Unsecured Creditors Committee v. General Homes Corp. (In Re General Homes Corp.)

Opinion on Appeal

HUGHES, District Judge.

1. Introduction.

Three creditors filed an involuntary petition against a debtor under Chapter 11 of the Bankruptcy Code. During the gap, after the creditors had filed their petition but before the court had ordered relief, the directors of the debtor substantially increased salary and severance benefits for the three principal officers. Two of the three directors were among the officers. Fifty-nine days after approving the new employment contracts, the debtor asked for court approval. More than four months later, the bankruptcy court approved the revised…