PRECEDENTIAL

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 14-3906

In re: FOREVER GREEN ATHLETIC FIELDS, INC.,

 Debtor

CHARLES C. DAWSON; KELLI DAWSON,

 Appellants

_____________

On Appeal from the United States District Court

for the Eastern District of Pennsylvania

(D.C. Civ. No. 2-14-cv-00641)

District Judge: Honorable Stewart Dalzell

_____________

Argued: July 9, 2015

Before: FUENTES, NYGAARD, and ROTH, Circuit Judges

(Opinion Filed: October 16, 2015)
2

Aris J. Karalis, Esq. [ARGUED]

Robert W. Seitzer, Esq.

Maschmeyer Karalis

1900 Spruce Street

Philadelphia, PA 19103

Attorneys for Debtor, Forever Green Athletic Fields, Inc.

Steven K. Eisenberg, Esq. [ARGUED]

Stern & Eisenberg

1581 Main Street

Suite 200

Warrington, PA 18976

Attorney for Appellants, Charles C. Dawson and Kelli 

Dawson

Frederic J. Baker, Esq.

United States Department of Justice

Office of the Trustee

833 Chestnut Street

Suite 500

Philadelphia, PA 19107

Attorney for Trustee, Frederic J. Baker

Robert H. Holber, Esq.

41 East Front Street

Media, PA 19063

Attorney for Trustee, Robert H. Holber
3

OPINION OF THE COURT

FUENTES, Circuit Judge.

Creditors who file an involuntary bankruptcy petition 

against a debtor must satisfy several statutory requirements 

before obtaining relief. See 11 U.S.C. § 303. Everyone 

agrees the creditors who filed the petition in this case met 

those requirements. The question is whether their petition 

may nonetheless be dismissed as a bad-faith filing. We hold 

that bad faith provides an independent basis for dismissing an 

involuntary petition. For the following reasons, we will 

affirm. 

I.

The parties are familiar foes. Founded by Keith Day, 

Forever Green Athletic Fields sells artificial turf playing 

fields. In 2005, Forever Green sued one of its competitors, 

ProGreen, for $5 million for diversion of corporate assets (the 

“Bucks County Action”). Charles Dawson, who is an owner 

of ProGreen and a former Forever Green sales representative, 

would be liable if damages are awarded in that suit.

That same year, Charles and his wife, Kelli Dawson, 

sued Forever Green for unpaid commissions and wages (the 

“Louisiana Action”). On March 2, 2011, after years of 

litigation, the Louisiana court entered a consent judgment in 

favor of the Dawsons. With interest and other costs, this 

judgment now totals more than $300,000. To date, Forever 

Green has not paid a penny on this judgment.
4

While the Louisiana Action was still running its 

course, the parties to the Bucks County Action agreed to 

arbitrate their claims. However, on March 30, 2011, just a 

few weeks after the consent judgment was entered in the 

Louisiana Action, ProGreen filed a motion to terminate the 

arbitration. In support of this motion, ProGreen argued that 

“it has become clear that [Forever Green] is insolvent” and 

that Keith Day does not “have the ability or desire to pay the 

Arbitrator’s fees and expenses.” Supp. App. 505. In 

addition, ProGreen said that “Charles and Kelli Dawson have 

a $300,000+ judgment against [Forever Green] and expect 

judgments in the same amount against [Day] very soon. As 

such, any monies paid as advance deposits to the Arbitrator 

by [Forever Green] are subject to execution and 

garnishment.” Id. The next month, the Dawsons transferred 

their judgment in the Louisiana Action to Pennsylvania and 

obtained a writ of execution against the arbitrator and his law 

firm. At that point, with his fees in peril, the arbitrator 

recognized he was adverse to the Dawsons, so he suspended 

the arbitration until the fee issue was resolved.

During his deposition, Charles Dawson offered some 

strategic insight into these actions. With the consent 

judgment in hand, he intended to “[f]ind any available asset 

that Forever Green may have and try to use the lien to seize 

it.” Id. at 710. He testified, “I’m going to use that judgment 

to levy any monies I can find anywhere, whether it be the 

arbitrator or anyone else. So, yeah, if we can get the lien 

paid, that’s my number one objective. If I can get it paid, I’m 

very happy.” Id. at 711.

In response to the suspension of the arbitration, 
5

Forever Green filed a complaint in state court trying to 

reinstate the arbitration (the “Philadelphia Action”). Day 

testified that Forever Green was forced to file this complaint 

because “Charles Dawson and his counsel were determined to 

derail the arbitration and this was our own legitimate response 

to it.” Id. at 198. According to Day, Charles Dawson and his 

counsel had “threatened to put [Forever Green] into 

bankruptcy” if Forever Green did not agree to terminate the 

arbitration. Id. at 199. After Forever Green commenced the 

Philadelphia Action, the Dawsons’ counsel sent a letter to 

Forever Green saying that the arbitration was in an “indefinite 

state of suspension” and “[u]nless and until the [consent 

judgment] for about $300,000.00 is paid off in full, that 

indefinite state of suspension will continue.” Id. at 568.

The judge in the Philadelphia Action issued a 

scheduling order for the parties to brief the issues identified in 

Forever Green’s complaint. The Dawsons’ brief was due on 

May 3, 2012. They never filed it. Instead, they chose a 

different tack. 

Two weeks before their brief was due, the Dawsons

and the law firm Cohen Seglias Pallas Greenhall & Furman, 

which was owed $206,000 from Forever Green, filed an 

involuntary Chapter 7 bankruptcy petition against Forever 

Green. Justifying this decision, Charles Dawson said that his 

counsel “suggested the best way to get to [Forever Green’s] 

assets would be involuntary bankruptcy.” App. 268. It is 

undisputed that the Dawsons and Cohen Seglias satisfied the 

statutory criteria for commencing an involuntary bankruptcy 

case because (1) they are three creditors, (2) they each hold 

an uncontested claim against Forever Green, and (3) their 

claims aggregate at least $15,325 more than the value of liens
6

on Forever Green’s property. See 11 U.S.C. § 303(b). 

Despite the petitioning creditors’ facial compliance with the 

statute, Forever Green moved to dismiss the petition as a badfaith filing. 

The Bankruptcy Court convened an evidentiary 

hearing on the motion. In addition to receiving evidence of

the parties’ course of conduct in the years leading up to the 

filing, the Bankruptcy Court heard testimony about Forever 

Green’s financials. It was established that Forever Green has

essentially shut down its business—in 2012, its operating 

account had no activity and its balance never exceeded $30. 

Forever Green’s focus has been on winding down its affairs 

and recovering assets for its approximately 50 creditors. As 

for the balance sheet, Forever Green has $6 million in assets, 

the largest by far being its claims against ProGreen for $5 

million. On the other side of the ledger, Forever Green has 

$2.3 million in debts, including a $1.3 million secured line of 

credit.

Although Forever Green itself has not been paying any 

of its debts, Day has personally paid off hundreds of 

thousands of dollars of Forever Green debt. He explained 

that he has paid debts for which he had “financial personal 

guarantees.” App. 256. Day acknowledged that neither he

nor Forever Green has paid anything to the Dawsons, but he 

said that secured creditors and certain unsecured creditors are

ahead of them in the pecking order. Day also is personally 

funding all of Forever Green’s current litigation, including 

this suit and the suspended arbitration against ProGreen.

After the parties made their pitches as to whether the 

petition was filed in bad faith, the Bankruptcy Court ruled in 
7

Forever Green’s favor and granted the motion to dismiss. It 

explained that, because bankruptcy courts are courts of 

equity, a petitioning creditor (for involuntary bankruptcies) or 

debtor (for voluntary bankruptcies) must come to the court for 

a proper purpose. Involuntary Chapter 7 proceedings, it said, 

are intended to protect creditors from debtors who are making 

preferential payments to other creditors or from the 

dissipation of the debtor’s assets. Creditors who file petitions 

for other reasons—such as to collect on a personal debt, to 

gain an advantage in pending litigation, or to harass the 

debtor—act in bad faith. The Bankruptcy Court concluded 

that, even though the petitioning creditors met the statutory 

filing requirements, Charles Dawson was a bad-faith creditor 

because he was motivated by two improper purposes: to 

frustrate Forever Green’s efforts to litigate its claim against 

ProGreen and to collect on a debt. The District Court 

affirmed. The Dawsons (without Cohen Seglias) filed this 

appeal.1

II.

We discuss three issues on appeal. First, whether an 

involuntary petition may be dismissed as a bad-faith filing. 

Second, whether the Bankruptcy Court erred in finding bad 

 

1 The District Court had jurisdiction under 28 U.S.C. §

158(a)(1), and we have jurisdiction under 28 U.S.C. §§

158(d)(1) and 1291. We employ the same standard of review 

over the Bankruptcy Court’s decision as that exercised by the 

District Court. We review the Bankruptcy Court’s findings of 

fact for clear error and its legal determinations de novo. In re 

Zinchiak, 406 F.3d 214, 221-22 (3d Cir. 2005). 
8

faith. And third, whether other good-faith creditors could 

have cured the petition. 

A.

Section 303 of the Bankruptcy Code, which governs 

involuntary cases under Chapter 7 or 11, contains three 

requirements for commencing an action against a debtor who 

has twelve or more creditors: (1) there must be three or more 

petitioning creditors; (2) each petitioning creditor must hold a 

claim against the debtor that is not contingent as to liability or 

the subject of a bona fide dispute; and (3) the claims must 

aggregate at least $15,325 more than the value of liens on the 

debtor’s property. 11 U.S.C. § 303(b)(1). It is undisputed 

that the Dawsons and Cohen Seglias satisfied these three 

requirements. The Code further provides that the court “shall 

order relief against the debtor in an involuntary case . . . only 

if . . . the debtor is generally not paying such debtor’s debts as 

such debts become due.” Id. § 303(h)(1). The parties agree 

Forever Green is not paying its debts.

Section 303 has one reference to bad faith. It says that 

if the court dismisses an involuntary petition, it may award 

damages against any creditor “that filed the petition in bad 

faith.” Id. § 303(i)(2). As one might expect, because the only 

mention of bad faith is in § 303(i)(2) and deals with postdismissal damages, the vast majority of litigation concerning 

bad faith centers on that provision. In the typical case, the 

creditors do not satisfy the § 303(b) requirements for filing 

the petition in the first instance (e.g., fewer than three 

creditors filed the petition or the creditors’ claims were 

subject to bona fide disputes). Following dismissal, debtors 
9

invariably file motions for damages under § 303(i)(2), 

arguing the petition was filed in bad faith.

2

Less often litigated is the issue here, namely, whether 

bad faith may serve as a basis for dismissal even where the 

criteria for commencing a suit are satisfied and where the 

debtor is admittedly not paying its debts as they become due. 

According to the Dawsons, we cannot engage in a bad-faith 

inquiry in these circumstances. They say a creditor’s 

subjective motivations are irrelevant because § 303(b)(1)

contains objective criteria for who may file an involuntary 

petition, and if they are satisfied, § 303(h)(1) provides that the 

court “shall order relief” against a debtor who is not paying 

its debts. Some courts have been receptive to this position.

3

 

 

2 See, e.g., In re John Richards Homes Bldg. Co., 439 F.3d 

248, 257 (6th Cir. 2006); In re Bayshore Wire Prods. Corp., 

209 F.3d 100, 102-03 (2nd Cir. 2000); In re Express Car & 

Truck Rental, Inc., 440 B.R. 422, 433 (Bankr. E.D. Pa. 2010); 

In re Skyworks Ventures, Inc., 431 B.R. 573, 578-79 (Bankr. 

D.N.J. 2010); In re Silverman, 230 B.R. 46, 49 (Bankr. D.N.J. 

1998).

3 See, e.g., In re WLB-RSK Venture, No. BAP CC-03-1526-

MOPMA, 2004 WL 3119789, at *6 n.13 (B.A.P. 9th Cir.

Nov. 24, 2004) (“Section 303 sets forth the standards for 

granting or denying an order for relief on an involuntary 

petition. If the grounds for relief exist under section 303, the 

good or bad faith of the petitioning creditor appears 

irrelevant . . . .”); In re Knoth, 168 B.R. 311, 315 (D.S.C. 

1994) (“[T]he motivation of the petitioning creditors is 

irrelevant on the question of whether the involuntary petition 

should be granted.”).
10

Section 303, furthermore, discusses bad faith only in the 

context of assessing damages after a petition has been 

dismissed. If Congress wanted bad faith to be a separate 

basis for dismissal, one could argue, the Code would have 

included language to that effect. And although this Court has 

repeatedly held that a voluntary petition may be dismissed for 

bad faith, the provisions of the Code at issue in those cases 

permitted dismissal for “cause.”4 Section 303, by contrast, 

does not have any similar statutory hook for allowing badfaith dismissals. Congress must have intended something by 

this distinction, the argument goes. 

We disagree that the text of § 303 forecloses bad-faith 

dismissals. The Dawsons make much of the fact that they 

satisfied § 303(b)(1)’s three requirements for commencing an 

involuntary petition. But meeting the § 303(b)(1) criteria, 

like pleading a prima facie case in many actions, is just the 

first hurdle. It does not bear on other defenses that may 

support dismissal. In other words, if the three filing

requirements are not satisfied, we agree the bankruptcy court 

must dismiss the case; but if the three requirements are 

satisfied, that doesn’t mean the bankruptcy court can’t

 

4 See, e.g., In re Myers, 491 F.3d 120, 125 (3d Cir. 2007) (“A 

bankruptcy filing made in bad faith may be dismissed ‘for 

cause’ under 11 U.S.C. § 1307(c).”); In re Tamecki, 229 F.3d 

205, 207 (3d Cir. 2000) (“Section 707(a) allows a bankruptcy 

court to dismiss a petition for cause if the petitioner fails to 

demonstrate his good faith in filing.”); In re SGL Carbon 

Corp., 200 F.3d 154, 162 (3d Cir. 1999) (holding that a 

“Chapter 11 petition is subject to dismissal for ‘cause’ under 

11 U.S.C. § 1112(b) unless it is filed in good faith”). 
11

dismiss the case.

The one reference to bad faith in § 303 supports our

conclusion. Section 303(i)(2) allows a bankruptcy court to 

award damages following dismissal against “any petitioner 

that filed the petition in bad faith.” Under the Dawsons’ 

reading, courts may engage in a bad-faith inquiry only after 

they have dismissed a case for the creditors’ failure to comply 

with the statutory filing requirements. We see no reason why 

the Code would permit the imposition of damages (including 

punitive damages) for bad-faith filings but not allow the same 

conduct—such as using involuntary bankruptcy as a litigation 

tactic in pending proceedings—to provide a basis for 

dismissing the petition. The better view is that, by including 

an express reference to bad faith in § 303, Congress intended 

for bad faith to serve as a basis for both dismissal and 

damages.

Section 303(h)(1), moreover, does not provide that a 

bankruptcy court “shall order relief” against a debtor who is 

not paying its debts. Rather, the court shall order relief “only 

if” the debtor is not paying its debts, meaning a debtor not 

paying its debts is a necessary but not sufficient condition for

ordering relief. An “if” or “if and only if” clause would have 

been more favorable to the Dawsons.

The bigger flaw in the Dawsons’ argument is that it

overlooks the equitable nature of bankruptcy. Time and

again, we have emphasized that “good faith” filing 

requirements have “strong roots in equity.” In re SGL 

Carbon, 200 F.3d at 161; see also In re Tamecki, 229 F.3d at 

207. “At its most fundamental level, the good faith 

requirement ensures that the Bankruptcy Code’s careful 
12

balancing of interests is not undermined by petitioners whose 

aims are antithetical to the basic purposes of bankruptcy.” In 

re Integrated Telecom Express, Inc., 384 F.3d 108, 119 (3d 

Cir. 2004). As courts of equity, bankruptcy courts are 

equipped with the doctrine of good faith so that they can 

patrol the border between good- and bad-faith filings. See In 

re SGL Carbon, 200 F.3d at 161; In re Little Creek Dev. Co., 

779 F.2d 1068, 1072 (5th Cir. 1986) (explaining that the 

“good faith” requirement protects the “integrity of the 

bankruptcy courts by rendering their powerful equitable 

weapons . . . available only to those debtors and creditors 

with ‘clean hands’”). We will not depart from this general

“good faith” filing requirement in the context of involuntary 

petitions for bankruptcy. The majority of courts agree.

5

 

5 See, e.g., In re U.S. Optical, Inc., No. 92-1496, 1993 WL 

93931, at *3 (4th Cir. Apr. 1, 1993) (unpublished) (“Courts 

are duty bound to conduct an inquiry, if requested, to 

determine whether an involuntary petition has been filed in 

good faith. Bad faith filings are to be dismissed.” (citations 

omitted)); In re Bock Transp., Inc., 327 B.R. 378, 381 (B.A.P. 

8th Cir. 2005) (“A bad faith filing can also be cause for the 

dismissal of a[n] [involuntary] petition.”); In re Tichy Elec. 

Co., 332 B.R. 364, 373 (N.D. Iowa 2005) (same); In re 

Alexander, No. 00-10500, 2000 WL 33951465, at *3 (D. Vt. 

Aug. 29, 2000) (“[I]nvoluntary petitions filed in bad faith 

should be dismissed.”); In re Manhattan Indus., Inc., 224 

B.R. 195, 201 (Bankr. M.D. Fla. 1997) (“Section 303(b) of 

the Bankruptcy Code does not expressly refer to good faith 

filings. Involuntary filings must be made in good faith and 

consequences flow if they are not. Dismissal is one possible 

consequence.”).
13

Policy considerations lend further support to this 

conclusion. “[T]he filing of an involuntary petition is an 

extreme remedy with serious consequences to the alleged 

debtor, such as loss of credit standing, inability to transfer 

assets and carry on business affairs, and public 

embarrassment.” In re Reid, 773 F.2d 945, 946 (7th Cir. 

1985). Given these serious consequences, courts should be 

wary of creditors who may find alluring the “retributive 

quality” of thrusting a debtor into bankruptcy.6 Allowing for 

the dismissal of bad-faith filings will encourage creditors to 

file petitions for proper reasons such as to protect against the

preferential treatment of other creditors or the dissipation of 

the debtor’s assets. See In re Silverman, 230 B.R. at 53. 

Accordingly, we hold that an involuntary petition filed under 

11 U.S.C. § 303 may be dismissed for bad faith.

B.

We review the decision to dismiss the case as a badfaith filing for abuse of discretion. In re Myers, 491 F.3d at 

125. The determination of bad faith is “a fact intensive 

 

6 Brad E. Godshall & Peter M. Giluhy, The Involuntary 

Bankruptcy Petition: The World’s Worst Debt Collection 

Device?, 53 Bus. Law. 1315, 1315 (Aug. 1998); see also

David S. Kennedy et al., The Involuntary Bankruptcy 

Process: A Study of the Relevant Statutory and Procedural 

Provisions and Related Matters, 31 U. Mem. L. Rev. 1, 58

(Fall 2000) (explaining that creditors should not “invoke the 

involuntary bankruptcy process . . . based on personal whim 

or vindictiveness seeking to collect an unpaid debt”).
14

determination better left to the discretion of the bankruptcy 

court.” In re Lilley, 91 F.3d 491, 496 (3d Cir. 1996) (citations 

omitted). In terms of allocating burdens of proof, creditors 

are presumed to have acted in good faith. See In re Bayshore, 

209 F.3d at 105. To dismiss the petition, the debtor must

show by a preponderance of the evidence that the creditors 

acted in bad faith. In re Petralex Stainless Ltd., 78 B.R. 

7389, 743 (Bankr. E.D. Pa. 1987).

At the outset, we must decide on the standard for 

evaluating bad faith, which is not defined in the Code. On 

this issue, courts have applied a dizzying array of standards, 

mostly with regard to post-dismissal motions for damages 

under § 303(i)(2). See In re Bayshore, 209 F.3d at 105-06 

(reviewing different standards); Gen. Trading Inc. v. Yale 

Materials Handling Corp., 119 F.3d 1485, 1501-02 (11th Cir. 

1997) (same). Some courts, for instance, apply an “improper 

use” test, which asks whether a “petitioning creditor uses

involuntary bankruptcy procedures in an attempt to obtain a 

disproportionate advantage for itself, rather than to protect 

against other creditors obtaining disproportionate advantages, 

particularly when the petitioner could have advanced its own 

interest in a different forum.” In re K.P. Enter., 135 B.R. 

174, 179 n.14 (Bankr. D. Me. 1992) (internal quotation marks 

omitted). Other courts apply an “improper purpose” test, 

which looks to whether the filing “was motivated by ill will, 

malice, or a desire to embarrass or harass the alleged debtor.” 

In re Bayshore, 209 F.3d at 105. Still others apply an 

“objective test,” which assesses what a reasonable person 

would have believed and what a reasonable person would 

have done in the creditor’s position. In re Wavelength, Inc., 

61 B.R. 614, 620 (B.A.P. 9th Cir. 1986). And yet other 

courts have applied a broad “totality of the circumstances”
15

standard, which effectively combines all the tests and looks to 

both subjective and objective evidence of bad faith. In re 

John Richards, 439 F.3d at 255 n.2.

We adopt the “totality of the circumstances” standard 

for determining bad faith under § 303. This standard is most 

suitable for evaluating the myriad ways in which creditors 

filing an involuntary petition could act in bad faith. It also is 

the same standard we apply when reviewing allegations that a

debtor filed a voluntary petition in bad faith. See In re Myers, 

491 F.3d at 125; In re Lilley, 91 F.3d at 496. In conducting 

this fact-intensive review, courts may consider a number of 

factors, including, but not limited to, whether: the creditors 

satisfied the statutory criteria for filing the petition; the 

involuntary petition was meritorious; the creditors made a 

reasonable inquiry into the relevant facts and pertinent law 

before filing; there was evidence of preferential payments to 

certain creditors or of dissipation of the debtor’s assets; the 

filing was motivated by ill will or a desire to harass; the 

petitioning creditors used the filing to obtain a 

disproportionate advantage for themselves rather than to 

protect against other creditors doing the same; the filing was 

used as a tactical advantage in pending actions; the filing was 

used as a substitute for customary debt-collection procedures; 

and the filing had suspicious timing.

Looking at the totality of the circumstances, we 

conclude that the Bankruptcy Court did not abuse its 

discretion in finding that Charles Dawson filed the 

involuntary petition in bad faith. In the Bankruptcy Court’s 

view, “Dawson’s prepetition conduct indicates that his 

litigation strategy was to use any means necessary to force the 

payment of the Consent Judgment and the abandonment of 
16

Forever Green’s claims against [ProGreen].” In re Forever 

Green Athletic Fields, Inc., 500 B.R. 413, 427 (Bankr. E.D. 

Pa. 2013). In the weeks after Dawson obtained the consent 

judgment in the Louisiana Action, he filed a motion to 

terminate Forever Green’s arbitration proceedings against 

ProGreen, which arose from the separate Bucks County 

Action and sought $5 million in damages. Light on 

meritorious arguments, Dawson’s plan was to use the consent 

judgment to garnish the arbitrator’s fees, thereby forcing the 

arbitrator to halt the arbitration. Dawson and his counsel said 

they would keep the arbitration suspended until Forever 

Green paid on the consent judgment. They also threatened to 

file an involuntary petition unless Forever Green agreed to 

stop the proceedings. Keeping his word, Dawson filed an 

involuntary petition after Forever Green tried to reinstate the 

arbitration.

As the Bankruptcy Court found, Dawson’s actions ran 

counter to the spirit of collective creditor action that should 

animate an involuntary filing. He put his own interests above 

all others. By trying to end the arbitration, Dawson was 

obstructing Forever Green from pursuing its largest asset, the 

potential proceeds of which Forever Green could have used to 

pay its creditors. He was also using the bankruptcy process to 

exert pressure on Forever Green to pay the consent judgment

without regard to Forever Green’s other creditors, many of 

which had higher priority claims. Courts routinely find it 

improper for creditors to use the bankruptcy courts to gain a 

personal advantage in other pending actions or as a debt-
17

collection device.7 

Nor is there any evidence that Dawson engaged in the 

type of due diligence and sober decision-making process that 

should precede any involuntary filing. Instead, the suspicious 

timing of Dawson’s filing—days before his responsive brief 

was due in the Philadelphia Action—and his threatening 

comments to Day suggest he was just using bankruptcy as an 

alternative weapon for stopping the arbitration and cashing in 

on the consent judgment. If Dawson had done an

investigation prior to filing, he would have learned that 

Forever Green was not making preferential payments to its 

creditors. Although Day was using his personal assets to pay 

some of Forever Green’s creditors who also happened to be 

his creditors, the Dawsons offer no argument as to why we 

should attribute these payments to Forever Green. Further

absent from the record is any evidence of Forever Green’s 

 

7 See, e.g., In re Nordbrock, 772 F.2d 397, 400 (8th Cir. 

1985) (“A creditor does not have a special need for 

bankruptcy relief if it can go to state court to collect a debt.”); 

In re Tichy, 332 B.R. at 374 (“Bad faith has been found to 

exist when a creditor’s actions amount to an improper use of 

the Bankruptcy Code as a substitute for customary collection 

procedures.”); In re WLB-RSK Venture, 296 B.R. 509, 515 

(Bankr. C.D. Cal. 2003) (“[Creditor] filed this involuntary 

petition against the alleged debtor as a litigation tactic . . . .”); 

In re Silverman, 230 B.R. at 53 (“Filing an involuntary 

petition with the intent to gain a strategic advantage . . . 

constitutes an improper purpose.”); In re Dami, 172 B.R. 6, 

10 (Bankr. E.D. Pa. 1994) (“Where the purpose of the 

bankruptcy filing is to defeat state court litigation without a 

[bankruptcy] purpose, bad faith exists.”).
18

assets depleting. The only supposed evidence of asset 

dissipation is Forever Green’s prosecution of its claims 

against ProGreen. But Forever Green is not even footing the 

bill for any of its litigation—Day is. And more importantly, 

as the Bankruptcy Court said, it is difficult to “credit[] the 

notion that the pursuit of Forever Green’s only asset that may 

yield a meaningful recovery to its creditors can be 

characterized as a dissipation of estate assets. To the 

contrary, the very act of prosecuting this claim would be 

instrumental to the marshaling of assets integral to any 

bankruptcy administration.” In re Forever Green, 500 B.R. at 

429-30. Accordingly, the record supports the Bankruptcy 

Court’s decision to dismiss the petition as a bad-faith filing.

C.

The Dawsons’ final argument is that, even if Charles

Dawson acted in bad faith, other good-faith creditors should 

have been given the chance to cure the petition. This 

argument arises from 11 U.S.C. § 303(c), which provides that 

“[a]fter the filing of a petition . . . but before the case is 

dismissed or relief is ordered” other creditors may join the 

petition. This provision provides for joinder of creditors as a 

matter of right. See In re FKF Madison Park Grp. Owner, 

LLC, 435 B.R. 906, 907-08 (Bankr. D. Del. 2010). 

An interesting question percolating in the courts is the 

application of the so-called “bar to joinder” rule. Under this 

rule, a petition that was filed in bad faith cannot be saved by 

joining good-faith creditors under § 303(c) prior to dismissal. 

Most courts find this type of curing impermissible and would
19

dismiss such a petition.8 A growing minority, however, find 

this rule unjustified because it blindly lumps good- and badfaith filers together and needlessly punishes everyone.9

 The 

Dawsons would like us to adopt the latter view and allow 

their petition to be cured.

We need not take a stance on this issue because, even 

if we found the “bar to joinder” rule misguided, it is too late 

for any creditor to save the petition. The text of § 303(c) 

allows creditors to join a petition “before the case is 

dismissed.” In the cases discussing the “bar to joinder” rule, 

creditors actually sought to join the involuntary petition prior 

to dismissal. The courts had to decide whether to dismiss the 

petition because of a bad-faith creditor even though other

creditors, if allowed to join, could have cured the 

deficiencies. By contrast, there is no evidence here that any 

creditor tried to join the petition before the case was 

 

8 See, e.g., Basin Elec. Power Coop. v. Mw. Processing Co., 

769 F.2d 483, 486 (8th Cir. 1985); In re Mylotte, David & 

Fitzpatrick, No. 07-11861, 2007 WL 2033812, at *9 (Bankr. 

E.D. Pa. July 12, 2007); In re R & A Bus. Assocs., Inc., No. 

99-2171, 1999 WL 820859, at *2 (E.D. Pa. Oct. 14, 1999); In 

re Centennial Ins. Assocs., Inc., 119 B.R. 543, 546-47 (Bankr. 

W.D. Mich. 1990). 

9 See, e.g., Fetner v. Haggerty, 99 F.3d 1180, 1181 (D.C. Cir. 

1996) (per curiam); In re Hrobuchak, No. 5-14-bk-02098-

JJT, 2015 WL 1651074, at *1 (Bankr. M.D. Pa. Apr. 8, 

2015); In re Houston Reg’l Sports Network, L.P., 505 B.R. 

468, 477 (Bankr. S.D. Tex. 2014); In re FKF, 435 B.R. at 

908; In re Kidwell, 158 B.R. 203, 207 (E.D. Cal. 1993). 
20

dismissed, leaving only two good-faith creditors when the 

statute requires three. And there was plenty of time for Kelli 

Dawson or Cohen Seglias to recruit other potentially curing 

creditors—approximately nine months lapsed between the 

hearing on the motion to dismiss and the issuance of the 

Bankruptcy Court’s decision. Section 303(c), therefore,

provides no aid to the Dawsons. See In re DSC, LTD., 486 

F.3d 940, 948 (6th Cir. 2007) (explaining that the language of 

§ 303(c) “means that a would-be joining creditor must join, if 

at all, before the Court has dismissed an involuntary petition.”

(internal quotation marks omitted)). 

III.

For the foregoing reasons, we will affirm the order of 

the District Court.