IN RE: SOUTHERN ILLINOIS MINING COMPANY CASE NO. 93-50148
UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
SOUTHERN ILLINOIS MINING COMPANY CASE NO. 93-50148
MARION MINING CORPORATION CASE NO. 93-50147
"These cases came on before the court on April 22, 1994, on the motion of the United States Trustee to convert or dismiss the cases. . . . .
The motion of the United States Trustee to convert or dismiss the cases alleges that the debtors have not been operating during the pendency of these cases and that their failure to submit a plan during the thirteen months that the cases have been pending evidences an inability on the part of the debtors to effectuate a plan and indicates the absence of a reasonable likelihood of rehabilitation, that the delay in these proceedings is prejudicial to creditors and results in a diminution of the estate caused by an accrual of interest and other costs during the delay.
The U.S. Trustee seeks conversion or dismissal of the Marion Mining Corporation case on the additional ground that the debtor has not paid accrued U.S. Trustee fees. . . .
The ability of the debtors to reorganize depends on the question of whether the T1 contract between the debtor Southern Illinois Mining Company and TVA is assumable and assignable and on the success of the debtors in Adversary Proceeding No. 94-5031 against Addington Holding Co. in which the debtors seek a return of assets, subordination of the claim of Addington Holding Company, and punitive damages. The court is persuaded that the interests of the debtors and creditors with respect to these matters will be best represented by permitting the debtors to remain under the protection of chapter 11 and the attorneys for the debtors in possession to pursue these matters. The court is not persuaded that creditors are being harmed by a diminution in assets, in view of the fact that collateral has been surrendered routinely to those secured creditors who have requested relief from stay.
The only basis for conversion or dismissal of the Marion Mining Corporation case is the failure of the debtor to pay U.S. Trustee fees. Dismissal on that ground is discretionary rather than mandatory, and should not be granted where in the judgment of the court the possible detriment to creditors resulting from conversion or dismissal far outweighs the possible detriment to the U.S. Trustee program that may result from failure to collect minuscule fees."
Dated: May 17, 1994.
By the court -
Joe Lee, Chief Judge
Terry L. Gibson
W. Thomas Bunch
J. Montjoy Trimble
Solomon Van Meter