In Re Blue Stone Real Estate, Construction & Development Corporation

392 B.R. 897 (2008)

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Nature of the Case

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Facts

Pending for trial on August 15, 2008, was the U.S. Trustee's Emergency Motion to Appoint a Chapter 11 Trustee Pursuant to 11 U.S.C. Section 1104(a)(1) or (2), or in the Alternative to Appoint an Examiner, pursuant to U.S.C. Section 1104(c)(1) or (2). The Trustee's related to alleged acts or omissions of DeMaria, P's principal, as well as document deficiencies that have plagued the since its inception. P's schedules and statements of financial affairs are incomplete and inaccurate. DeMaria has not fully accounted for pre-petition use of P credit cards and for pre-petition distributions made by P to DeMaria or for his benefit nor for a $ 100,000 deposit that should have been received by P for a sale of a gas station has not been fully accounted for. DeMaria has not provided all documents requested by the United States trustee due to this and a general lack of cooperation, the meeting of creditors has been continued many times and remains pending. P transferred or attempted to transfer four parcels of property located in Arkansas and one parcel of property located in Missouri. None of these alleged transfers was disclosed in P's schedules and statement of financial affairs. Additionally, none of the property is disclosed in P's schedules and statement of financial affairs. DeMaria contends that all of the transfers were made in the ordinary course of business and, thus, did not require disclosure in the statement of financial affairs. DeMaria failed to disclose the transfers in response to direct questioning about all transfers of property from P (i.e., regardless of their possible characterization as ordinary course transactions). The Trustee's Motion argues that DeMaria 'engaged in fraud, dishonesty, gross mismanagement, or is incompetent with regard to managing the affairs of P both before and after the filing.' Ps request an expedited hearing for the Court to consider the entry of an order approving their retention of Steven S. Oscher, C.P.A., and Oscher Consulting, P.A. as their Chief Restructuring Officer (CRO) to (i) review P's books and records and conduct the necessary investigation to ensure that the schedules and statements of financial affairs are accurately prepared and, if not, prepare and file corrected ones, conduct a thorough inventory of the assets, negotiate with and verify the financial viability of all potential purchasers and oversee and monitor the liquidation of the P's assets. The United States trustee and two secured creditors opposed the appointment. Relief was requested by P.