August 15, 2012
The Ninth Circuit Bankruptcy Appellate Panel (B.A.P.) issued a published opinion, Levesque v. Shapiro (In re Levesque), 2012 Bankr. LEXIS 2970 (B.A.P. 9th Cir. 2012) on June 25, 2012, affirming the Bankruptcy Court's holding that granted debtors' motion to reopen and denied debtors' motion to convert to chapter 11. The B.A.P. in Levesque held that a Chapter 7 trustee has standing to appear and be heard on a motion to reopen. The B.A.P. opined that no other party is in a better position than a Chapter 7 trustee to advise the court of a debtor's case history and administration of assets. Further, the B.A.P. affirmed the lower court's denial of debtors' motion to convert based on the Supreme Court's ruling in Marrama v. Citizens Bank of Mass., 549 U.S. 365 (2007). The B.A.P. supported the lower court's application of Marrama for conversion of Chapter 7 to Chapter 11, holding that a debtor does not have an absolute right to convert to one of the reorganization chapters. To see the full opinion, please click here.