In re Victory Construction Co., Inc.
Facts:
o Fred
Roven re-activated a defunct company for the purpose of buying a piece
of property that already had several liens on it and then declared
bankruptcy shortly after purchase. He was planning to build a luxury
hotel while in bankruptcy and then sell it for a giant profit.
“Good Faith” Issues the Ct considered:
(1) Does a debtor's lack of "good
faith" in filing a Chapter 11 case constitute "cause" to vacate the
automatic stay under § 362(d)(1)?
(2) Does the law impose a "good faith" condition on debtor's right to file or maintain a proceeding under Chapter 11?
If the answer to these questions
is negative, plaintiff's right to relief in this case is limited to a
consideration of the issues of adequate protection, the existence of
equity, and whether the property is necessary to an effective
reorganization.
(3) Was the debtor's petition in this case filed in "good faith"?
Holdings:
"Good faith" must therefore be
viewed as an implicit prerequisite to the filing or continuation of a
proceeding under Chapter 11 of the Code.
Accordingly, and for the
foregoing reasons, the debtor's lack of "good faith" in filing a case
under Chapter 11 is "cause," independent of the existence or lack of
adequate protection, to vacate the automatic stay under § 362(d)(1).
Ct granted relief from the stay. 
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