TRADITIONAL CHAPTER 11 | CONVERSION FROM CHAPTER 7 | INSIDER CREDITOR’S PLAN | 2021–2023
Represented a real estate holding company in a Chapter 11 case (Case No. 21-30819) in the U.S. Bankruptcy Court for the Northern District of California. The case was originally filed under Chapter 7 on December 21, 2021 in the wake of an unfavorable state court judgment, but a Chapter 7 trajectory would have placed the debtor’s real estate portfolio and a related pension plan into the hands of a Chapter 7 trustee for liquidation. The firm pursued conversion under 11 U.S.C. § 706(b), and on November 10, 2022 the court entered an order converting the case from Chapter 7 to Chapter 11 — restoring the debtor to debtor-in-possession status and shifting the matter from a trustee-driven liquidation to a debtor-driven reorganization.
In a further departure from the typical Chapter 11 procedural arc, the firm coordinated with an insider creditor who filed and prosecuted the creditor’s own plan of reorganization rather than the firm advancing a debtor’s plan — a strategy permitted under 11 U.S.C. § 1121(c) once exclusivity has terminated, and one that can produce confirmation more efficiently when the insider’s interests are aligned with the debtor’s reorganization goals. The plan was confirmed on February 16, 2023, providing a 15.75% dividend to general unsecured creditors and allowing the principal to retain possession and control of both the real estate holding company and the related pension plan.
Result: Case converted from Chapter 7 to Chapter 11 (Nov. 10, 2022); insider creditor’s plan confirmed (Feb. 16, 2023) with 15.75% dividend to unsecured creditors; principal retained control of real estate holding company and related pension plan
U.S. Bankruptcy Court, Northern District of California, San Francisco Division
