Financial Distress/Good Faith

This panel discusses the diverging good-faith and bad-faith standards governing dismissal of bankruptcy petitions under § 1112(b)’s “for cause” provision, including for an alleged lack of financial distress in the wake of the Third Circuit’s LTL decision in 2023. The panelists also will discuss post­-LTL efforts to impose a similar standard in the Fourth Circuit in the Bestwall and Aldrich & Murray cases, which thus far have been unsuccessful.