In re Cricker, L84-50.
Decision Date | 29 January 1985 |
Docket Number | No. L84-50.,L84-50. |
Citation | 46 BR 229 |
Parties | In re William Oliver CRICKER, Debtor/Appellant. In re EAGLE MANUFACTURING INDUSTRIES, INC., Debtor/Appellant. In re EAGLE DEVELOPMENTS, INC., Debtor/Appellant. |
Court | U.S. District Court — Northern District of Indiana |
Gary L. Hostetler, Indianapolis, Ind., for debtor.
This case is an appeal from an Order entered January 9, 1984 by the United States Bankruptcy Court, Northern District of Indiana, Hammond Division at Lafayette, dismissing debtors' petition under Chapter 11 of the Bankruptcy Code. The issue on this appeal is whether the Bankruptcy Court can sua sponte dismiss a Chapter 11 proceeding.
Federal Rule of Bankruptcy Procedure 8013 governs the district court's authority to review the decision of the bankruptcy court. That rule provides that the district court is bound to accept the bankruptcy court's findings of fact unless they are clearly erroneous. However, this court is not so restricted in reviewing the bankruptcy court's interpretations of law. Matter of Evanston Motor Co., Inc., 735 F.2d 1029 (7th Cir.1984); see, e.g., In the matter of Neis, 723 F.2d 584 (7th Cir.1983); Fed.R.Bankr.P. 8013. The issue raised on this appeal does not challenge the bankruptcy court's findings of fact but rather its interpretation of law. Accordingly, this court must independently determine the accuracy of the legal conclusions adopted by the bankruptcy judge on the basis of the facts shown. In re Pickus, 26 B.R. 171, 173 (D.C.Conn.1982).
The facts of this case reveal the following. On November 17, 1983, the debtors filed a petition under Chapter 11, Title 11 of the United States Code. On November 28, 1983, the Bankruptcy Court sua sponte scheduled a hearing for December 9, 1983 as to why the proceeding should not be dismissed. At that hearing, no evidence was presented but counsel were given an opportunity to present their positions. From the transcript, it appears that a prior Chapter 11 petition on behalf of the debtors had been filed and the debtors had continued to operate their business for about 18 months. The Bankruptcy Court then converted that proceeding to one under Chapter 7 and the debtors requested the petition be dismissed, which it was. Debtors then filed another petition under Chapter 11 for the purpose of having the court oversee an orderly liquidation. The dismissal of that petition is the basis of the present appeal.
Under the Bankruptcy Reform Act of 1978, the dismissal or conversion of a case under Chapter 11 is governed by 11 U.S.C. § 1112. Section 1112(b) provides:
In deciding this case, the court must determine whether the language "on request of a party in...
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