QUOTE (otakusensei @ May 21 2010, 03:14 PM)
![*](http://forums.dumpshock.com/style_images/greenmotiv/post_snapback.gif)
So that number looks like an absolute then? In that case either one of the creditors could sue again if any one of them settled and was no longer a creditor, right? Or do they only have to state 12 just to clarify for purposes of determining the number of creditors required to bring action?
This was apparently just to establish that the debtor has more than 12 creditors. When a person has more than 12 creditors, at least three creditors with qualifying claims must join a petition to involuntarily move them into bankruptcy. In theory, a debtor with more than 12 creditors can defeat a petition by knocking out petitioning creditors until fewer than three remain. That general principle is subject to some qualifiers and may or may not actually bear on IMR's case, but that's why you're seeing the number 12 kicked around.
QUOTE (Mesh @ May 21 2010, 03:27 PM)
![*](http://forums.dumpshock.com/style_images/greenmotiv/post_snapback.gif)
Looks like the 12 creditor issue is IMR's attempted defense. 12+ creditors requires 3+ petitioners to bankrupt them. So IMR is trying to say some of those 3 petitioners don't have a legitimate creditor claim. If successful, the petition to bankrupt them fails.
I wonder if that could backfire. IMR proves two of the three are not creditors thereby lowering their total creditors to less than 12. This changes the requirement to only one petitioner which leaves them more definitively vulnerable to being bankrupted.
There's a difference between demonstrating someone isn't a creditor (you really don't owe them any money) and that someone's a creditor whose claim isn't of the sort that allows them to petition for an involuntary bankruptcy.
You build a house for me. We have no written contract. There's just an oral agreement that you're to be paid on a sliding scale based on when the house is "complete." You finish it, but I think the work is sub-par and refuse to move in until you make some changes. You do, even though you think the house was fine originally, but I still don't pay. I definitely owe you money . . . but we disagree about when/whether the house was "complete" and, as a result, what you're owed. If the court thinks there's a
bona fide dispute as to the amount owed, you're going to have to resolve the dispute somehow - suing, settling, something - before you can pursue the bankruptcy [this is a massively oversimplified example; assume I'm otherwise a viable involuntary bankruptcy target b/c I'm not paying other bills, etc. etc. etc.]
You're right to identify that the number of creditors can move around, though. There are situations in which people don't count. If they're given preferential payments to convince them not to join a petition, if they're employees or insiders, etc. It's certainly possible for someone to owe money to 20 people and end up being subject to a single-party involuntary bankruptcy because a number of the folks owed end up being classified as employees, because they were bought off with partial payments, or some such.
STANDARD QUALIFIER: I'm commenting generally and not with respect to the Wildfire/IMR case.