Issue link: https://mbozikis.ufcontent.com/i/1422521
187 the Bankruptcy Code provides for conversion or dismissal of a Chapter 11 case for "cause." Sixteen examples of what constitutes "cause" are set forth in Section 1112(b)(4), but "such lists are viewed as illustrative rather than exhaustive, and the Court should 'consider other factors as they arise.'" In re Gateway Access Solutions, Inc., 374 B.R. 556, 561 (Bankr. M.D. Pa. 2007). The 2005 Amendments amended the statutory language of Section 1112(b) from permissive to mandatory, limiting a court's discretion to refuse to dismiss a Chapter 11 case or to convert the case to Chapter 7 (whichever is in the best interests of creditors and the estate) once it finds that "cause" exists. The initial burden lies with the moving party to establish that "cause" exists for converting or dismissing a Chapter 11 case. Once cause is established, the burden then shifts to the debtor or another objecting party to prove that unusual circumstances exist such that the relief sought (i.e., conversion or dismissal of the case) would not be in the best interests of creditors and the estate. Although the Bankruptcy Code does not define "unusual circumstances" as used in Section 1112(b), "the phrase contemplates conditions that are not common in chapter 11 cases." In re New Towne Dev., LLC, 404 B.R. 140, 147 (Bankr. M.D. La. 2009). 3. Bad Faith Filings A Chapter 11 case can be dismissed for bad faith if it is clear that, on the petition date, "there was no reasonable likelihood that the debtor intended to reorganize and no reasonable probability that it would eventually emerge from bankruptcy proceedings." C- TC 9th Ave. P'Ship v. Norton Co. (In re C-TC 9th Ave. P'ship), 113 F.3d 1304, 1309 (2d Cir. 1997). No single factor is determinative of good faith, and courts "must examine the facts and circumstances of each case in light of several established guidelines or indicia, essentially conducting an 'on-the-spot evaluation of the Debtor's financial condition [and] motives.'" In re Kingston Square Assocs., 214 B.R. 713, 725 (Bankr. S.D.N.Y. 1997) (internal citation omitted). The following factors, however,