M&H Junior, Inc.

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UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
LOS ANGELES DIVISION
In re
M&H Junior, Inc.,
Debtor.
Case No. 2:14-bk-17039-RK
Chapter 7
ORDER GRANTING IN PART AND
DENYING IN PART CREDITOR HULEN
MALL, LLC’S MOTION TO DISMISS THE
CHAPTER 7 BANKRUPTCY CASE
Creditor Hulen Mall, LLC, (“Movant”) filed a Motion for Order Dismissing Chapter 7
Bankruptcy Case (“Motion”) on December 23, 2015. ECF 25. No opposition to the Motion
has been filed. Movant seeks dismissal with prejudice based on two grounds: (1) Debtor
M&H Junior, Inc., (“Debtor”) is a dissolved corporation and is therefore ineligible for
bankruptcy relief, and (2) this bankruptcy is a two party dispute between Movant and
Debtor.
The court will grant the Motion for the reasons stated in the moving papers and for
lack of timely written opposition, which may be deemed consent to the granting of the
FILED & ENTERED
JAN 12 2015
CLERK U.S. BANKRUPTCY COURT
Central District of California
BY DEPUTY CLERK	bakchell
Case 2:14-bk-17039-RK Doc 32 Filed 01/12/15 Entered 01/12/15 14:02:52 Desc
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motion pursuant to Local Bankruptcy Rule 9013-1(h). The court does not, however, grant
dismissal with prejudice for the reasons given below.
“Dismissal with prejudice is limited to ‘extreme situations,’ and should only be
ordered after (1) advance notice that dismissal with prejudice is at issue; (2) a separate
evidentiary hearing on the issue of whether the case should be dismissed with prejudice
(at which time, alternatives to dismissal with prejudice can be considered); and (3) an
explicit court determination that dismissal with prejudice is the proper remedy under the
circumstances.” March, Ahart and Shapiro, Rutter Group California Practice Guide:
Bankruptcy, ¶ 5:2512 (online ed. 2014), citing In re Ellsworth, 455 B.R. 904, 922 (9th Cir.
BAP 2011).
Although Movant argues that this is a “two-party dispute” and that Debtor filed this
bankruptcy “to delay and frustrate” Movant in Movant’s attempt to enter and enforce a
monetary judgment against Debtor and its principal, Movant has not met the high bar
required for dismissal with prejudice. Movant has produced evidence that Debtor is a
dissolved corporation under relevant state law – Texas, as the state of incorporation.
See Request for Judicial Notice, ECF 28, Exhibits 1-3. Movant has also produced
evidence that Movant and Debtor are currently engaged in litigation in Texas state court.
Id., Exhibits 4-9. These factors of corporate dissolution and pendency of litigation
between the parties do not by themselves show an “extreme situation” to dismiss the
case with prejudice. Given the Ninth Circuit Bankruptcy Appellate Panel’s
acknowledgement that dismissal with prejudice is limited to “extreme situations,” the court
grants the motion for dismissal without prejudice rather than with prejudice because the
evidence before the court does not show that the circumstances here warrant dismissal
with prejudice.
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For the reasons stated above, IT IS HEREBY ORDERED that the Motion is
granted in part and denied in part and that the bankruptcy case is DISMISSED WITHOUT
PREJUDICE.
The hearing on the Motion to Dismiss currently set for January 13, 2015 at 2:30
p.m. is hereby vacated.
###
Date: January 12, 2015
Case 2:14-bk-17039-RK Doc 32 Filed 01/12/15 Entered 01/12/15 14:02:52 Desc
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