Court Denies Creditor’s Motion to Dismiss Chapter 11 Case Despite Multiple Factors in Favor of Dismissal

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In a recent case out of the bankruptcy court for the Southern District of Florida (the “Court”), a secured creditor moved to dismiss a debtor’s bankruptcy case “for cause” based on the debtor’s bad faith filing. The debtor owned certain commercial real estate in south Florida (the “Commercial Property”) and leased space to various tenants, one of which had recently applied for both state and federal licenses to sell medical marijuana. The secured creditor had a first-position mortgage on the Commercial Property. After a decade-long lending relationship soured, the debtor initiated a lender liability action against the secured creditor in state court.5 The secured creditor subsequently filed three state court actions against the debtor including, inter alia, an action to foreclosure its mortgage on the Commercial Property (the “Foreclosure Action”).

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