CA1: never too rich to go bankrupt

In Re Capitol Food Corp, 06-2327. A corporate landlord sought to dismiss his corporate tenant’s chapter 11 petition, arguing that it wasn’t filed in good faith. The bankruptcy court held that 11 U.S.C. § 1112(b) contains no “good faith” requirement, and there was no “cause” for relief from the automatic stay. The First notes that there is a split regarding whether “good faith” is required, but concluded that the landlord didn’t even make out a case that the petition was filed in bad faith.  Apparently the best argument he had was the debtor was “Solvent.” But the First points out that there are many reasons that a debtor might seek bankruptcy protection, and then describes the economics of why other debtors might benefit.