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consideration of the debtor's business practices or actions in the case.39 Whichever standard is adopted, however, courts generally treat the confirmation good faith requirement as distinct and very different from the judicially-created good faith qualification for filing a Chapter 11 petition, which requires an examination of all of the facts and circumstances and depends upon an amalgam of factors none of which is dispositive.40
Addressing a frequent issue in single asset cases, the Seventh Circuit held that a motive to avoid adverse tax consequences, by legal means, is not bad faith.41 The Ninth Circuit has held that proposing a plan for the sole purpose of curing a default in order to avoid default interest is not in bad faith.42
The Code also precludes confirmation if the plan is proposed "by any means forbidden by law." § 1129(a)(3). The reference to law generally is broader than the parallel provisions of the Bankruptcy Act, which precluded confirmation if the proposal and acceptance were "made or procured by means or promises forbidden by this Act." Act §§ 221(3), 366(4) and 472(4). The legislative history does not make clear the intent of this expanded scope. It may have been intended to refer to the bankruptcy crimes provisions of Title 18 of the United States Code, which make it a felony for anyone knowingly and fraudulently to give, offer, receive or attempt to obtain any money or property, remuneration, compensation, reward, advantage or promise thereof for acting or forbearing to act in a bankruptcy case. 18 U.S.C. § 152. Such an intended reference would make sense because it
1983)(Chapter 13 case construing the good faith requirement of 11 U.S.C. § 1325(3). See also In re McCormick, 49 F.3d 1524 (11th Cir. 1995)("The focus of a court's inquiry is the plan itself, and courts must look to the totality of the circumstances surrounding the plan."); In re University Creek Plaza, Ltd.., 176 B.R. 1011 (S.D. Fla. 1995)(upholds finding of bad faith based, inter alia, on debtor's "fabrication" of "trade vendor claims by intentionally withholding a single month's payment, and treatment of insiders that "look and smell like self-dealing").
39
E.g., In re Jersey City Medical Center, 817 F.2d 1055 (3d Cir. 1987)(chapter 9 case).
40
See, e.g., In re Nursery Land Development, Inc., 91 F.3d 1414 (10th Cir. 1996); In re Trident Assocs. Limited Partnership, 52 F.3d 127, 132 (6th Cir. 1995); In re Phoenix Piccadilly, Ltd., 849 F.2d 1393 (11th Cir. 1988); In re Arnold, 806 F.2d 937, 939 (9th Cir. 1986); In re Little Creek Development Co., 779 F.2d 1068 (5th Cir. 1986); In re Albany Partners, Ltd., 749 F.2d 670 (11th Cir. 1984); In re Thirtieth Place, Inc., 30 B.R. 503 (9th Cir. BAP 1983); In re Madison Hotel Associates, 749 F.2d 410, 425 (7th Cir. 1984); In re Stolrow's, Inc., 84 B.R. 167, 171 (9th Cir. BAP 1988). See generally Ordin, "The Good Faith Principle in the Bankruptcy Code: A Case Study," 38 BUS. L. 1795 (1983); Smith & Haines, "Good Faith," 1988 ANN SURV BANKR L 498-509 (Callaghan 1988).
41 In re 203 North LaSalle Street Partnership, 126 F.3d 955 (7th Cir. 1997), rev'd on other grounds, 119 S. Ct. 1411 (1999); accord, In re Lafayette Hotel Partnership, 227 B.R. 445 (S.D.N.Y. 1998).
42
Platinum Capital, Inc. v. Sylmar Plaza, L.P. (In re Sylmar Plaza, L.P.), 314 F.3d 1070 (9th Cir.
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