New opinion — bad faith a basis for dismissal of involuntary bankruptcy petition

In re: Forever Green — bankruptcy — affirmance — Fuentes

Creditors can initiate involuntary proceedings against a debtor. Today, the Third Circuit held that a creditor’s bad faith provides independent grounds for dismissing an involuntary petition. The court adopted a totality-of-the-circumstances for assessing bad faith and held that the district court’s bad-faith finding was not an abuse of discretion.

Joining Fuentes were Nygaard and Roth. Arguing counsel were Aris Karalis for the debtor and Steven Eisenberg for the creditors.