This page uses extracted PDF text. Text can misread numbers, dates or table columns. Check the PDF before quoting or interpreting it. Redacted areas remain redacted.
Case 25-23251-MEH Doc 50 Filed 01/07/26 Entered 01/07/26 15:54:27 Desc Main
Document Page 5 of 12
In re Seaview Apartments LLC
Case No. 25-23251 (MEH)
Section 1112(b)(4) provides a non-exhaustive list of grounds that constitute “cause” for
dismissal or conversion, including:
(A) substantial or continuing loss to or diminution of the estate and the absence of a
reasonable likelihood of rehabilitation; [and]
(B) gross mismanagement of the estate.
11 U.S.C. § 1112(b)(4); see also In re SGL Carbon Corp., 200 F.3d 154, 160 (3d Cir. 1999). For
instance, “[w]here the debtor has no cash flow and no source of income and where the claims
against the property of the debtor exceed the property’s value, a debtor has not demonstrated a
reasonable likelihood of rehabilitation and dismissal may be appropriate.” In re 865 Centennial
Ave. Assocs. Ltd. P’ship, 200 B.R. 800, 810 (Bankr. D.N.J. 1996) (citing In re Brown (First Jersey
National Bank v. Brown), 951 F.2d 564, 571 (3d Cir. 1991); see, e.g., In re Gateway Access Sols.,
Inc., 374 B.R. 556, 562 (Bankr. M.D. Pa. 2007); In re AIG Fin. Prods. Corp, 651 B.R. 463, 475
(Bankr. D. Del. 2023). In other words, the debtor must “do more than manifest unsubstantiated
hopes for a successful reorganization.” In re Gateway Access Sols., 374 B.R. at 562.
It is also a well-established principle that “Chapter 11 bankruptcy petitions are ‘subject to
dismissal under 11 U.S.C. § 1112(b) unless filed in good faith and the burden is on the bankruptcy
petitioner to establish [good faith].’” In re 15375 Mem’l Corp. v. Bepco, L.P., 589 F.3d 605, 618
(3d Cir. 2009) (quoting In re Integrated Telecom Express, Inc., 384 F.3d 108, 118 (3d Cir. 2004)).
“Whether the good faith requirement has been satisfied is a fact intensive inquiry in which the
court must examine the totality of facts and circumstances and determine where a petition falls
along the spectrum ranging from the clearly acceptable to the patently abusive.” Id. (quoting In re
Integrated Telecom Express, 384 F.3d at 118); see also In re SGL Carbon, 200 F.3d at 162. The
Third Circuit has recognized “two inquiries that are particularly relevant to the question of good
Page 5 of 12Jump to an indexed page (12 of 12)