In re: Georges Marciano, et al v. Steven Chapnick, et al, No. 11-60070 (9th Cir. 2013)Annotate this Case
In this appeal, appellant principally argued that, because the judgments obtained by the Petitioning Creditors were on appeal when the involuntary petition was filed, the bankruptcy court should have dismissed the petition as not meeting the requirements of section 303(b)(1) of the Bankruptcy Code. First, the court held that the bankruptcy court did not err in denying appellant's motion to dismiss for defective service of process. The court then held that an unstayed non-default state judgment was not subject to bona fide dispute for purposes of section 303(b)(1). Therefore, the bankruptcy court did not err in finding that the Petitioning Creditors held claims meeting the requirements of section 303(b)(1). Finally, the bankruptcy court did not abuse its discretion in concluding that further discovery would have been unlikely to produce any evidence material to the pending summary judgment motions. Accordingly, the court affirmed the judgment.