## Facts

- All Seasons Industries, Inc., a boat-building company, filed a voluntary Chapter 11 case.
- The debtor held the initial exclusive 120-day right to file a plan under 11 U.S.C. § 1121(b) and moved to extend exclusivity under § 1121(d) before that period expired.
- The unsecured creditors’ committee supported the extension request.
- Summit Bank and another secured creditor objected to extending exclusivity.
- The debtor asserted cause based on: (1) pending federal litigation that could yield a significant recovery affecting plan feasibility, (2) the seasonal nature of the boat-building business requiring additional time to make reliable projections, and (3) management distraction from early-case litigation with Summit Bank.

## Issues

1. Whether the debtor showed “cause” under 11 U.S.C. § 1121(d) to extend the exclusive period to file a Chapter 11 plan beyond the initial 120 days.
2. Which party bears the burden of proving cause on a motion to extend exclusivity.
3. How the bankruptcy court should exercise discretion under § 1121(d) while guarding against exclusivity being used for delay or creditor leverage.

## Decision

- The bankruptcy court granted the debtor’s motion to extend the exclusivity period.
- The court placed the burden on the movant (the debtor) to demonstrate cause for an extension.
- The court treated “cause” as a fact-dependent determination committed to the bankruptcy judge’s discretion.
- The court found the debtor’s asserted circumstances—potential litigation proceeds, seasonality affecting projections, and litigation-related diversion—sufficient to justify continued exclusivity despite secured-creditor objections.

## Legal Principles

- Under 11 U.S.C. § 1121(d), exclusivity may be extended only “for cause,” and the movant bears the burden of proving cause.
- Because § 1121(d) does not define “cause,” the decision to extend or reduce exclusivity is committed to the bankruptcy court’s discretion and is evaluated case by case.
- Exclusivity must be administered consistently with the statutory purpose of preventing undue delay and avoiding debtor use of exclusivity as bargaining leverage against creditors.
- Legitimate reorganization-related needs—such as material pending litigation, business seasonality affecting forecasting, and case-specific distractions that impede timely plan formulation—may support a finding of cause when balanced against creditor prejudice.

## Conclusion

The court extended the debtor’s Chapter 11 plan-filing exclusivity, holding that the debtor carried its burden to show cause under § 1121(d) and that, on the record presented, an extension served reorganization objectives without constituting improper delay or creditor coercion.


In re All Seasons Indus., Inc., 121 B.R. 1002 (Bankr. N.D. Ind. 1990)