Dressler

We must decide whether the bankruptcy court abused its discretion in imposing sanctions upon counsel for filing a Chapter 11 petition with the improper purpose of delaying state court litigation of a commercial dispute.

I

In 1994, Fred Lawrence Silberkraus (the “Debtor”) and L.E. Coppersmith, Inc. (“Coppersmith”) entered into a five-year lease agreement for a 75,000 square foot industrial building located in Redondo Beach, California (the “commercial property”), with Coppersmith holding an option to purchase the property for $3,950,000 at the end of the term. The lease agreement further provided that the Debtor’s real estate agent, the Seeley Company (“Seeley”), would receive a commission upon exercise of the option.

Coppersmith subsequently exercised its right to purchase the commercial property. On October 18, 1999, however, the Debtor informed the concerned parties that escrow would not be closing as scheduled. Shortly thereafter, Coppersmith filed a complaint for breach of contract in Los Angeles Superior Court, seeking specific performance to compel the Debtor to sell the commercial property pursuant to the terms of the option agreement.

On February 8, 2000, the…