Forever Green Athletic Fields, Inc. v. Dawson

Day’s company, Forever Green, sells artificial turf playing fields. It sued its competitor, ProGreen, for $5 million for diversion of corporate assets (Bucks County Action). Dawson, an owner of ProGreen and a former Forever Green sales representative, would be liable if damages are awarded. Dawson sued Forever Green for unpaid commissions and wages (Louisiana Action). Years later, the Louisiana court entered a consent judgment ( about $300,000) in favor of Dawson, which was not paid. Meanwhile, the Bucks County parties agreed to arbitrate. Weeks after the consent judgment entered, ProGreen moved to terminate arbitration, arguing that Forever Green was insolvent and that Day lacked “ability or desire to pay the Arbitrator’s fees and expenses.” Dawson obtained a writ of execution against the arbitrator. Recognizing that he was adverse to Dawson, the arbitrator suspended the arbitration until the fee issue was resolved. Forever Green sued to reinstate the arbitration. Dawson and a law firm that was owed $206,000 from Forever Green, filed an involuntary Chapter 7 bankruptcy petition against Forever Green, which satisfied the statutory criteria, 11 U.S.C. 303(b). The Bankruptcy Court dismissed the filing as being in bad faith. The Third Circuit affirmed, finding that bad faith provides a basis for dismissal independent of the statutory criteria for filing. View "Forever Green Athletic Fields, Inc. v. Dawson" on Justia Law