Mr K’s Bankruptcy Saga Continues

Posted: July 26, 2012 in Business, Legal
Tags: , , , ,

Perhaps Mr. K should employ Keyrock, the Caveman Attorney…

We’re no legal scholars here at Mistakably Premier.  Legal concepts of motions, notices, and certificate of service frighten and confuse us.  But what we do know, is that things aren’t going so well in the Chapter 11 bankruptcy case of 7972 Ridge Road LLC.  According to court documents, Daniel M. McDermott, the United States Trustee for Region 9, has filed a motion to “convert or dismiss” the case.  Not knowing exactly what that means, we did some research on the matter.  Here’s what we found…

According to the website www.cacb.uscourts.gov, the court can request the case be converted or dismissed “if a debtor is not complying with bankruptcy requirements.”

So why has Daniel M. McDermott asked for a conversion or dismissal?  Apparently it has to do with a July 19th evidentiary hearing where “The Court entered orders from the bench denying the Debtor’s use of cash collateral, denying its motion for turnover, and granting PNC relief from the automatic stay.”  In other words:

PNC – 3, Mr. K – 0

The motion further lists a number of factors, including:

  • Absence of a Reasonable Likelihood of Rehabilitation

It is believed by the court that “without any assets in its control, the Debtor lacks a reasonable likelihood of rehabilitation.”  Ouch!

  • Dismissal in Creditors’ (in this case, PNC) Best Interest

“Because the Debtor lacks unencumbered assets,” asserts the motion, “dismissal is in the best interest of creditors.”  Double Ouch!

Dismissal has Serious Consequences

So, now what?  The motion is set for a hearing on August 14th, so we’ll see which way the court rules.  If we were betting folk, we’d place money against 7972 Ridge Road.  If the case breaks that way, what can Mr. K expect?  The www.cacb.uscourts.gov site further states:

If a bankruptcy case is dismissed at the request of a trustee or creditor, or by the court on its own motion, the debtor may be prohibited from filing another bankruptcy case for 180 days [Bankruptcy Code Section 109(g)] or be required to file a motion to obtain permission to file another bankruptcy case (Bankruptcy Code Section 349).

In other words, Mr. K will find it hard to hide behind bankruptcy law…

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Comments
    • Ryan says:

      Annie – thanks for the heads up – looks like we scooped them by a few days! Thing is, the Gazette’s article claims UPH is the business – not sure that’s correct, but I’ll reach out to the reporter to find out!

    • Ryan says:

      Annie – just heard back from Michelle Sprehe, reporter. Here’s what she had to say:

      “It looks like things got changed around after going through the copy editors. When I submitted the story, it read, ‘Wadsworth resident Stephen Kovack filed for Chapter 11 bankruptcy in June for his business, 7972 Ridge Road LLC, which owns a building that houses Kovack’s homebuilding firm, Unmistakably Premier Homes.'”

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