Marrama V. Citizens Bank of Massachusetts - Decision - Opinion of The Court

Opinion of The Court

Justice Stevens wrote the opinion for the Court. Agreeing with the First Circuit's opinion, the Court held that there is a bad faith exception to the right to convert from Chapter 7 to Chapter 11. According to the Court, "a Chapter 13 proceeding may be either dismissed or converted to a Chapter 7 proceeding 'for cause' and includes a nonexclusive list of 10 causes justifying that relief. None of the specified causes mentions prepetition bad-faith conduct.... Bankruptcy courts nevertheless routinely treat dismissal for prepetition bad-faith conduct as implicitly authorized by the words 'for cause.'"

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