U.S. Trustee moves to dismiss Fountain Chapter 11 case
February 6, 2012
Filed under News
WEST PALM BEACH, Fla. – A U.S. Trustee has filed a motion to dismiss the Chapter 11 bankruptcy case filed by American Marine Holdings LLC or appoint a Chapter 11 trustee for the company, according to court documents filed last week.
U.S. Trustee Donald Walton said in the petition the company’s receiver, GlassRatner, did not have the authority to file for Chapter 11 and therefore the cases should be dismissed. Walton contends that since GlassRatner was appointed on a temporary basis, it does not have the legal authority to file for a Chapter 11 bankruptcy.
In court documents, Walton says Ronald Glass and GlassRatner were receivers or “custodians” of American Marine Holdings whose responsibility was to “maintain the status quo of the case pending a final determination of the receivership issue.” He says the move to file for Chapter 11 would create a “race to the courthouse.”
“Each plaintiff group will want their selected receiver to manage the bankruptcy case, and that receiver might be beholden to that constituency. Bankruptcy policy eschews races to the courthouse that allow one creditor to impede others solely by acting quickly,” Walton said in the filing.
Walton said in the documents that a Chapter 11 trustee appointed by the court would prevent “manipulation of the system and assure that the estate fiduciary represents the interests of all creditors.”
An evidentiary hearing has been set for Feb. 21 to discuss the evidence put forth by the U.S. Trustee.
The US Trustee withdrew his motion to dismiss and tried to strike a deal with the filer of these 10 bankruptcy cases, Ronald L. Glass and GlassRatner Advisory & Capital Group (collectively referred to by the NC Court as “Temporary Receiver”. Joseph G. Wortley, as an interested party, filed his own Motion to Dismiss, alleging that Glass did not have the legal authority to file the 10 Chapter 11 petitions. US Bankruptcy Judge Eric P. Kimball (Southern District of Florida, West Palm Beach Division) agreed with Mr. Wortley’s motion and dismissed the 10 Chapter 11 bankruptcy cases. I represented Mr. Wortley.
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