In re Marill Alarm Systems, Inc.

100 B.R. 606, 1989 Bankr. LEXIS 882

Opinion

ORDER DENYING CONVERSION UNDER 11 U.S.C. § 1112(a)

SIDNEY M. WEAVER, Bankruptcy Judge.

THIS MATTER came before the Court on May 3, 1989 upon a notice of conversion filed by the above named debtors, pursuant to 11 U.S.C. § 1112(a), to convert a confirmed chapter 11 case to a chapter 7 case.

The debtors filed for relief under Chapter 11 of the United States Bankruptcy Code in September, 1985 and a plan of reorganization was later confirmed in May, 1987. The debtors now seek to convert this chapter 11 case to a chapter 7 case under 11 U.S.C. § 1112(a).

Under 11 U.S.C. § 1112(a) a debtor has an absolute right to convert a case under chapter 11 to a case under chapter 7 “unless (1) the debtor is not a debtor in possession.” Accordingly, in order to qualify for the right to convert under § 1112(a) the debtor must be a debtor in possession. In re Grinstead, 75 B.R. 2, 3 (Bankr.D.Minn. 1985). The Court finds, however, that once a plan of reorganization is confirmed the debtor loses its status as a debtor in possession and is therefore no longer entitled to an automatic conversion under § 1112(a). See Alabama Fuel Sales Company, Inc., v. Newpark Resources, Inc. ( In re Alabama Fuel Sales Co., Inc.), 45 B.R. 365 (D.N.D.Ala.1985); In re Grinstead, 75 B.R. 2 (Bankr.D.Minn.1985); In re Pero Brothers Farms, Inc., 91 B.R. 1000 (Bankr.S.D.Fla.1988).

Based upon the foregoing, it is hereby:

ORDERED AND ADJUDGED that the debtors attempt to convert a chapter 11 case to a chapter 7 case post-confirmation conversion is denied under 11 U.S.C. § 1112(a).

DONE AND ORDERED.