Bankruptcy has been defined as , “[referring] to statutes and judicial proceedings involving persons or businesses that cannot pay their debts and seek the assistance of the court…” (from www. id. uscourts. gov/terms-ab. htm) and as, “a legal proceeding which allows a debtor to discharge certain debts or obligations without paying the full amount or allows the debtor time to reorganize his financial affairs so he can fully repay his debts. ” (from www. tdsf. com/foregloss. htm).
In the case at hand, the petition for involuntary bankruptcy should not be granted.
First of all, the facts as stated do not show or reveal the incapacity of the debtors, mainly the three members of the partnership, from paying the said debts. What was clearly stated was that the partners had a disagreement, which may perhaps result in the dissolution of the partnership. However, such dissolution does not discharge the partnership from its debts, but rather still makes the partners liable for what ever debts they may still owe.
In addition, it has not been sufficiently shown and proven if the debtors have complied with the other requirements of the law to allow Chapter 7 Bankruptcy, such as the Mean’s Test, credit counseling, and debtor education requirements. Plan of Reorganization No, the bankruptcy court cannot confirm the plan of organization. First, the plan has clearly been rejected by the unsecured creditors as stated in the facts.
Under section 1129(a)(10) of the Bankruptcy Law, if there are impaired classes of claims, the court cannot confirm a plan unless it has been accepted by at least one class of non-insiders who hold impaired claims, similar to what is happening in this case to the unsecured creditors.
The facts have not sufficiently shown whether or not a sufficient number of creditors, that is, creditors that hold at least two-thirds in amount and more than one-half in number of the allowed claims in the class, have accepted the plan. It would be unfair for the unsecured creditors and may result in injustice if the plan was approved without their consent.
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