RENO, October 9, 2026 — Kaempfer Crowell attorney Louis M. Bubala III secured the dismissal of an involuntary bankruptcy petition against a medical equipment company, removing a significant obstacle to the proposed sale of the company’s assets and transition of the business to a new entity.
The company explored several options to address financial difficulties in its business of selling and servicing veterinary equipment. It ultimately settled on a foreclosure sale conducted by the lender, which held a security interest in the company’s personal property. The foreclosure would eliminate the secured debt, allow for a prompt sale, and give the purchaser a chance to use the assets in a new business.
An unsecured creditor filed an involuntary bankruptcy petition in an attempt to stop the foreclosure. The creditor hoped to force a chance in management, keep the company operating, and create an opportunity for the company to pay its unsecured creditors.
Bubala successfully challenged the petition, arguing that the creditor did not meet the requirements to file an involuntary bankruptcy. The key disputes involved whether a purchase and sale of equipment had been completed, whether the creditor was entitled to a refund from the company and, if so, how much.
The bankruptcy court agreed that a creditor with a disputed claim could not file an involuntary bankruptcy petition. The court dismissed the case because no qualified petitioning creditors joined the filing. The court also denied the creditor’s motion for reconsideration on procedural and evidentiary grounds, leaving the case dismissed.
The rulings cleared the way for the secured creditor to conduct a foreclosure sale, consistent with the company’s preferred approach to resolving the matter.
About Kaempfer Crowell’s Bankruptcy Practice
Kaempfer Crowell advises creditors, lenders, businesses, and other stakeholders in bankruptcy proceedings, restructuring matters, creditor disputes, and insolvency-related litigation. The firm’s attorneys help clients protect their interests, preserve value, and achieve practical business solutions when financial distress or ownership transitions are involved.
Louis M. Bubala III represented the alleged debtor in this matter.
