In Re Khalil and Shahin Chinichian, Debtors. Khalil and Shahin Chinichian v. Attilio Campolongo

The district court affirmed a bankruptcy court decision holding that the Chinichians filed a Chapter 13 Reorganization Plan in bad faith and that the plan must therefore be rejected. The Chinichians appeal and we affirm the district court.

I. FACTS

Khalil and Shahin Chinichian (the Chinic-hians) and Attilio Campolongo entered into a contract in January, 1980, for the sale of the Chinichian house. The Chinichians later attempted to rescind the contract; Cam-polongo cancelled escrow and sued in state court for specific performance.

Shortly before the specific performance trial the Chinichians filed a Chapter 11 petition moving to reject the contract with Campolongo. The bankruptcy court denied the motion and the Chinichians converted their case into a Chapter 13 bankruptcy. The Chinichians failed to appear at the Chapter 13, section 341(a) meeting of creditors and the Chapter 13 trustee dismissed the case. The Chinichians moved for reconsideration arguing that they had received insufficient notice. The bankruptcy court, however, denied their motion.

Following the dismissal, Campolongo filed a Motion to Reset his specific performance case on the State Court Calendar. The state…