In re: | ) | |
) | ||
EVAN E. SWENSEN, | ) | Case No. A89-01304 |
) | Involuntary Chapter 7 | |
Debtor. | ) | |
______________________________________ | ) |
(h) If the petition is not timely controverted, the court shall order relief against the debtor in an involuntary case under the chapter under which the petition was filed. Otherwise, after trial, the court shall order relief against the debtor in an involuntary case under the chapter under which the petition was filed, only if--
(1) the debtor is generally not paying such debtor's debts as such debts become due unless such debts are the subject of a bona fide dispute;.
[1] The "generally not paying" test is to be applied as of the date of filing of the involuntary petition, in this case, August 4, 1983. In re JV Knitting Services, Inc., 4 B.R. 597, 598 (Bankr.S.D.Fla. 1980). In applying the test, the Debtor claimed that emphasis should be placed not only on the number and amount of the claims, but on the regularity of payment as well. The Debtor contended that there were genuine issues of material fact regarding whether the Debtor's inability to pay claims over a six-day period commencing July 29, 1983, the date of the first investor demand, constituted "generally not paying its debts."
[2] In In re All Media Properties, 5 B.R. 126, 142-143 (Bankr.S.D.Tex.), aff'd. 646 F.2d 193 (5th Cir. 1981), the court noted that the term "generally not paying" was adopted in preference to terms used in earlier bankruptcy acts to allow more flexibility in the commencement of involuntary cases. The authority of the court is triggered and guided by the totality of the circumstances existing when the petition is filed. Congress intended to provide a flexibility which is not reducible to a simplistic formula. The availability of relief is not circumscribed by time but by knowledge.