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_. James P. Smith

United States Bankruptcy Judge

UNITED STATES BANKRUPTCY COURT

MIDDLE DISTRICT OF GEORGIA

ATHENS DIVISION

In re: )

)

Two Rivers Irrevocable Trust, ) Case No. 23-30147-JPS

)

Debtor. ) Involuntary Chapter 7

)

BEFORE

James P. Smith

United States Bankruptcy Judge

APPEARANCE:

For Petitioning Creditors: John T. McGoldrick, Jr.

Martin Snow, LLP

P.O. Box 1606

240 Third Street

Macon, GA 31202-1606

478-749-1700

Email: jtmcgoldrick@martinsnow.com

James M. Sherman

Stanley, Esrey & Buckley, LLP

1230 Peachtree Street NE

Suite 2400

Atlanta, GA 30309

(404) 835-6200

Email: jsherman@seblaw.com

For Debtor/Defendant: Courtney Davis

Morgan & Morgan Attorneys at Law, P.C.

1090 C Founders Blvd

Athens, GA 30606

706-548-7070

Fax : 706-613-2089

Email: courtney@morganlawyers.com

MEMORANDUM OPINION

On June 22, 2023, the Court orally announced its findings of fact and

conclusions of law in this case. The Court now memorializes its opinion.

PROCEDURAL POSTURE

Petitioners Cecilia and Barry Rogers and their son Coleman Rogers filed an

involuntary petition against Two Rivers Irrevocable Trust (the “Two Rivers Trust”).

(Docket No. 1). Two Rivers Trust filed an answer (Docket No. 6) asserting three

defenses. First, Two Rivers Trust asserted that it is not a “business trust” and

therefore, cannot be a debtor under 11 U.S.C. §§ 101(9), 101(41) and 109(b).1

Second, Two Rivers Trust denied that it was generally not paying its debts as they

come due. Finally, Two Rivers Trust asserted that the Petitioners have adequate

remedies under state law and therefore, the petition was filed in bad faith by

attempting to use the bankruptcy process for improper purposes. The matter came

on for hearing beginning May 31, 2023, and was continued to and concluded on

June 12, 2023.

After considering the evidence, the briefs, the legal arguments of counsel, and

the law, the Court, pursuant to Federal Rule of Bankruptcy Procedure 52(a)(1),

publishes its findings of fact and conclusions of law.

FINDINGS OF FACT

Two Rivers Trust owns approximately 334 acres of land in Greene County,

Georgia. Mike McCommons is the sole trustee of the Two Rivers Trust.

Two Rivers Trust was formed January 13, 2012. On that date, Two Rivers

Holding Co., Inc.2 transferred by quit claim deed seven tracts of land to Two Rivers

Trust. McCommons, also on January 13, 2012, transferred by quit claim deed three

1 Statutory references herein are to Title 11 of the United States Code (the “Bankruptcy Code”),

unless otherwise specified.

2 Mike McCommons is the sole owner of Two Rivers Holding Co.

tracts to Two Rivers Trust. In total, approximately 334 acres were transferred by

quit claim deed on January 13, 2012.

McCommons testified that his son, Steven McCommons, suffered a serious

and permanent brain injury in a motorcycle accident. McCommons formed Two

Rivers Trust on advice to make long-term plans for Steven. Steven McCommons is

the sole beneficiary of Two Rivers Trust.

A motorbike racing facility, known as Durham Town, operates on Two Rivers

Trust’s property. Durham Town includes additional property leased from family

members related to McCommons. Durham Town is comprised of (1) approximately

150 miles of dirt bike trails, (2) a racing course, (3) a drag strip, (4) a restaurant, (5)

a pro shop which leases and sells motorcycle racing equipment, (6) cabins, campers,

trailers, and recreational vehicles for overnight rental, and (7) hunting land.

Durham Town has been in operation for approximately twenty years.

Evidence at the hearing in the form of tax returns, profit and loss statements and

testimony established that McCommons had operated Durham Town through

numerous entities which he owned, including Georgia Trails and Rentals, Inc., Two

Rivers Holding Co Inc., Durham Town Pro Shop, Bevlyn’s Kitchen, Inc., Durham

Town Off Road Park, Inc., Durham Town Plantation Sportsman’s Resort, LLC, and

D.T. Farms. Allegedly, one or more of these entities has been leasing from Two

Rivers Trust the land on which part of Durham Town is operated. McCommons

testified that there were no written leases and that all the leases, including those

with his family members on non-Two Rivers Trust property, were “handshake

deals.” One would assume that one or more of these entities would have been

paying rent to Two Rivers Trust for the use of Two Rivers Trust’s land and

buildings. However, Two Rivers Trust did not have a bank account until June 2020.

The documents introduced at trial show that rent was paid to Georgia Trails and

Rentals, Inc. and to Two Rivers Holding Co, Inc., even though those entities had no

ownership interest in the real property upon which Durham Town operated.

Kimberly Crowley, who did the bookkeeping for the Durham Town entities

from 2012 to 2021, testified that she wrote checks to various entities, at various

times and in various amounts as directed by McCommons. She testified that

Durham Town shut down in 2021. It then reopened, but all fees generated by

Durham Town were then paid to various entities created by Tim McCommons, Mike

McCommons’s brother. Mike McCommons testified that after the Petitioners

obtained their judgments, entities owned by Tim McCommons took over the

operation of Durham Town, although there was no evidence of any formal transfer

of the business from Mike McCommons’s entities to Tim McCommons’s entities.

Petitioners hold judgments for various amounts against Georgia Trails and

Rentals, Inc., Durham Town Plantation Sportsman’s Resort, LLC, Two Rivers

Holding Company, Inc., Joseph Lassen, McCommons and the Two Rivers Trust

recovered in the Superior Court of Greene County, Georgia, Civil Action No. 16-CV-

204. The judgments arise from damages incurred by Coleman Rogers. Coleman

Rogers was racing at Durham Town when he hit a culvert pipe and catastrophically

damaged his right leg. Cecilia and Barry Rogers hold judgment against Two Rivers

Trust in the principal amount of $154,198.60. Coleman Rogers holds judgment

against Two Rivers Trust in the principal amount of $2,982,000. The judgments

have been recorded in Greene County, thus imposing judgment liens on the

property of Two Rivers Trust.

CONCLUSIONS OF LAW

1. Whether the Trust is a “Business Trust” under the Bankruptcy Code

The first issue is whether a trust can be a debtor under Chapter 7. “The

burden of establishing eligibility in bankruptcy lies with the party filing the

bankruptcy petition.” Montgomery v. Ryan (In re Montgomery), 37 F.3d 413, 415

(8th Cir. 1994).

Section 303(a) provides that an involuntary case can be commenced only

against a “person, except a farmer, family farmer, or a corporation that is not a

moneyed, business, or commercial corporation, that may be a debtor under the

chapter under which such case is commenced.” 11 U.S.C. § 303(a). “Corporation” is

defined under § 101(9)(A)(v) to include a “business trust.”3 “Business trust” is not

defined in the Bankruptcy Code. While an abundance of case law from around the

country develops the definition of “business trust,” neither the Supreme Court of the

United States nor the United States Court of Appeals for the Eleventh Circuit have

defined the term in the context of the Bankruptcy Code. However, “the one

overriding principle that emerges from the cases is that the determination of

whether a trust is a business trust is fact-specific and focuses on the purpose and

operations of the trust.” See Catholic Sch. Emples. Pension Trust v. Abreu (In re

Catholic Sch. Emples. Pension Trust), 599 B.R. 634, 662 (B.A.P. 1st Cir. 2019)

(quoting In re Jin Suk Kim Trust, 464 B.R. 697, 704 (Bankr. D. Md. 2011)).

Thus, while there is no binding precedent, this Court looks to a recent case in

which the United States Bankruptcy Court for the District of Colorado establishes

the legal meaning of “business trust.” See In re Quadruple D Trust, 639 B.R. 204

(Bankr. D. Colo. 2022).

In Quadruple D Trust, Judge McNamara held that interpreting terminology

in the Bankruptcy Code was a matter of federal statutory interpretation and is not

governed by federal common law or state law. Id. at 219. The court determined

3 One court suggests “Congress included business trusts in the Bankruptcy Code definition of a

corporation as a person because of their similarity to corporations.” Mosby v. Boatmen’s Bank of St.

Louis County (In re Mosby), 61 B.R. 636, 638 (E.D. Mo. 1985), aff’d 791 F.2d 628 (8th Cir. 1986).

“that the term ‘business trust’ does not have a plain or ordinary meaning well

understood by the American public writ large.” Id. at 220.

To distill the definition of “business trust,” the court looked at pre-

Bankruptcy Code case law and found the cases of Hecht v. Malley, 265 U.S. 144, 44

S. Ct. 462 (1924), and Morrissey v. Comm’r of Internal Revenue, 296 U.S. 344, 56 S.

Ct. 289 (1935), were binding precedent. Quadruple D Trust, 639 B.R. at 221–23.

Beyond pre-Bankruptcy Code case law, the court considered: (1) pre-Bankruptcy

Code legal dictionary definitions; (2) usage in pre-Bankruptcy Code articles and

other sources; (3) definition under state law; and (4) usage in bankruptcy cases. Id.

at 224–36. The court concluded the Supreme Court cases of Hecht and Morrissey

were controlling. Id. at 231. Relying on Morrissey, the court held:

the “salient features” of a business trust are;

(1) a trust “created and maintained” for a business purpose;

(2) title to property held by trustees;

(3) centralized management;

(4) continuity uninterrupted by death among beneficial owners;

(5) transferability of interests; and

(6) limited liability.

Id. at 230 (citing Morrissey, 296 U.S. at 357–359, 56 S. Ct. 289).

Applying these factors to the facts at hand, the Court finds Two Rivers Trust

is not a “business trust” as used in the Bankruptcy Code. The Court notes that

feature one, whether the trust was created and maintained for a business purpose,

is dispositive as to whether Two Rivers Trust is a business trust. Because factor one

is dispositive, the Court, in its analysis, addresses only factors one, four, and five.

1. Created for a Business Purpose

First, the Court must determine whether Two Rivers Trust was created for a

business purpose. Here, it was not.

Whether a trust is created and maintained for a business purpose is “the

most important factor for determining whether a trust is eligible to file for

bankruptcy protection as a ‘business trust.’” Id. at 236 (citing Morrissey, 296 U.S. at

359). A court should first inquire into the intention or purpose of the trust at the

time of its creation, then if the court finds the trust was created for business

purposes, the court should determine whether the trust engaged in business

activities. Id.

“The trust instrument serves as key evidence of the purpose of any trust at

formation.” Id. at 236; see also In re St. Augustine Trust, 109 B.R. 494, 496 (Bankr.

M.D. Fla. 1990) (“Of course, any inquiry into the nature of the debtor [ ] and its

eligibility for relief under Title 11 must begin with an examination of the trust

documents.”). After the trust documents, a court should then consider a trust’s

methods of operations. In re St. Augustine Trust, 109 B.R. at 496.

The United States Bankruptcy Court for the Middle District of Florida, in In

re Pace, analyzed whether a trust was a business trust and thus an eligible debtor.

In re Pace, 376 B.R. 334, 336 (Bankr. M.D. Fla. 2007). The court examined the trust

agreement and considered evidence presented at trial. Id. Finding the trust was

created for estate and family planning purposes, the court determined the trust was

ineligible to proceed as a debtor. Id. at 336–37. The court noted that while the trust

was created to “hold and conserve property, the trust’s purpose was merely to

preserve the res and not to conduct business and share gains.” Id.

Similarly, in In re Quadruple D Trust, the court found that, pursuant to the

trust agreement, the trust was created as an irrevocable trust for the primary

benefit of the family of the settlor. 639 B.R. at 237.

“This provision confirms that all the beneficiaries of the Trust are family

members and suggests that the Trust is a typical family trust, not a

“business trust.” Notably, the Trust Agreement does not identify the

beneficiaries’ respective ownership interests in the Trust by percentage,

shares, or certificates. The Trust also is a donative trust. Dille Family

Trust, 598 B.R. 179, 199 (Bankr. W.D. Pa. 2019) (“a traditional trust

facilitates a donative transfer, where as a business trust implements a

bargained- for- exchange”). Nothing in the Trust Agreement indicates

that any of the beneficiaries contributed anything to the trust (i.e., made

an investment in the Trust). Instead, the Trust Agreement states: “The

Settlor...transfers and delivers to the trustee...the property in schedule

and (sic) attached hereto.” The beneficiaries did not put their capital at

risk.

Id. at 237.

The Quadruple D court also noted that the trust documents included a

spendthrift provision. Id. Spendthrift provisions restrict the transfer of a beneficial

interest. See Restatement (Third) of Trusts § 58(1) (Am. Law Inst. 2003) (“The term

“spendthrift trust” refers to a trust that restrains voluntary and involuntary

alienation of all or any of the beneficiaries’ interests.”). “Georgia law provides for

enforcement of spendthrift provisions in trusts.” Coleman v. Hainlen (In re

Hainlen), 365 B.R. 288, 292 (Bankr. S.D. Ga. 2007); O.C.G.A. §§ 53-12-28(a) and (b).

Thus, a trust which includes an enforceable spendthrift clause is “powerful evidence

that the trust does not have a business purpose.” In re Quadruple D Trust, 639 B.R.

at 237.

Two Rivers Trust shares the same characteristics. Here, the Trust Document

(the “Document”) (Petitioners’ Exhibit 1) explicitly states Two Rivers Trust was

created to preserve property for the benefit of McCommons’s family. Pursuant to

Article 1 of the Document, “The purpose of the creation of this Trust is to benefit the

descendants of Mike McCommons. Descendants include Steven McCommons, son of

Mike McCommons.” Thus, the beneficiaries of the Two Rivers Trust are relatives of

McCommons, which indicates Two Rivers Trust is a family trust rather than a

business trust.

Further, Article 6 of the Document provides, in part, “Finally, the Grantor’s

primary purpose is to preserve the property held in trust for the future benefit of

the beneficiaries, and to ensure that said property is protected from liquidation by

poor decisions of the youthful beneficiaries.” This is consistent with the testimony of

Mike McCommons, who testified that he created the trust to protect the property

from poor decisions by his son, Steven.

Likewise, Two Rivers Trust includes a spendthrift clause. (See Petitioners’

Exhibit 1, Article 4 (f)). The Quadruple D court noted that: “[E]very case that has

involved a restriction on the transferability of the beneficiaries’ interest, whether a

nominee trust or not, has held the trust did not qualify as a [bankruptcy] debtor.” In

re Quadruple D Trust, 639 B.R. at 238–39 (citing In re Woodsville Realty Tr., 120

B.R. 2, 6 (Bankr. D.N.H. 1990) (alteration in original)).

Thus, similar to the trusts in Pace and in Quadruple D Trust, Two Rivers

Trust was created to hold property for estate and family planning purposes. Both

the Document and the testimony of Mike McCommons indicate the purpose of Two

Rivers Trust was to “preserve the res and not to conduct business and share gains.”

In re Pace, 376 B.R. at 336.

Although the Court finds Two Rivers Trust was not created for a business

purpose, the Court considers whether the Two Rivers Trust was maintained for a

business purpose.

2. Maintained for a Business Purpose

“The second inquiry is whether the [t]rust actually engaged in business

activities.” In re Quadruple D Trust, 639 B.R. at 238. “Commercial or business

activities” appears in, but is nowhere defined, in the Bankruptcy Code. See 11

U.S.C. §§ 101(51D), 1182(1)(A). At least one court has construed “commercial or

business activities” to mean “private sector actions related to buying, selling,

financing, or using goods, property, or services, undertaken for the purpose of

earning income (including by establishing, managing, or operating an incorporated

or unincorporated entity to do so.” In re Ikalowych, 629 B.R. 261, 276 (Bankr. D.

Colo. 2021). The court in Quadruple D Trust relies on this definition, so this Court

likewise applies it. See In re Quadruple D Trust, 639 B.R. at 238.

The evidence establishes that Two Rivers Trust has simply existed since its

inception. Although it supposedly leased land and recreational vehicles to the

various entities operating Durham Town, Two Rivers Trust received no rent until

2020. The Two Rivers Trust had no bank account until June 2020. Further, Two

Rivers Trust used the bank account for just over one year. Two Rivers Trust

stopped using the bank account sometime after July 2021, when Petitioners

garnished the account. (See Petitioners’ Exhibits 6, 7 and 8).

Although Two Rivers Trust’s 2020 federal income tax return states on

Schedule C that it is a “Management Company,” none of the expenses shown are

related to the operation of any business. (See Petitioners’ Exhibit 9). Nor does Two

Rivers Trust’s 2021 profit and loss statement show any kind of business expenses.

(See Petitioners’ Exhibit 18). Rather, the expenses are consistent with passive

leasing of land, and the same can be said of the rental income shown. (See also 2021

Bank South Register, Petitioners’ Exhibit 29).

Two Rivers Trust filed no tax returns until 2020. Although there was

testimony that a return was filed in 2021, that return was not introduced into

evidence. Further, Two Rivers Trust did not obtain an Employer Identification

Number until June 2020. McCommons, in his uncontroverted testimony, stated that

none of the contracts with vendors who supplied goods and services to Durham

Town were in Two Rivers Trust’s name. None of the fees or income generated by the

Durham Town operations were paid to Two Rivers Trust. Rather, they were paid to

McCommons’s various corporate entities such as Georgia Trails and Rentals. There

is no evidence that Two Rivers Trust paid any of the bills associated with the

operation of Durham Town. McCommons operated Durham Town through his many

corporations. Although McCommons is Two Rivers Trust’s sole trustee, there is no

evidence that he was operating Durham Town in his capacity as trustee.

As in the case at bar, the court, in Quadruple D Trust noted that the trust

had “no officers, directors, managers or employees.” Id. at 238. And, as in the case

at bar, the trust in Quadruple D had almost no income since its creation. Because “a

‘business trust’ is supposed to ‘provide a medium for the conduct of a business and

sharing its gains,’ the lack of any attempt to earn income and realize gains suggests

that the trust is not a ‘business trust.’” Id. at 238 (citing Morrissey, 296 U.S. at 357,

56 S. Ct. 289).

As in our case, the trust in Quadruple D Trust rarely filed tax returns. The

court in Quadruple D Trust explained that because the trust failed to file its federal

tax returns, the court “infer[red] that the [t]rust had no income over such period.” In

re Quadruple D Trust, 639 B.R. at 210. Here, the Court finds Two Rivers Trust’s

failure to file federal income tax returns supports the proposition that it earned no

income.

In conclusion, Two Rivers Trust was not created or maintained for a business

purpose. While this feature alone is dispositive, the Court also notes that Two

Rivers Trust terminates upon the death of its beneficiaries4 and, as explained

above, the beneficiaries of Two Rivers Trust cannot transfer their interests.5

(Petitioners’ Exhibit 1).

This Court concludes that Two Rivers Trust is not a “business trust” as that

term is used in the Bankruptcy Code. “A non-business trust is not eligible to be a

debtor under chapter 7.” In re Darren Buckner Living Trust, Case No. 12-70036-

4 Article 3(l) of the Document establishes that upon death of all its beneficiaries, Two Rivers Trust

terminates, and Two Rivers Trust property is to be distributed according to the laws of descent and

distribution of the state of Georgia (See Petitioners’ Exhibit 1). Morrissey instructs that this factor

indicates that Two Rivers Trust is not a business trust. See Morrissey, 296 U.S. at 357, 56 S. Ct. 289.

5 Article 4(f) of the Document includes a spendthrift provision, which restricts transferability of

interests. See Petitioners’ Exhibit 1.

MHM, 2012 Bankr. LEXIS 5050, *1 (Bankr. N.D. Ga. Oct. 5, 2012). Accordingly, the

case must be dismissed.6

2. Whether the Two Rivers Trust is Generally Paying Debts as they Become

Due

Two Rivers Trust argues that it is generally paying its debts as they become

due. Per § 303(h)(1), a court shall order relief against an alleged debtor in an

involuntary bankruptcy case only where the debtor is generally not paying its debts

as they become due unless such debts are the subject of a bona fide dispute as to

liability or amount.7 11 U.S.C. § 303(h)(1).

To determine whether a debtor is generally not paying its debts as they come

due, courts consider a number of factors:

including (1) the number of debts; (2) the amount of delinquency; (3) the

materiality of nonpayment; (4) the nature of the debtor’s conduct in its

financial affairs; (5) the timeliness of payments on past due obligations;

(6) the amount of debts long overdue; (7) the length of time during which

the debtor has been unable to meet large debts; (8) any reduction in the

debtor’s assets; (9) the debtor’s deficit financial situation.

In re Spivey, No. 10-50340, 2010 WL 5476754, *1. (Bankr. S.D. Ga. December 17,

2010).

Here, Two Rivers Trust has few debts. The 2021 and 2022 Greene County

property taxes have not been paid. Some of the property of Two Rivers Trust has

been pledged to secure McCommons’s loans with Chase and Wells Fargo and those

debts are now in default. Debra White holds a judgment against Two Rivers Trust

in the amount of $22,000,000 arising from her husband’s death. Mrs. White’s

husband was killed by a falling tree on Two Rivers Trust’s property.8 Petitioners’

6 While this conclusion would normally end the Court’s inquiry, the Court will nevertheless address

the remaining issues asserted by the Two Rivers Trust.

7 Section 303(h)(2) offers an alternative, if within 120 days before the filing of the involuntary

bankruptcy petition, a custodian was appointed or took possession. 11 U.S.C. § 303(h)(2).

8 The judgment held by Mrs. White is under appeal and is not being paid.

hold judgments against Two Rivers Trust arising from injuries sustained by

petitioner Coleman Rogers.

Petitioners’ judgments are not being paid. McCommons testified that Two

Rivers Trust’s legal fees in this case are being paid by his brother Tim.

Accordingly, there is simply no escaping the conclusion that Two Rivers Trust

is generally not paying its debts as they come due and an order for relief would

otherwise be appropriate under § 303(h)(1).

3. Whether the Petition is an Abuse of the Bankruptcy Forum

Two Rivers Trust argues that filing the petition is an abuse of the bankruptcy

forum. Petitioners respond that (1) they are not a single creditor but are separate

creditors and (2) that the interests of creditors and the debtor would not be better

served by dismissal or abstention. In General Trading, Inc. v Yale Materials

Handling Corp., the Eleventh Circuit recognized that there were three approaches

for determining bad faith. 119 F.3d 1485 (11th Cir. 1997). The Court stated:

Because “bad faith” is not defined in the bankruptcy code, and because

there is no legislative history addressing the intended meaning of this

language, courts have used different approaches to determine whether

a petition was filed in bad faith. Some courts have established an

“improper purpose test,” under which bad faith exists where the filing

of the petition was motivated by ill will, malice or the purpose of

embarrassing or harassing the debtor. In re Camelot, 25 B.R. 861, 864

(Bankr. E.D. Tenn. 1982) (bad faith where motivation for filing

involuntary petition was to “spitefully forestall the dissolution of the

debtor corporation” and to frustrate the results of a state court

proceeding); see In re Better Care, Ltd., 97 B.R. 405, 410 (Bankr. N.D.

Ill. 1989).

A second line of authority applies what is known as an “improper use”

test, where bad faith exists “when a creditor’s actions amount to an

improper use of the Bankruptcy Code as a substitute for customary

collection procedures.” In re Better Care, Ltd., 97 B.R. at 410. An

improper use includes instances where “a creditor uses an involuntary

bankruptcy to obtain a disproportionate advantage to that particular

creditor’s position, rather than to protect against other creditors

obtaining such a disproportionate advantage.” Id. at 411.

The third line of authority analyzes the bad faith issue by reference to

Bankruptcy Rule 9011, which is patterned after Fed. R. Civ. P. 11. An

analysis under Rule 9011 inquires into “a significant objective

requirement bearing on the legal justification of a claim or defense: a

reasonable inquiry into the facts and the law.” In re Turner, 80 B.R. 618,

623 (Bankr. D. Mass. 1987). In addition to requiring an objective

inquiry, Rule 9011 requires a subjective inquiry as well: the bankruptcy

proceeding cannot have been interposed for an improper purpose, “such

as to harass, to cause delay, or to increase the cost of litigation.” Rule

9011.

Id. at 1501–02. In that case, the court said that it did not need to decide which

approach was correct because under any of the test, the trial court was clearly

erroneous in finding bad faith. Id. at 1505.

Here, the Court concludes that the improper use test should be applied. Thus,

the Court concludes that a bankruptcy case would serve no purpose that creditors of

Two Rivers Trust could not otherwise achieve under state law.

Greene County holds a lien for unpaid property taxes. However, they are

fully protected by their property tax liens, which are first priority liens under state

law. O.C.G.A. § 48-2-56(b). Chase and Wells Fargo hold first mortgages on three of

Two Rivers Trust’s parcels securing mortgage debts by McCommons of

approximately $316,600 principal. (See Petitioners’ Exhibits 30–32). Accordingly,

they can protect themselves by foreclosure.9

Additionally, the Petitioners hold judgment liens on Two Rivers Trust’s

property. They can exercise their collection rights under state law. Likewise, Mrs.

White, if her judgement is affirmed, will also have collection rights under state law.

9 Because the mortgages secure notes by McCommons which Two Rivers Trust did not guarantee,

neither Chase nor Wells Fargo would have a remaining claim against Two Rivers Trust if the

mortgaged properties do not generate enough money at the foreclosure to pay the debts in full.

Petitioners argue that if Coleman Rogers is forced to pursue a sheriff’s sale

on his judgment and he:

is the highest and best bidder at the sale and obtains title to the property

he takes it subject to the claims of those persons currently living on the

property, he will be surrounded by lands owned by the cousins of Mike

McCommons which have been part of the operations of Durham Town,

and he will have an obligation to exclude from the property the many

participants who have been operating vehicles on the property or risk

incurring the same liability as that has been incurred by Two Rivers for

accidents occurring on the property.

(Docket No. 18, p. 3).

But those exact same reasons lead this Court to conclude that a trustee

appointed in this case after an entry for an order for relief would immediately

abandon the property under § 554(a) as property “that is burdensome to the estate

or that is of inconsequential value and benefit to the estate,” thus putting the

Petitioners in the same position they faced prior to the filing of this case.

Petitioners argue that the property has insufficient value to cover the

judgement liens and that after a sheriff’s sale, they will have significant unsecured

claims. Petitioners argue that by failing to have rent from Durham Town paid to

Two Rivers Trust there have been massive fraudulent conveyances that a trustee

could pursue to apply to their unsecured claims and to the claim of Mrs. White, if

affirmed. However, under O.C.G.A. § 18-2-70 et seq., Petitioners and Mrs. White

have the same rights to avoid fraudulent transfers as a trustee under § 544.

In summary, nothing can be accomplished in a bankruptcy case that Two

Rivers Trust’s creditors cannot achieve under state law. Accordingly, the Court

finds that the petition has been filed in bad faith solely for collection purposes and

that the petition should be dismissed.

A separate order consistent with this opinion will be entered.

[END OF DOCUMENT]