Filed: Feb. 22, 2005
Latest Update: Feb. 21, 2020
Summary: United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT February 22, 2005 _ Charles R. Fulbruge III No. 04-30489 Clerk Summary Calendar _ BALBIR SINGH TULI, Appellant, versus UNITED STATES TRUSTEE, Appellee. _ Appeal from the United States District Court for the Middle District of Louisiana, Baton Rouge District Court Cause No. 03-CV-533-A _ Before JONES, BARKSDALE and PRADO, Circuit Judges. PRADO, Circuit Judge.* Appellant Balbir Singh
Summary: United States Court of Appeals Fifth Circuit F I L E D IN THE UNITED STATES COURT OF APPEALS FOR THE FIFTH CIRCUIT February 22, 2005 _ Charles R. Fulbruge III No. 04-30489 Clerk Summary Calendar _ BALBIR SINGH TULI, Appellant, versus UNITED STATES TRUSTEE, Appellee. _ Appeal from the United States District Court for the Middle District of Louisiana, Baton Rouge District Court Cause No. 03-CV-533-A _ Before JONES, BARKSDALE and PRADO, Circuit Judges. PRADO, Circuit Judge.* Appellant Balbir Singh T..
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United States Court of Appeals
Fifth Circuit
F I L E D
IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT February 22, 2005
_____________________
Charles R. Fulbruge III
No. 04-30489 Clerk
Summary Calendar
_____________________
BALBIR SINGH TULI,
Appellant,
versus
UNITED STATES TRUSTEE,
Appellee.
_________________________________________________________________
Appeal from the United States District Court
for the Middle District of Louisiana, Baton Rouge
District Court Cause No. 03-CV-533-A
_________________________________________________________________
Before JONES, BARKSDALE and PRADO, Circuit Judges.
PRADO, Circuit Judge.*
Appellant Balbir Singh Tuli challenges the bankruptcy
court’s dismissal of his chapter 11 bankruptcy petition against
Consort Constructions, Ltd. (Consort). Tuli, the owner and sole
shareholder of Consort, as well as a putative creditor, initiated
an involuntary chapter 11 proceeding against Consort on September
20, 2002. On March 3, 2003, the United States Trustee filed a
motion asking the bankruptcy court to convert the involuntary
*
Pursuant to 5TH CIRCUIT RULE 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in 5TH CIRCUIT
RULE 47.5.4.
1
proceeding into a voluntary proceeding on the ground that Consort
had failed to retain counsel. In response, the bankruptcy court
issued an order requiring Tuli to show cause why the case should
not be dismissed for lack of sufficient creditors1 and why Tuli
should not be sanctioned for appearing both as a petitioning
creditor and as a representative of the debtor. Consort
responded by asking the bankruptcy court to appoint attorney
Barry Miller to represent it.
The bankruptcy court held two hearings on the Trustee’s and
Consort’s motions. After the hearings, the bankruptcy court
denied Consort’s motion to employ Miller as counsel based on a
conflict of interest and dismissed the case because Consort
lacked sufficient assets to reorganize. Tuli appealed the
dismissal order to the district court. The district court
affirmed the bankruptcy court’s order. Tuli now appeals to this
court.
Tuli argues that the bankruptcy court abused its discretion
in dismissing his petition. This court reviews the district
court’s decision sitting as an appellate court by applying the
same standards of review the district court applied to the
bankruptcy court.2 The district court reviews a bankruptcy
court’s decision to dismiss a chapter 11 bankruptcy case for
1
The petition listed only Tuli as a petitioning creditor.
2
See In re Jack/Wade Drilling, Inc.,
258 F.3d 385, 387 (5th
Cir. 2001).
2
abuse of discretion.3 Thus, this court reviews the dismissal of
Tuli’s petition for an abuse of discretion.
Section 1112 of the bankruptcy code permits the bankruptcy
court to dismiss a bankruptcy case for cause.4 Section 1112 sets
forth a nonexhaustive list of factors to assist the bankruptcy
court in determining when cause exists.5 Those factors include
the “diminution of the estate and absence of a reasonable
likelihood of rehabilitation” and an inability to effectuate a
reorganization plan.6
Here, the dismissal order does not specify the reasons for
dismissal. Instead, the order refers to the “oral reasons given
at the hearing held on April 11, 2003.” During that hearing and
a previous hearing, the bankruptcy court expressed its concerns
that Consort lacked sufficient assets to reorganize and that the
creditors’ claims were prescribed. The court observed that
Consort’s comparative balance sheet listed only two assets: a
claim of interest against an entity named “Alstom” and a
construction plant in Baghdad, Iraq. Notably, the schedule
listed no bank accounts, cash, real estate or any other property.
3
See In re Humble Place Joint Venture,
936 F.2d 814, 816
(5th Cir. 1991).
4
See 11 U.S.C. § 1112(b) (2004).
5
See
id. (using the term “including” before listing various
reasons for dismissing a case).
6
11 U.S.C. § 1112(b)(1)-(2).
3
The court also noted that the creditors’ claims against Consort
arose during the mid-1980s and predicted that those claims were
probably prescribed. The court questioned whether Consort had
any assets to pay its creditors.
Addressing these concerns, Tuli explained that Consort
sought construction contracts to provide assets for
reorganization and that Consort hoped to participate in the
rebuilding of Iraq at some future time. Tuli also stated,
however, that Consort’s claim against Alstom was assigned to him
and that the construction plant was held by customs in Iraq.
Tuli admitted that Consort had no other assets and no
construction projects at that time.
After hearing Tuli’s explanation, the bankruptcy court
determined that Consort lacked assets that could serve as a basis
for reorganization. The court determined that even if the claim
against Alstom was not prescribed, the claim now belonged to
Tuli, not Consort. The court also expressed concern that any
right Consort had to the construction plant in Iraq was highly
uncertain. The bankruptcy court recognized that no reasonable
likelihood existed that Consort could be reorganized. Based on
the evidence in the record, this determination was proper.
Although Tuli complains that the bankruptcy court erred because
it did not permit him to present his plan for reorganization,
presenting this plan would have been futile because Consort had
4
no assets. The bankruptcy court did not abuse its discretion.7
Having determined that the bankruptcy court did not err in
dismissing the petition, this court need not consider any
complaint Tuli has regarding the appointment of Barry Miller as
counsel for Consort. The court affirms the judgment of the
district court.
AFFIRMED.
7
See 11 U.S.C. § 1112(b)(1)-(2) (indicating that the absence
of a reasonable likelihood of rehabilitation and the inability to
effectuate a reorganization plan are proper reasons for
dismissing a bankruptcy case).
5