Most bankruptcy cases are commenced by the filing of a “voluntary” bankruptcy petition by the debtor. In fact, as we have reported previously, today the bankruptcy process is dominated by prearranged restructurings involving advance planning and negotiations with potential purchasers and stakeholders that result in the business aspects of the bankruptcy process being substantially finalized at the time of the filing. That being said, the bankruptcy code provides that, under certain circumstances, a creditor can commence an involuntary bankruptcy case against a debtor, and if the debtor consents or the Bankruptcy Court determines the requirements have been satisfied, an order for relief is entered and the bankruptcy case proceeds with administration.

In a recent decision issued by the U.S. Bankruptcy Court by the District of Nevada in In re EB Holdings II, Case No. 17-12642-MKN (Bankr. D. NV., Dec. 15, 2017), the court reviewed the debtor’s request to dismiss an involuntary petition filed against it, or in the alternative, to suspend the matter until pending state court actions were adjudicated.

The State Court Litigation Between Debtor and Lenders

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