In Re Marks, 174 B.R. 37 (E.D. Pa. 1994). · Go Syfert
In Re Marks, 174 B.R. 37 (E.D. Pa. 1994). Cases Citing This Book View Copy Cite
“most instances of dismissal for bad faith filing under 707(a) involve ... unexplained transfers to place assets beyond the reach of creditors.”
64 citation events (29 in the last 25 years) across 19 distinct courts.
Strongest positive: In re Woody (ncmb, 2017-12-08) · Strongest negative: In Re Lilley (paed, 1995-08-21)
Treatment trajectory · 1995 → 2026 · click a year to view as-of
1995 2010 2026
Top citers, strongest first. 28 distinct citers.
discussed Cited "but see" In Re Lilley
E.D. Pa. · 1995 · signal: but see · confidence high
Assoc., 85 B.R. 298, 308 (Bankr.E.D.Pa.1988) (doubting good faith filing requirement in Chapter 11 proceeding); Cf. In re Latimer, 82 B.R. 354, 363, 364 (Bankr.E.D.Pa.1988) (similar doubt as to Chapter 7 cases); But see In re Marks, 174 B.R. 37, 40-41 (Bankr.E.D.Pa.1994) and In re Bingham, 68 B.R. 933, 935 (Bankr.M.D.Pa.1987) (finding good faith filing requirement in Chapter 7 cases).
cited Cited "but see" Lilley v. United States (In Re Lilley)
Bankr. E.D. Pa. · 1995 · signal: but see · confidence high
But see In re Marks, 174 B.R. 37, 40-41 (E.D.Pa.1994) (good faith fifing requirement in Chapter 7 cases is recognized, although a denial of dismissal on that ground is affirmed).
discussed Cited as authority (verbatim quote) In re Woody
Bankr. M.D.N.C. · 2017 · quote attribution · 1 verbatim quote · confidence high
most instances of dismissal for bad faith filing under 707(a) involve ... unexplained transfers to place assets beyond the reach of creditors.
discussed Cited as authority (rule) William T. Cupples and Melinda A. Cupples
Bankr. D. Del. · 2024 · confidence medium
While § 1307 does not explicitly list a good faith requirement, the Third Circuit Court of Appeals has consistently held that a bankruptcy filing may be dismissed “for cause” under 11 U.S.C. § 1307 (c) if it is not made in good faith.4 The determination of bad faith is a fact intensive inquiry.5 “Once a party calls into question a petitioner’s good faith, the burden shifts to the petitioner to prove his good faith.”6 “Although the Code does not define ‘good faith,’ courts in this circuit have uniformly held that ‘[a]t the very least, good faith requires a showing of honest …
cited Cited as authority (rule) Laura L. Reppert
Bankr. W.D. Pa. · 2022 · confidence medium
Pa. 2014); In re Marks, 174 B.R. 37, 40 (E.D.
discussed Cited as authority (rule) Kevin S. Moser
Bankr. W.D. Pa. · 2021 · confidence medium
Adding, that “[a]lthough the Code does not define ‘good faith,’ courts in this circuit have uniformly held that ‘[a]t the very least, good faith requires a showing of honest intention.’ ” See id. (quoting In re Marks, 174 B.R. 37, 40 (E.D.
cited Cited as authority (rule) In re Iredia
Bankr. E.D. Pa. · 2016 · confidence medium
Id. at 207 (citing In re Marks, 174 B.R. 37, 40 (E.D.Pa.1994)).
discussed Cited as authority (rule) In re Crest by the Sea, LLC
Bankr. D.N.J. · 2014 · confidence medium
The decision to dismiss a Chapter 7 case “for lack of good faith rests within the sound discretion of the bankruptcy court,” id. (citing Zick, 931 F.2d at 1129), and the bankruptcy court can consider such factors such as whether “the petitioner has abused the provisions, purpose, or spirit of bankruptcy law.” Id. (citing In re Marks, 174 B.R. 37, 40 (E.D.Pa.1994)).
cited Cited as authority (rule) In re Hunt
Bankr. M.D. Penn. · 2014 · confidence medium
In re Marks, 174 B.R. 37, 39 (E.D.Pa.1994).
cited Cited as authority (rule) In re Snyder
Bankr. D.N.M. · 2014 · confidence medium
In In re Marks, 174 B.R. 37, 41 (E.D.Penn.1994), the district court so held, citing S.Rep.
discussed Cited as authority (rule) In Re Glunk (2×) also: Cited "see, e.g."
Bankr. E.D. Pa. · 2006 · confidence medium
E.g., 6 Collier on Bankruptcy ¶ 707.03[1], at 707-15 (15th rev. ed.2005); In re Marks, 174 B.R. 37, 40 (E.D.Pa., 1994); see H.R.Rep.
discussed Cited as authority (rule) Turner v. Johnson (In Re Johnson)
Bankr. N.D. Ga. · 2005 · confidence medium
The Third Circuit has also ruled that bad faith constitutes cause for dismissal, but advises that “[c]ourts ... must decide whether the petitioner has abused the provisions, purpose, or spirit of bankruptcy law.” Tamecki, 229 F.3d at 207 (citing In re Marks, 174 B.R. 37, 40 (E.D.Pa.1994)).
discussed Cited as authority (rule) Webber v. Giarratano (In Re Giarratano)
D. Del. · 2004 · confidence medium
While the Code does not define “good faith”, several courts within this circuit have held that “ ‘[a]t the very least, good faith requires a showing of honest intention.’ ” Id. (quoting In re Marks, 174 B.R. 37, 40 (E.D.Pa.1994)).
discussed Cited as authority (rule) In Re Bellwoar
Bankr. E.D. Pa. · 2003 · confidence medium
Id. at 207 In Tamecki, the Court noted that the Bankruptcy Code does not define “good faith,” but that courts in this circuit have uniformly held that “at the very least, good faith requires a showing of honest intention.” Id. citing In re Marks, 174 B.R. 37, 40 (E.D.Pa.1994).
examined Cited as authority (rule) McDow v. Smith (3×) also: Cited "see", Cited "see, e.g."
E.D. Va. · 2003 · confidence medium
See, e.g., In re Zick, 931 F.2d at 1127 (citing In re Brown, 88 B.R. 280 (Bankr.D.Hawai’i 1988) (holding that "good faith is an implicit jurisdictional requirement and requires inquiry into any abuse of the provisions, the purpose [and]... spirit of the bankruptcy law and into whether the debtor requires the liberal protection of the Code”)); Tamecki v. Frank (In re Tamecki), 229 F.3d 205, 207 (3rd Cir.2000) (citing In re Marks, 174 B.R. 37, 40 (E.D.Pa.1994)) (holding that "[at] the very least, good faith requires a showing of honest intention” on the debtor's part); see also Kestell v. …
discussed Cited as authority (rule) In Re Collins
Bankr. N.D. Ill. · 2000 · confidence medium
While Landes and Latimer have not actually been overruled, the Court notes that the United States District Court for the District of Eastern Pennsylvania, which sits in review over the Landes and Latimer court, has held that a good faith filing requirement does exist under § 707(a), In re Marks, 174 B.R. 37, 40 (E.D.Pa.1994) and has expressly rejected Latimer.
cited Cited as authority (rule) Richard Turpen v. Larry Eide
8th Cir. BAP · 2000 · confidence medium
Va. 1999) (citing In re Marks, 174 B.R. 37, 39 (E.D.
discussed Cited as authority (rule) Turpen v. Eide (In Re Turpen)
8th Cir. BAP · 2000 · confidence medium
Peterson v. Atlas Supply Corp. (In re Atlas Supply Corp.), 857 F.2d 1061, 1063 (5th Cir.1988); Leach v. United States {In re Leach), 130 B.R. 855, 856 (9th Cir. BAP 1991); In re *434 McCullough, 229 B.R. 374, 376 (Bankr.E.D.Va.1999) (citing In re Marks, 174 B.R. 37, 39 (E.D.Pa.1994)).
cited Cited as authority (rule) In Re Landes
Bankr. E.D. Pa. · 1996 · confidence medium
In re Marks, 174 B.R. 37, 40 (E.D.Pa.1994) (bankruptcy court’s denial of a GFFR motion on its merits affirmed).
discussed Cited as authority (rule) In Re John A. Luhrs, Debtor-Appellant John A. Luhrs, Debtor-Appellant (2×) also: Cited "see, e.g."
2d Cir. · 1995 · confidence medium
In re Marks, 174 B.R. 37, 39-40 (E.D.PA.1994).
discussed Cited as authority (rule) In Re SB Properties, Inc.
E.D. Pa. · 1995 · signal: cf. · confidence medium
Cf. In re Marks, 174 B.R. 37, 40 (E.D.Pa.1994) (finding in Chapter 7 case that statute’s use of the term “including” means that the enumerated “causes” are not exhaustive, and that a petition filed in bad faith may be dismissed).
discussed Cited "see" Gregory Barrington Simon
Bankr. M.D. Penn. · 2025 · signal: see · confidence high
See In re Marks, 174 B.R. 37, 40 (Bankr.
discussed Cited "see" In re: Steven Perlin
3rd Cir. · 2007 · signal: see · confidence high
One such example is where the bankruptcy court considers evidence that the debtor “concealed or misrepresented assets and/or sources of income.” Tamecki, 229 F.3d at 207 (internal quotation marks omitted); see In re Marks, 174 B.R. 37, 41 (E.D.
discussed Cited "see" Perlin v. Hitachi Capital America Corp.
3rd Cir. · 2007 · signal: see · confidence high
One such example is where the bankruptcy court considers evidence that the debtor “concealed or misrepresented assets and/or sources of income.” Tamecki, 229 F.3d at 207 (internal quotation marks omitted); see In re Marks, 174 B.R. 37, 41 (E.D.Pa.1994) (“Most instances of dismissal for bad faith filing under § 707(a) involve concealment, misrepresentation, or unexplained transfers to place assets beyond the reach of creditors.” (citing cases)); see also In re Brown, 88 B.R. 280, 284 (Bankr.D.Hawai’i 1988) (finding a lack of good faith where the debtor earned a substantial income and…
examined Cited "see" In Re Ronald Tamecki (4×) also: Cited "see, e.g."
3rd Cir. · 2000 · signal: see · confidence high
See In re Zick, 931 F.2d 1124, 1126-27 (6th Cir. 1991), In re Marks, 174 B.R. 37, 40 (E.D.
examined Cited "see" In Re: Ronald M. Tamecki, Sr., Debtor Ronald M. Tamecki, Sr. v. Lawrence G. Frank (8×) also: Cited "see, e.g."
3rd Cir. · 2000 · signal: see · confidence high
See In re Zick, 931 F.2d 1124, 1126-27 (6th Cir. 1991), In re Marks, 174 B.R. 37, 40 (E.D.
cited Cited "see" In Re McCullough
Bankr. E.D. Va. · 1999 · signal: see · confidence high
See In re Marks, 174 B.R. 37, 39 (E.D.Pa.1994).
cited Cited "see, e.g." Misty Mountain, L.C. v. United States Trustee (In Re Misty Mountain, L.C.)
W.D. Va. · 2001 · signal: see also · confidence medium
See In re Turpen, 244 B.R. 431, 433 (8th Cir. BAP 2000); see also In re McCullough, 229 B.R. 374, 376 (Bankr.E.D.Va.1999)(citing In re Marks, 174 B.R. 37, 39 (E.D.Pa.1994)).
In Re Dr. Manuel H. MARKS
93-5715.
District Court, E.D. Pennsylvania.
Aug 30, 1994.
174 B.R. 37
Marvin Krasny, Liza B. Leidner, Wolf, Block, Schorr and Solis-Cohen, Philadelphia, PA, for debtor Dr. Manuel H. Marks., David N. Bressler, Janet I. Moore, Lesser & Kaplan, P.C., Blue Bell, PA, for Dr. Herman Com, D.D.S., Michael H. Kaliner, Jackson & Sullivan, Fairless Hills, PA, for Edward M. Mazze., Edward M. Mazze, Trustee, pro se., Frederick J. Baker, Trastee, Philadelphia, PA, pro se.
Shapiro.
Cited by 35 opinions  |  Published

MEMORANDUM and ORDER

SHAPIRO, District Judge.

Before the court is the appeal of Herman Corn, DDS (“Corn”) from the order of September 16, 1993 of the United States Bankruptcy Court for the Eastern District of Pennsylvania. For the reasons stated below, the order will be affirmed.

On July 13, 1992, Dr. Manuel H. Marks (“Marks”) filed a voluntary petition under Chapter 7 of the United States Bankruptcy Code, 11 U.S.C. §§ 701-66. On December 2, 1992, Corn, in a Second Motion for Dismissal of Bankruptcy Case under 11 U.S.C. § 707(a), contended that Marks had filed his bankruptcy petition in bad faith. With the consent of the parties, the Bankruptcy Court on February 3, 1993, entered an order stating that the motion would be adjudicated without a formal evidentiary hearing and the record for the motion would consist solely of the averments and admissions in Corn’s motion, the exhibits attached to the motion, Marks’s reply to the motion, Marks’s bank-raptcy petition and schedules, and the transcript of the first meeting of creditors. The court denied Corn’s motion to dismiss on September 16, 1993; Com appealed.

The sole issue is whether the bankruptcy court erred in concluding that Marks met his burden of proving that he filed his bankruptcy petition in good faith. An order denying a motion to dismiss a bankruptcy petition is a final order, In re Brown, 916 F.2d 120, 123 (3d Cir.1990); this court has appellate jurisdiction under 28 U.S.C. § 158.

[*39] Prior to the bankruptcy, Com and Marks were partners in a dental practice. Marks’s debt to Corn arose out of an arbitration award of the American Arbitration Association Commercial Arbitration Tribunal. On July 30, 1991, the Commercial Arbitration Tribunal entered an award stating in relevant part:

[I]ncluding punitive damages, MARKS shall pay to CORN ...
a. The sum of $281,114.00 with interest at the legal rate commencing September 1, 1988 ...;
b. The sum of $20,000.00 for punitive damages.
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On September 13,1991, the Tribunal issued a clarification of its award, stating in relevant part:

[I]ncluding punitive damages, MARKS shall pay to CORN ... $270,000 ... i) under their agreement (which extinguishes all of CORN’S rights in and to the Corporation) and ii) for intentional interference with an economic opportunity by MARKS against CORN, with interest at the legal rate, commencing September 1, 1988 and thereafter until the above sum is fully satisfied.

On March 9, 1991, the Court of Common Pleas of Montgomery County confirmed the award and ordered the Prothonotary to enter judgment, upon praecipe by Corn, for $270,-000 in compensatory damages; $20,000 in punitive damages; $54,000 in interest from September 1, 1988 through December 30, 1991; $1,750 in administrative fees; and $44.38 in interest for each day subsequent to December 30, 1991. On March 17, 1992, Corn filed a praecipe for judgment in the total amount of $349,167.26, and the Protho-notary subsequently entered judgment in that amount.

Marks filed for bankruptcy on July 13, 1992. His schedules listed 4 unsecured claims totaling $381,365.68; most of the total was Corn’s claim for $349,167.26. His schedules also showed secured claims totaling $438,263.35; an annual gross salary of $129,-600; and monthly expenditures of $3,473.17 for mortgage, taxes, insurance, and upkeep of rental properties, $120 for entertainment, and $480 for charitable contributions. The schedules showed total assets of $523,516.84, inclusive of his interest in ERISA pension plans totalling $312,370.41.

At the First Meeting of Creditors, held on August 21, 1992, Marks stated that he filed for bankruptcy because he thought he could not afford to pay Corn’s judgment. [1]

A bankruptcy court’s findings of fact are reviewed under a clearly erroneous' standard; its conclusions of law are subject to plenary review. Mellon Bank, N.A. v. Metro Communications, Inc., 945 F.2d 635, 641 (3d Cir.1991), cert. denied, — U.S.-, 112 S.Ct. 1476, 117 L.Ed.2d 620 (1992). In a mixed question of law and fact, the bankruptcy court’s decision is subject to a mixed standard of review; historical or narrative facts are accepted unless clearly erroneous, but the choice of legal precepts and the application of those precepts to the historical facts are subject to plenary review. Id. at 641-42.

The decision whether to dismiss a bankruptcy petition is guided by equitable principles; therefore, the bankruptcy court’s decision to grant or deny a motion to dismiss under § 707(a) should be reversed only for abuse of discretion. In re Zick, 931 F.2d 1124, 1126 (6th Cir.1991); In re Atlas Supply Corp., 857 F.2d 1061, 1063 (5th Cir.1988); cf. In re ABQ-MCB Joint Venture, 153 B.R. 338, 342 (Bankr.D.N.M.1993) (bad faith is[*40] “essentially a question of fact”). But cf. In re Bingham, 68 B.R. 933, 936 (Bankr.M.D.Pa.1987) (finding of good faith filing listed as a conclusion of law).

Section 707(a) states in relevant part:

The court may dismiss a case under this chapter only after notice and a hearing and only for cause including—
(1) unreasonable delay by the debtor that is prejudicial to creditors;
(2) nonpayment of any fees or charges required under chapter 123 of title 28; and
(3) failure of the debtor in a voluntary case to file ... the information required by paragraph (1) of section 521....

“Good faith” is an implicit prerequisite for filing a petition under Chapter 7. Section 707(a) allows a bankruptcy court to dismiss a petition “for cause.” Although § 707(a) does not list bad faith as an enumerated cause, the statute’s use of the term “including” means that the enumerated causes are not exhaustive; consequently, a petition filed in bad faith may be dismissed for cause under § 707(a). See, e.g., Zick, 931 F.2d at 1126-27; In re Kempner, 152 B.R. 37, 39 (D.Del.1993); In re Hammonds, 139 B.R. 535, 540-41 (Bankr.D.Colo.1992); In re Jones, 114 B.R. 917, 924-26 (Bankr.N.D.Ohio, 1990); In re Sky Group Int'l Inc., 108 B.R. 86, 90 (Bankr.W.D.Pa.1989); In re Maide, 103 B.R. 696, 697 (Bankr.W.D.Pa.1989); Bingham, 68 B.R. at 935.

“Good faith” is not defined in the Bankruptcy Code. At the very least, good faith requires a showing of honest intention. Hammonds, 139 B.R. at 541; In re Campbell, 124 B.R. 462, 464 (Bankr.W.D.Pa.1991); Sky Group Int'l, 108 B.R. at 90; Bingham, 68 B.R. at 935. Such a determination can be made only on an ad hoc basis and depends on whether any abuses of the provisions, purpose, or spirit of bankruptcy law have occurred. Hammonds, 139 B.R. at 542; Sky Group Int'l, 108 B.R. at 90; Bingham, 68 B.R. at 935. Once the good faith issue is placed in question, the party bringing the petition has the burden of proving that the petition was brought in good faith. Hammonds, 139 B.R. at 541; Sky Group Int'l 108 B.R. at 90.

There is no specific test for determining good or bad faith. “‘The facts required to mandate dismissal based upon a lack of good faith are as varied as the number of cases.’ ” Zick, 931 F.2d at 1127 (quoting Bingham, 68 B.R. at 935). [2] Nevertheless, a court should not lightly infer the" presence of bad faith:

Dismissal based on lack of good faith ... should be confined carefully and is generally utilized only in those egregious cases that entail concealed or misrepresented assets and/or sources of income, and excessive and continued expenditures, lavish lifestyles, and intention to avoid a large single debt based upon conduct akin to fraud, misconduct or gross negligence.

Zick, 931 F.2d at 1129. [3]

The bankruptcy court found that the record did not contain sufficient evidence to conclude that Marks led a lavish and excessive rather than “comfortable” lifestyle or that Marks concealed or misrepresented assets or sources of income. The bankruptcy court stated that the record did not establish any unexplained transfer of assets, multiple case filings, extraordinary procedural gymnastics, or lack of candor and completeness in the debtor’s statements and schedules. These findings are not clearly erroneous.

[*41] Most instances of dismissal for bad faith filing under § 707(a) involve concealment, misrepresentation, or unexplained transfers to place assets beyond the reach of creditors. See, e.g., Hammonds, 139 B.R. at 542; In re Johnson, 137 B.R. 22 (Bankr.E.D.Ky.1991); Jones, 114 B.R. at 926; Maide, 103 B.R. at 698-700; In re Brown, 88 B.R. 280, 284-85 (Bankr.D.Hawaii 1988). In the absence of such evidence, it was not an abuse of discretion for the bankruptcy court to conclude that no wrongdoing warranting dismissal had occurred in this bankruptcy action.

In denying the motion to dismiss the petition, the bankruptcy court concluded that a debtor’s ability to repay debts does not of itself establish bad faith or cause for dismissal under § 707(a); this conclusion is not legally erroneous. See, e.g., Hammonds, 139 B.R. at 542-43; In re Bridges, 135 B.R. 36, 37-38 (Bankr.E.D.Ky.1991); S.Rep. No. 989, 95th Cong., 2d Sess. 94 (1978), reprinted in 1978 U.S.C.C.A.N. 5787, 5880 (“The section [§ 707(a)] does not contemplate, however, that the ability of a debtor to repay his debts in whole or in part constitutes adequate cause for dismissal. To permit dismissal on that ground would be to enact a non-uniform mandatory chapter 13, in lieu of the remedy of bankruptcy.”); H.R.Rep. No. 595, 95th Cong., 1st Sess. 380 (1977), reprinted in 1978 U.S.C.C.A.N. 5963, 6336 (same). The bankruptcy court also concluded, and this court agrees, that the Commercial Arbitration Tribunal’s finding that Marks deliberately interfered with Corn’s economic opportunity and the award of punitive damages collaterally estops Marks from arguing that the debt owed to Corn was not based on intentional misconduct. See Goldberg, Hickman & Shalita, P.C. v. Shalita, Civ.Action No. 92-3516, 1992 WL 301521 (E.D.Pa. Oct. 13, 1992).

The Bankruptcy Code explicitly provides that debts arising out of certain types of intentional misconduct by a debtor are not dischargeable. See 11 U.S.C. § 523(a)(2)(A) (exception to discharge for money, property, or services to the extent obtained by false pretenses, false representation, or actual fraud); 11 U.S.C. § 523(a)(4) (exception to discharge for fraud or defalcation while acting in a fiduciary capacity); 11 U.S.C. § 523(a)(6) (exception to discharge for willful and malicious injury by the debtor to another entity or to the property of another entity). Because § 523 mandates exceptions to discharge for some debts arising out of a debt- or’s prior misconduct, the fact that a debtor files for bankruptcy because of a debt arising out of his own intentional misconduct does not necessarily warrant dismissal under § 707(a). The Bankruptcy Judge will address on remand the extent to which Marks’s debt to Corn constitutes an exception to discharge.

The bankruptcy court’s factual findings are not clearly erroneous; the bankruptcy court did not abuse its discretion in concluding that Marks met his burden of proving good faith filing and denying Corn’s motion to dismiss. Consequently, the bankruptcy court’s order will be affirmed. An appropriate order follows.

1

. The transcript of the meeting includes the following exchange between counsel for Com and the debtor:

Q: Is that what you're talking about, you could not afford to pay Doctor Corn’s judgment and were it not for Doctor Corn's judgment you would not have gone into bankruptcy? Is that your testimony?
A: I could not afford to pay Dr. Corn’s judgment.
Q: Okay. And the reason you went into bankruptcy was because you felt you could not afford to pay Doctor Corn’s judgment, is that correct?
A: That’s correct.
Transcript of the First Meeting of Creditors at 11:00 a.m. on August 21, 1992 Before Trustee Edward M. Mazze at 57.
2

. The Bingham court found that the following factors are often present in bad faith filings: (a) frivolous purpose, absent any economic need; (b) lack of an honest and genuine desire to use the statutory process to effect a plan of reorganization; (c) use of a bankruptcy as a device to further some sinister or unworthy purpose; (d) abuse of the judicial process to delay creditors or escape the day of reckoning in another court; (e) lack of real debt, creditors, assets in an ongoing business; and (f) lack of reasonable probability of successful reorganization. Bingham, 68 B.R. at 935.

3

. The good faith requirement is broader than that suggested in In re Latimer, 82 B.R. 354 (Bankr.E.D.Pa.1988). See id. at 356 (stating that "cause” in § 707(a) is limited to violations of the Bankruptcy Code or court orders and does not include substantial abuse of Chapter 7 proceedings or bad faith); id. at 364 (stating that any good faith requirement would include “only the narrow concepts of fraudulent misrepresentations or serious non-disclosures of material facts”).