15375 Memorial Corp. v. Bepco L.P.
Citation: 40 ELR 20010
No. Nos. 09-1391 et al., (3d Cir., 12/22/2009)
The Third Circuit affirmed a lower court order dismissing oil and gas exploration companies' bankruptcy petition for lack of good faith. The companies failed to show that their Chapter 11 bankruptcy petitions served valid bankruptcy purposes because the bankruptcies did not maximize the estates. Moreover, the timing of the filings, two months prior to a trial in which they faced substantial liability in a hazardous waste contamination case, shows that the bankruptcy petitions were filed primarily as a litigation tactic. Indeed, the bankruptcy court found that the contamination case was the "principal factor" in the decision to file for bankruptcy.