Opinion ID: 74324
Heading Depth: 3
Heading Rank: 3

Heading: Reversal of Refusal to Dismiss

Text: The district court reversed the bankruptcy court's denial of the Debtor's motion to dismiss. Section 707(a) of the Bankruptcy Code provides for voluntary dismissal after a notice and hearing for cause. See 11 U.S.C. § 707(a), which provides: The Court may dismiss a case under this chapter only after notice and a hearing and only for cause. Id. Three nonexclusive examples of cause are provided.8 The district court in its memorandum opinion stated: In the first place, the record does not disclose good cause for denial of Simmons' petition to dismiss the bankruptcy petition. The only known creditor has apparently obtained all that he is entitled to. Whether he has or not is irrelevant, since he absented himself from the first meeting of creditors and has not filed a claim against the bankrupt estate. In fact, no one has filed a claim against the estate! 8 These three causes are: (1) unreasonable delay by the debtor that is prejudicial to creditors; (2) nonpayment of any fees or charges required under chapter 123 of title 28; and (3) failure of the debtor in a voluntary case to file, within fifteen days or such additional time as the court may allow after the filing of the petition commencing such case, the information required by paragraph (1) of section 521, but only on a motion by the United States trustee. 11 U.S.C. § 707(a). 11 What, then is the justification for keeping this case on the presumably congested docket of the Bankruptcy Court? Surely, it cannot be that the Trustee needs to collect the assets of the bankrupt estate - for there are no creditors. What will he do with these assets once they are collected, other than turn over 40% of their value to his attorney? The Bankruptcy Court plainly erred by denying Simmons' petition to dismiss the petition. Memorandum Opinion, February 19, 1998. The district court suggests that cause was needed for the bankruptcy court not to grant the Debtor's motion to dismiss. Section 707(a) clearly states that a case shall only be dismissed for cause. See 11 U.S.C. § 707(a). Therefore the burden for showing cause is on the moving party. It is clear that the district court was mistaken as to the status of the case. We have already discussed supra as to why no claims had been filed at the time the district court ordered the dismissal. We conclude that the bankruptcy court was correct when it did not find cause for dismissal. The bankruptcy court judge found that it would be in the best interests of the creditors and the Debtor to deny the motion and to allow her debts to finally be resolved. See In Simmons, 97-72040, (Bankr. N.D Ala.) Transcript of Nov. 5, 1997 at 26. We agree with the bankruptcy judge that the Debtor’s history of abuse warranted the bankruptcy court’s denial of the Debtor’s motion. When dismissal will only allow the Debtor to hinder creditors, secret assets, and further the Debtor’s abuse of the system, dismissal of her voluntary petition is not 12 warranted. Cause did not exist for dismissal. See Peterson v. Atlas Supply Corp. (In re Atlas Supply Corp.), 857 F.2d 1061, 1063 (5th Cir. 1988) (holding that a bankruptcy court did not abuse its discretion by failing to dismiss when dismissal would prejudice the creditors).