Nichols v. Marana Stockyard & Livestock Market Inc. et al (In re Nichols)
Nichols v. Marana Stockyard & Livestock Market Inc. et al (In re Nichols),___ F.4th___, 2021 WL 3891571 (9th Circ. 9/1/2021). Unanimous decision by 9th Circuit Court of Appeals holds that a Chapter 13 debtor has an absolute right to dismiss that debtor’s Chapter 13 case, even if the Chapter 13 debtor had engaged in bad faith or abuse of the bankruptcy process. Nicols decision rules that the Law v. Siegel US Supreme Court case effectively overrules refusing to let Chapter 13 debtors dismiss their Chapter 13 cases because the debtor had done bad thing. Nichols holds that a debtor who wishes to dismiss the debtor’s Chapter 13 case can do so, regardless whether the debtor had done bad things, such as engaging in bad faith or abuse of the bankruptcy process. In In re Nichols the debtors were indicted on criminal charges that they had participated in a scheme to defraud Marana Stockyard & Livestock Market Inc. the debtors stopped participating in their Chapter 13 case, for fear that disclosures they might need to make in their Chapter 13 case would hurt them in their criminal case. Therefore, debtors sought to dismiss their Chapter 13 case.