  |
  |
  |
    
  
   |
 | |||
|
|
|
|
| |||
the Code, the court held that these sections simply did not apply to chapter 11 debtors. Said the court: "subchapter IV of chapter 7 of the Bankruptcy Code cannot apply to the Chapter 11 Debtors' cases unless (1) the cases of the Chapter 11 Debtors are converted to cases under chapter 7 and (2) the Chapter 11 Debtors are 'commodity broker'" as defined by the Bankruptcy Code, the CEA, or Part 190." The court found that conversion to chapter 7 was not warranted here-as the group had failed to allege any facts establishing cause-and thus the customer group's request for administration under section 761-767 was denied. The court further noted that even if the court were to convert the cases to chapter 7, the customer group here had failed to establish that the debtors were commodities brokers as defined by section 101(6) of the Code, thus further precluding application of sections 761-767 to these debtors. Finally, regarding the request to conduct Rule 2004 examinations, the court concluded: "[n]umerous government agencies as well as the SIPA Trustee and the Chapter 11 Trustee are actively investigating the circumstances surrounding the collapse of MFGI and MFGH. Permitting private-party discovery at this time, either under Rule 2004 or the discovery rules applicable to contested matters, is unnecessary and would hinder the ongoing investigations." The court denied all relief requested by the customer group.
i. In re Pediatrics at Whitlock, P.C., 507 B.R. 10 (Bankr. N.D. Ga. 2014).
Issue: Chapter 11 debtor, as operator of outpatient pediatric facility, moved for determination that appointment of patient care ombudsman was not necessary.
Holding: In deciding whether appointment of patient care ombudsman is necessary for protection of patients of bankrupt health care provider, bankruptcy courts consider the following non-exclusive factors: (1) cause of debtor's bankruptcy filing, and whether it is something other than deficiencies, or alleged deficiencies, in patient care; (2) presence and role of licensing or supervising entities; (3) debtor's past history of patient care; (4) ability of patients to protect their rights; (5) level of dependency of patients on debtor's facility; (6) likelihood of tension between interests of patients and debtor; (7) potential injury to patients if debtor drastically reduced its level of patient care; (8) presence and sufficiency of internal safeguards to ensure appropriate level of care; and (9) impact of cost of ombudsman on likelihood of successful reorganization. Court held that appointment of patient care ombudsman was not necessary under facts of case for protection of patients of bankrupt health care provider.
ii. In re Smiley Dental Arlington, PLLC, 503 B.R. 680 (Bankr. N.D. Tex. 2013)
Issue: Whether a patient care ombudsman should be appointed in the jointly administered Chapter 11 cases of debtors.
Holdings: The Bankruptcy Court, D. Michael Lynn, J., held that:
©2014 William L. Norton III
