Real America, Inc.

UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF OHIO
WESTERN DIVISION
In Re:
Real America, Inc.,
Debtor.
) 	Case No. 12-31142
)
) 	Chapter 11
)
)
) 	JUDGE MARY ANN WHIPPLE
ORDER GRANTING MOTION TO DISMISS
This case came before the court for hearing on June 11, 2012, on the Motion of the United States
Trustee to Dismiss [Doc. # 123], and Debtor’s response [Doc. # 127]. The UST seeks an order dismissing
the case for cause under 11 U.S.C. § 1112(b). Under § 1112(b), “cause” includes “substantial or continuing
loss to or diminution of the estate and the absence of a reasonable likelihood of rehabilitation.” 11 U.S.C.
§ 1112(b)(4)(A). This is the second motion to dismiss this case filed by the United States Trustee. The first
motion was filed less than two weeks after the case was commenced on March 15, 2012, and denied without
prejudice on April 6, 2012, after an evidentiary hearing held on April 2, 2012.
Also before the court at the June 11, 2012, hearing was Debtor’s motion for authority to use cash
collateral, which the court denied, finding that Debtor failed to show a reasonable probability that its
revenues will be sufficient such that the interest of Secured Creditor Citizens Bank (“Bank”) in its collateral
would be adequately protected. Debtor has no ability to reorganize or to operate without administrative
the record of the United States Bankruptcy Court for the Northern District of Ohio.
of this court the document set forth below. This document has been entered electronically in
The court incorporates by reference in this paragraph and adopts as the findings and orders
Dated: June 14 2012
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insolvency without authority to use the Bank’s cash collateral. 	To permit Debtor to continue to incur
expenses without authorization to use cash collateral and in the absence of a reasonable likelihood of
rehabilitation given the lack of authorized post-petition operating funding is resulting in a continuing loss
to the bankruptcy estate as summer resort operations proceed without any identified and authorized sources
of cash. 11 U.S.C. § 1112(b)(4)(A).
For example, UniTech, the Ohio-EPA required operator and consultant for the resort’s self-
contained water and sewer plant operations, 	remains under retention and continues to render ongoing
services to Debtor without any present basis to pay for its continued invoices. Likewise utilities are on and
persons engaged by Debtor to keep operations going are doing their jobs without a source of funds for
payment.
Under these time-critical circumstances given the limited seasonal nature of Debtor’s summer resort
operations on Middle Bass Island in Lake Erie, the lack of authorized post-petition funding is a material
impediment not only to continuing post-petition operations but to the reorganization plan process. The court
finds that there is not a reasonable likelihood that a plan will be confirmed within a reasonable time period.
Nor given the lack of critical operational funding were there extraordinary circumstances identified that
make dismissal a result that is not in the best interest of creditors. The motion was not opposed by any
creditor or party in interest besides Debtor.
The court notes that there is a pending receivership in Ohio state court initiated by the Bank that
included Debtor at case filing, as well as other non-debtor entities affiliated and having common ownership
with Debtor and with interests in certain aspects of resort operations. Judicial involvement and oversight
of ongoing Debtor-creditor disputes and Debtor’s business can return to and reside in state court, making
conversion to Chapter 7 as an alternative remedy to dismissal unnecessary and inappropriate relief in this
case.
For these reasons, and those otherwise stated by the court at the hearing,
IT IS ORDERED that the Motion of the United States Trustee to Dismiss [Doc. # 123] be, and
hereby is, GRANTED.1
1The court orally stated its decision to grant the United States Trustee’s motion to dismiss this case on the record at the
conclusion of the hearing on June 11. At the same time, the court also orally stated on the record its decision to deny Debtor’s
motion to use cash collateral. Before the written orders memorializing the court’s two oral orders from the June 11 hearing could
be formalized and entered of record on the case docket, Debtor filed on June 13, 2012, a document called Notice of Newly
Discovered Facts Pertaining to Debtor’s Budget for Use of Cash Collateral (“Notice”). [Doc. # 135]. The Notice asks the court
to consider a proposed factoring agreement for the disputed Association receivable “prior to ruling on the matters before the court
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on June 11, 2012.” But the court has already ruled on those motions notwithstanding that the confirming written orders have not
yet been entered of record. The evidentiary record on them is closed. The Notice is not the proper procedural context to bring
forward the stated facts. The Notice and its contents are therefore being disregarded by the court in memorializing its oral rulings
of June 11, 2012.
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