Credit Union Liquidity Servs. v. Green Hills Dev. Co.

CULS appealed the dismissal of its petition for involuntary bankruptcy filed against Green Hills under 11 U.S.C. 303. Congress has made clear that a claimholder did not have standing to file an involuntary petition if there was a bona fide dispute as to liability or amount of the claim. The court affirmed the bankruptcy court's dismissal on the alternative ground that CULS lacked standing to bring the involuntary petition where CULS' claim was subject to a bona fide dispute. The court denied Green Hills' motion for sanctioning CULS for filing a frivolous appeal and concluded that sanctions were not appropriate in this case where CULS' contentions, while not ultimately meritorious, were not entirely unreasonable. Accordingly, the court affirmed the bankruptcy court's dismissal, granted CULS' motion for judicial notice of an order denying in part another motion by CULS for summary judgment, and denied Green Hills' motion for sanctions. View "Credit Union Liquidity Servs. v. Green Hills Dev. Co." on Justia Law