In re Smith Avenue Contractors, Inc.

59 B.R. 137, 1986 Bankr. LEXIS 6457

• Court: United States Bankruptcy Court, D. New Jersey
• Decided: March 20, 1986
• Docket: Bankruptcy No. 86-00697
• Status: Published

Opinion

OPINION and ORDER

D. JOSEPH DeVITO, Bankruptcy Judge.

This matter deals with an order to show cause why an interim trustee should not be appointed. Upon reviewing the proceeding, the application is dismissed without prejudice.

The ratio decidendi herein is straightforward. The moving parties filed this involuntary petition pursuant to 11 U.S.C. § 303[b][2], which holds that a petition may be filed against the debtor where there are fewer than twelve creditors. The moving papers indicate the movants’ belief that there were, indeed, less than twelve creditors.

At the hearing, however, counsel for the movants freely admitted in at least two instances that more than twelve creditors existed. In such event, this Court must be guided by 11 U.S.C. § 303[b][1], which demands that three creditors join in an involuntary petition where there is an aggregate of twelve or more creditors.

The law being crystal clear on this subject, the Court must dismiss the petition but does give leave to refile. The Court is of the further opinion that its decision today is the more equitable alternative. The tenor of the pleadings indicates that this is a hotly contested dispute among family members. In the interests of justice and fair play, the joinder in a new involuntary filing by unrelated creditors would undoubtedly present a more balanced and detached perspective than the litigants here, who are so deeply personally involved.

Accordingly, this Court hereby ORDERS that the involuntary petition filed against the alleged debtor is dismissed, with leave to refile.