Court Opinion

ID: 5119412
Source: CourtListenerOpinion
Date Created: 2021-10-19 18:00:36.63118+00
Date Added: 2024-06-11T08:22:12.214161
License: Public Domain

Case: 21-50293    Document: 00516059859       Page: 1   Date Filed: 10/19/2021

          United States Court of Appeals
               for the Fifth Circuit                             United States Court of Appeals
                                                                          Fifth Circuit

                                                                        FILED
                                                                 October 19, 2021
                               No. 21-50293                        Lyle W. Cayce
                             Summary Calendar                           Clerk

   In the Matter of: Mohammad Reza Assadi,

                                                                     Debtor,

   Mohammad Reza Assadi, doing business as Robland, L.L.C.,
   doing business as F&F Family, L.P., doing business as Landmag
   Corporation, doing business as Amrco, Incorporated, doing
   business as Gidland Corporation, doing business as Texas Ecars,
   L.L.C., doing business as F&F Operating Company, L.L.C., doing
   business as Auomax Automotive Group,

                                                                Appellant,

                                    versus

   Randolph N. Osherow,

                                                                  Appellee.

                 Appeal from the United States District Court
                      for the Western District of Texas
                           USDC No. 1:20-CV-998

   Before King, Costa, and Ho, Circuit Judges.
Case: 21-50293     Document: 00516059859           Page: 2    Date Filed: 10/19/2021

                                    No. 21-50293

   Per Curiam:*
          Debtor Mohammad Reza Assadi filed a voluntary petition under
   Chapter 11 of the Bankruptcy Code on July 7, 2020. On September 11, 2020,
   in a show-cause hearing, the bankruptcy judge converted the case from one
   under Chapter 11 to Chapter 7 for reasons including Assadi’s bad title to his
   real property assets and his lack of consistent income. Assadi, proceeding pro
   se, challenged the bankruptcy court’s conversion order, and the district court
   affirmed. The sole issue on appeal is whether the bankruptcy court erred by
   involuntarily converting the case to Chapter-7 liquidation for cause pursuant
   to 11 U.S.C. § 1112(b)(1). Because the record does not indicate that the
   bankruptcy court abused its discretion, we AFFIRM.
          We have jurisdiction over all final decisions of district courts rendered
   on appeal from a bankruptcy court. 28 U.S.C. § 158(d); Matter of Koerner,
   800 F.2d 1358, 1360 (5th Cir. 1986). A bankruptcy court has broad discretion
   in determining “cause” under § 1112(b), and such decisions are reviewed for
   abuse of discretion. Matter of Sullivan Cent. Plaza I, Ltd., 935 F.2d 723, 728
   (5th Cir. 1991); Matter of Koerner, 800 F.2d at 1367-68.
          The court “shall convert a case under [Chapter 11] to a case under
   [C]hapter 7 . . . for cause.” 11 U.S.C. § 1112(b)(1). And included in the non-
   exhaustive list of what constitutes “cause” are the following: a “substantial
   or continuing loss to or diminution of the estate and the absence of a
   reasonable likelihood of rehabilitation” and an “inability to effectuate
   substantial consummation of a confirmed plan.” Id. § 1112(b)(4)(A), (M).
          During the show-cause hearing, Assadi, proceeding pro se, admitted
   that he had no personal bank account, that he was using one of his business’s
   bank accounts (opened and funded after filing his Chapter-11 petition) for

          *
            Pursuant to 5th Circuit Rule 47.5, the court has determined that this
   opinion should not be published and is not precedent except under the limited
   circumstances set forth in 5th Circuit Rule 47.5.4.

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Case: 21-50293     Document: 00516059859          Page: 3   Date Filed: 10/19/2021

                                   No. 21-50293

   personal expenses, and that he had unpaid pre-petition domestic support
   obligations. The bankruptcy judge also determined that Assadi had no
   consistent income and that Assadi’s only substantial assets were his real
   properties, to which he had bad title. The bankruptcy court found that,
   together, these facts reflected a high likelihood of a failed reorganization
   attempt. Therefore, the bankruptcy court did not abuse its discretion in
   finding that there was cause for conversion.
          We find all other arguments raised by Assadi to be meritless. The
   district court did not err in affirming the conversion of Assadi’s case from
   one under Chapter 11 to one under Chapter 7.
          The district court’s judgment is AFFIRMED.

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