Based on the totality of the circumstances in this case, the first mortgage lender's amended claim, filed 50 months after the Trustee first began disbursing monthly mortgage payments to the lender under the Debtors' plan, is disallowed

The court sustained the Debtors' objections to the claims of the oversecured creditor, Carolina Farm Credit, ACA, which included 15% of the outstanding balance of the indebtedness owed by the Debtors on the petition date as attorneys' fees.  The court will  review all attorneys' fees in oversecured creditors' claims for reasonableness under the Fourth Circuit standards.

Cause exists to dismiss the Chapter 11 case pursuant to 11 U.S.C. § 1112(b) and no evidence was offered to support a finding that the appointment of a Chapter 11 trustee is in the best interest of creditors and the estate.

Alleged debtor was in an accident while driving the petitioning creditor’s vehicle, and petitioning creditor was injured and retained counsel. Petitioning creditor eventually obtained a default judgment and planned to file an involuntary petition to use a bankruptcy trustee to assert first-party non-assignable state law claims against insurers. Insurers provided alleged debtor with counsel to seek to set aside the default judgment, and the petitioning creditor obtained a writ of execution that went unsatisfied and immediately filed the petition. Alleged debtor responded to the petition, seeking dismissal of the case on several grounds, including bad faith. The court found the alleged debtor overcame the presumption that the involuntary petition was filed in good faith, and the case was dismissed. The court noted that the involuntary petition strategy itself raised serious questions of good faith; that the case was a two-party dispute and an improper attempt at debt collection; that it was abnormal to consider filing an involuntary petition prior to executing on a judgment; that petitioning creditor's counsel, both in state court and in bankruptcy, made misleading statements and took misleading actions that constituted questionable conduct, may have contributed to obtaining the default judgment, and raise ethics concerns; that the race to file the petition appeared to be an attempt to cut off alleged debtor's ability to seek review of the judgment; and that alleged debtor should be allowed to pursue his own state law claims and there is no wasting asset.