Bankr. No. 01-40853, Chapter 11.United States Bankruptcy Court, D. South Dakota.
April 8, 2002
IRVIN N. HOYT, U.S. Bankruptcy Judge.
The matter before the Court is the United States Trustee’s Motion to Dismiss and Debtor’s response. This is a core proceeding under 28 U.S.C. § 157(b)(2). This letter decision and accompanying Order shall constitute the Court’s interim findings and conclusions under Fed.Rs.Bankr.P. 7052 and 9014. As set forth below, the Court will not dismiss this case if Debtor timely gets a modified plan confirmed.
Facts. The facts of this case have been set forth in the Court’s Decision: Confirmation of Plan that was entered today.
Discussion. The United States Trustee’s office filed a motion to dismiss on February 7, 2002, because Debtor had not filed all required monthly reports, because Debtor was behind on quarterly fees payments, and because it did not appear that Debtor could propose a feasible plan. Assistant United States Trustee Bruce J. Gering reported at the hearing on March 20, 2002, that Debtor was now current on its monthly reports and quarterly fees. That left the issue of whether Debtor is able to propose a feasible plan.
The present record certainly casts doubt on whether Debtor can propose a confirmable plan. As discussed in the Court’s Decision Re: Confirmation of Plan, Debtor’s January 3, 2002, plan was not confirmable because there was insufficient evidence that Debtor and J.Y., Inc., had adequate combined net income to take Debtor out of the red each month and also to make Debtor’s plan payments. Debtor, however, touted that Debtor’s principals, Yoon Yap and Fong Peng Yap had sufficient wealth to make Debtor’s payments. If that personal wealth exists, and if they are serious about insuring that Debtor survives, they can infuse cash immediately and reduce the amount of the Bank’s debt that needs to be paid through the plan. Or, the Yaps perhaps can identify equity in their assets and pledge those to the Bank to insure payment.
Because the possibility of Debtor confirming a feasible plan is not without reason in this case, the United States Trustee’s motion to dismiss will not be granted at this time. Instead, Debtor will be given a short time to formulate a second modified plan that is feasible. Should that effort fail, then the case will be dismissed.
If a second modified plan comes before the Court for confirmation and if this plan also proposes guarantees by the Yaps and J.Y., Inc., then the 2001 federal income tax returns for the Yaps and J.Y., Inc., as well as for Debtor, should be put into evidence. Without them, a significant void will exist in Debtor’s financial picture that other evidence may not be able to fill.
An appropriate order will be entered.