In re Aurora Memory Care, LLC
United States Bankruptcy Court for the Northern District of Illinois
589 B.R. 631 (2018)
- Written by Abby Roughton, JD
Facts
Aurora Memory Care, LLC (AMC) (debtor) operated a healthcare facility in Illinois. Immigration lawyer Taher Kameli owned the company that owned AMC. Kameli was involved with several healthcare facilities in Illinois and Florida, and he established investment funds in connection with the facilities. Foreign nationals invested in Kameli’s funds to gain United States citizenship under an immigration program that granted citizenship to immigrants who invested in certain US businesses. The United States Securities and Exchange Commission (SEC) filed a civil action against Kameli, accusing him of violating federal securities laws based on the investment scheme involving AMC and the other healthcare facilities. The SEC named AMC as a relief defendant in that action. In addition to receiving funding from foreign nationals, AMC had also obtained a $6.5 million loan from West Suburban Bank (creditor) in 2015. AMC failed to repay the loan, and the bank brought a foreclosure action against AMC in an Illinois state court. While that action was pending, a chapter 11 proceeding involving AMC was commenced in the Northern District of Illinois. AMC failed to file monthly operating reports as required by the Bankruptcy Code and failed to propose a reorganization plan. AMC did tell the bankruptcy court that its proposed reorganization would involve refinancing AMC’s debt to the bank. AMC claimed to have secured funding from a company called T2 Investments, but T2 had not formally agreed to a loan. Additionally, T2’s letter of intent specified several contingencies on financing, including the dismissal of AMC from the SEC lawsuit. Although Kameli claimed to have discussed dismissal with the SEC, the dismissal had not occurred. The bank moved under 11 U.S.C. § 1112(b) to dismiss the chapter 11 proceeding or convert the action to a chapter 7 proceeding, arguing that AMC had no reasonable likelihood of successfully confirming a reorganization plan.
Rule of Law
Issue
Holding and Reasoning (Goldgar, J.)
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