruptcy court notified Fraidin that it would conduct a

hearing on the motion for conversion on April 11. Fraidin moved to

postpone the hearing, claiming that he had not had an opportunity to

obtain replacement counsel, that he was unable to oppose the motion

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without counsel, and that, in any event, he needed more time to prepare for the motion. During the scheduled hearing, the bankruptcy

court denied Fraidin's motion for continuance, heard evidence and

argument, and, finding that Fraidin had no ability to submit a viable

reorganization plan, entered an order converting the case to Chapter

7.

Fraidin obtained counsel and moved for reconsideration. At the

hearing on that motion, Fraidin argued that he had been denied a fair

hearing because he had not received adequate notice and that Weitzman had failed to carry his burden of showing that conversion was

appropriate. Fraidin offered no evidence to indicate that confirmation

of a plan was a realistic possibility. The bankruptcy court denied the

motion for reconsideration, and Fraidin appealed to the district court.

Although the district court dismissed Fraidin's appeal for lack of

jurisdiction, it noted that even if the order were properly appealable,

the bankruptcy court had not committed any error. The district court

first noted that any error in the notice to Fraidin of the hearing on the

conversion motion was harmless because Fraidin failed to present any

evidence at the hearing on the motion for reconsideration which

would have altered the bankruptcy court's decision to order conversion. The district court also noted that the bankruptcy court did not

abuse its discretion in converting the case from Chapter 11 to Chapter

7, reasoning that cause for conversion had been established based on

Fraidin's failure to submit a viable plan during the four year pendency

of the bankruptcy proceeding. Fraidin appealed the decision of the

district court.

II.

As the appellee conceded at oral argument, the bankruptcy court's

conversion order was immediately appealable. District courts have

"jurisdiction to hear appeals from final judgments, orders, and

decrees, . . . and, with leave of the court, from interlocutory orders

and decrees, of bankruptcy judges." 28 U.S.C.§ 158(a). The conversion order may have been a final order under the relaxed standard for

finality of bankruptcy court orders. In any event, the district court had

jurisdiction under the collateral order doctrine. See In re Looney, 823

F. 2d 788, 791 (4th Cir. 1987) (bankruptcy court order was review-

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able under collateral order doctrine where order"conclusively determine[d] the disputed question, resolve[d] an important issue

completely separate from the merits of the action, and [would] be

effectively unreviewable on appeal from a final judgment") (quoting

Coopers & Lybrand v. Livesay, 437 U.S. 463, 468 (1978)). Thus, the

district court had jurisdiction over the appeal.

III.

In order to convert a case from Chapter 11 to Chapter 7, a bankruptcy court must first determine that there is cause for the conversion. 11 U.S.C. § 1112(b); In re Superior Siding & Window, Inc., 14

F. 3d 240, 242-43 (4th Cir. 1994). Factors constituting cause are set

forth in § 1112(b), which provides in relevant part that:

Except as provided in subsection (c) of this section, on

request of a party in interest or the United States trustee or

bankruptcy administrator, 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 --

(2) inability to effectuate a plan.

11 U.S.C. § 1112(b). Once cause is established, the decision of

whether to convert is left to the discretion of the bankruptcy court

based upon the best interest of the estate and the creditors. Id.

The bankruptcy court relied upon Fraidin's inability to effectuate

a plan as its basis for ordering conversion, and the record substantiates that finding. The trustee explained at length that Fraidin would

not be able to obtain confirmation of a reorganization plan. Indeed,

Fraidin has never submitted a plan for approval. The bankruptcy court

did not abuse its discretion in converting the case to a Chapter 7 proceeding.

The record further demonstrates that any procedural deficiency in

the notice of the hearing was harmless. Although Fraidin had more

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than 20 days notice of the hearing on the motion to reconsider, he

failed to bring to the court's attention at that hearing any new evidence of a viable plan.

Although the district court erred in finding no jurisdiction, we do

not remand because the district court carefully made sufficient review

of the merits of the appeal after its finding of no jurisdiction. Thus,

the matter is appropriately before us as an appeal on the merits. For

the foregoing reasons, the order of conversion of the Chapter 11 to a

Chapter 7 proceeding is affirmed.

AFFIRMED

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