Three creditors filed an involuntary bankruptcy petition against the Manchester Lakes Association, alleging that the association was not paying its bills when they came due. Manchester fought the petition, arguing that its general partner, Dominion Federal Savings and Loan, had enough money to pay these bills as they came due, even though it was not doing so.
Should the court refuse to grant the order for relief if the debtor could prove it had the ability to pay its bills? Explain.
In re Manchester Lakes Association, 47 B.R. 798 (Bankr. E.D. VA).