Scott Michael Leonard

IN THE UNITED STATES BANKRUPTCY COURT
FOR THE NORTHERN DISTRICT OF OKLAHOMA
IN RE:
SCOTT MICHAEL LEONARD
Debtor.
Case No. 25-10219-T
Chapter 11
ORDER CONVERTING CASE TO A CASE UNDER CHAPTER 7
This matter comes before the Court pursuant to the Motion to Convert Case to a Case under
Chapter 7 (the “Chapter 11 Conversion Motion”) 1 filed by Lakeside Bank of Salina, Oklahoma;
Bank 	of 	Commerce, 	Chouteau, 	Oklahoma; 	and 	American 	National 	Bank 	of 	Oklahoma,
Collinsville, Oklahoma (collectively, the “Banks”); the Supplemental Authority in Support of the
Motion (the “Supplement”), filed by the Banks; 2 and a Response 3 filed by Scott Michael Leonard
(“Debtor”). 	An evidentiary hearing was held in this matter on January 9, 2026, after which the
Court took the Chapter 11 Conversion Motion and Response under advisement. 	The following
findings of fact and conclusions of law are made pursuant to Federal Rule of Bankruptcy Procedure
7052 and Federal Rule of Civil Procedure 52.
Jurisdiction
The Court has jurisdiction over this bankruptcy case pursuant to 28 U.S.C. § 1334(b). 4
Reference to the Court of the bankruptcy case is proper pursuant to 28 U.S.C. § 157(a). Matters
concerning the administration of the estate are core proceedings as defined by 28 U.S.C.
§ 157(b)(2)(A).
1 ECF No. 134.
2 ECF No. 145.
3 ECF No. 147.
4 Unless otherwise noted, all statutory references are to sections of the United States
Bankruptcy Code, 11 U.S.C. § 101 et seq.
T
Filed/Docketed
Jan 13, 2026
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Findings of Fact
The Court makes the following findings of fact:
1. 	Debtor filed this Chapter 13 case on February 24, 2025 (the “Petition Date”). He was
represented by attorney Ron Brown (“Brown”).
2. 	The Banks sought conversion of Debtor’s bankruptcy case to a case under Chapter 7 of
the Bankruptcy Code (the “Chapter 13 Conversion Motion”). 5 Debtor objected. 6
3. 	The Banks and Debtor agreed to submit stipulated facts and briefing to the Court on
the issues contained in the Chapter 13 Conversion Motion, and forgo additional
evidentiary hearing. 7
4. 	On June 30, 2025, the Court found Debtor was not eligible under § 109(e) to proceed
under Chapter 13 of the Bankruptcy Code (the “Chapter 13 Conversion Opinion”). 8
The Court then set the issue of whether the case should be converted or dismissed for
further hearing. 	Before that hearing took place, Debtor filed a Motion to Convert a
Case Under Chapter 13 to a Case Under Chapter 11. 9
5. 	Finding no objection, on September 4, 2025, the Court entered an Order Converting
Case to Chapter 11 (the “Chapter 13 Conversion Order).” 10 That Order contained the
following language:
a. 	IT IS THEREFORE, ORDERED, ADJUDGED AND DECREED by the
Court that this case is hereby converted to chapter 11. Debtor shall have 7
days from the date of conversion to file an Amended Voluntary Petition in
this case.11
6. 	On September 30, 2025, Debtor filed an Amended Petition in this case, which
designated that Debtor would proceed under Chapter 11 of the Bankruptcy Code.
Debtor also indicated he was a small business debtor and elected to proceed under
Subchapter V of Chapter 11. 12
5 ECF No. 14.
6 ECF No. 22.
7 Agreed Scheduling Order, ECF No. 29.
8 ECF No. 51. Additional background facts regarding the relationship between Debtor and
the Banks can be found in the Chapter 13 Conversion Opinion.
9 ECF No. 64.
10 ECF No. 70.
11 Id.
12 ECF No. 81, at 4 ¶13.
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7. 	On November 6, 2025, Brown moved to withdraw as Debtor’s counsel. 13 Finding no
objection, Brown was allowed to withdraw as of November 25, 2025. 14
8. 	On November 24, 2025, the Bank filed the Chapter 11 Conversion Motion. 	The
Supplement was filed on December 11, 2025. Debtor, appearing pro se, filed the
Response on December 18, 2025.
9. 	On December 22, 2025, the Court held a preliminary hearing regarding the Chapter 11
Conversion Motion. Banks appeared by counsel and Debtor appeared pro se.
10. On January 9, 2026, the Court held a final hearing regarding the Chapter 11 Conversion
Motion (the “Final Hearing”). Again, Banks appeared by counsel and Debtor appeared
pro se. Debtor indicated he had hired counsel the day before, but no counsel attended
the hearing or entered an appearance on the case docket of the Court’s CM/ECF
System.
11. At the Final Hearing, Debtor made an oral motion to continue the hearing to allow time
for his newly hired counsel to enter an appearance and become familiar with the case.
The Court determined that Debtor was given sufficient notice of the date and time of
the scheduled hearing and denied the motion. 15
12. On January 12, 2026, Dana Gerian of Dana Law, Inc. entered an appearance on behalf
of Debtor on the case docket. 16
13. As of the date of this opinion, no plan has been filed in this case.
To the extent the “Conclusions of Law” contain any items that should more appropriately
be considered “Findings of Fact,” they are incorporated herein by this reference.
13 ECF No. 123.
14 ECF No. 138.
15 The Court notes that upon receipt of a motion to convert or dismiss a case filed under
§ 1112,
The court shall commence the hearing on a motion under this subsection not later
than 30 days after filing of the motion, and shall decide the motion not later than
15 days after commencement of such hearing, unless the movant expressly consents
to a continuance for a specific period of time or compelling circumstances prevent
the court from meeting the time limits established by this paragraph.
§ 1112(b)(3).
16 ECF No. 160.
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Conclusions of Law
The issue before the Court is whether cause has been shown to convert the Debtor’s
bankruptcy case from Chapter 11 to Chapter 7. The burden of proof is on the movant to
demonstrate that one of the enumerated grounds for dismissal or conversion under § 1112(b) has
been met by a preponderance of the evidence. 17 The Chapter 11 Conversion Motion is brought
under § 1112 of the Bankruptcy Code, which provides in relevant part:
on request of a party in interest, and after notice and a hearing, the court shall
convert a case under this chapter to a case under chapter 7 or dismiss a case under
this chapter, whichever is in the best interests of creditors and the estate, for cause
unless the court determines that the appointment under section 1104(a) of a trustee
or an examiner is in the best interests of creditors and the estate. 18
The term “cause” includes the following non-exclusive list:
(A) substantial or continuing loss to or diminution of the estate and the absence of a
reasonable likelihood of rehabilitation;
(B) gross mismanagement of the estate;
(C) failure to maintain appropriate insurance that poses a risk to the estate or to the public;
(D) unauthorized use of cash collateral substantially harmful to 1 or more creditors; and
(J) failure to file a disclosure statement, or to file or confirm a plan, within the time fixed
by this title or by order of the court[.] 19
Absent a finding of unusual circumstances, which is not applicable to this case, a finding of cause
mandates this court to either convert or dismiss the case, whichever is in the best interests of the
creditors and the estate. 	However, whether cause exists under § 1112(b), and if so, whether to
dismiss or convert the case are questions left to the sound discretion of the bankruptcy court. 20 In
17 In re Creekside Senior Apartments, L.P., 489 B.R. 51, 60 (6th Cir. BAP 2013).
18 § 1112(b)(1).
19 § 1112(b)(4).
20 In re Miell, 419 B.R. 357, 366 (Bankr. N.D. Iowa 2009); In re BTS, Inc., 247 B.R. 301,
309 (Bankr. N.D. Okla. 2000).
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determining whether cause exists to convert or dismiss a case under § 1112(b), a court must engage
in a case-specific factual inquiry that focuses on the circumstances of each debtor. 21
Debtor has elected to proceed under Subchapter V of Chapter 11, making §§ 1181-1195
applicable to this case. Section 1189 establishes a deadline for the debtor to file a plan as being
“not later than 90 days after the order for relief under this chapter, except that the court may
extend the period if the need for the extension is attributable to circumstances for which the debtor
should not justly be held accountable.” 22 Section 348 addresses the effect of the conversion of a
case from one chapter to another:
Conversion of a case from a case under one chapter of this title to a case under
another chapter of this title constitutes an order for relief under the chapter to
which the case is converted, but, except as provided in subsections (b) and (c) of
this section, does not effect a change in the date of the filing of the petition, the
commencement of the case, or the order for relief. 23
The Chapter 13 Conversion Order was entered on September 4, 2025, making that the date of the
order for relief under Chapter 11 in this case. Pursuant to the deadline established in § 1189(b),
Debtor had 90 days, or until December 4, 2025, to timely file a plan in this case. 24 No such plan
was filed. 25 	Failure to file a plan within the time fixed by § 1189(b) constitutes cause under
21 United Sav. Ass’n of Texas v. Timbers of Inwood Forest Assocs., Ltd. (In re Timbers of
Inwood Forest Assocs., Ltd.), 808 F.2d 363, 371-72 (5th Cir. 1987), aff’d 484 U.S. 365 (1988); In
re Creekside Senior Apartments, L.P., 489 B.R. at 60.
22 § 1189(b) (emphasis added).
23 § 348(a) (emphasis added).
24 The Banks make an argument that the time to file a plan under § 1189(b) had already
expired at the time of the conversion of Debtor’s case to Chapter 11. Because the time to file a
plan under § 1189(b) has expired, and cause is shown under § 1112(b)(4)(J), the Court will not
address the Banks’ argument.
25 The Court notes it appears Debtor has a “plan” in the conceptual sense of a design,
proposal, or idea, in which he will sell various assets and pay various debts. See e.g., Response, at
ECF No. 147. But there is no plan filed in the case that conforms to the requirements of § 1123 or
that could be considered for confirmation under § 1129(a).
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§ 1112(b)(4)(J) to convert or dismiss this case. Therefore, the Court finds the Banks have met their
burden to show cause under § 1112(b) to convert or dismiss this case.
The next question is whether to convert or dismiss the case. The Banks request that the
case be converted to Chapter 7 so that a trustee may be appointed to administer the substantial
assets of the Debtor. No party has advocated dismissal of the case. 26 In the Chapter 13 Conversion
Opinion, this Court found Debtor owed at least $1,891,961.16 in noncontingent, liquidated secured
debt as of the Petition Date, and another $15,229.27 in unsecured debt. 27 Representatives of the
Banks testified at the January 9, 2026, hearing that creditors of the estate would be better served
by the conversion of the case to Chapter 7 and the appointment of a trustee to coordinate the
distribution of the substantial assets belonging to Debtor. The Court agrees.
Conclusion
The failure of Debtor to file a plan by the deadline established in § 1189(b) constitutes
cause under § 1112(b)(4)(J) to dismiss or convert this case. Pursuant to § 1112(b)(1), the Court
finds it to be in the best interests of creditors and the estate to convert this case to a case under
Chapter 7.
IT IS THEREFORE ORDERED that this case be, and the same hereby is, converted
to a case under Chapter 7 of the United States Bankruptcy Code. The Clerk of Court is
directed to give notice of the conversion as required under Federal Rule of Bankruptcy
Procedure 2002(f)(1)(B).
Dated this 13th day of January, 2026.
26 To the extent the Court can discern a request made by Debtor in the Response, it is that
he be given “time to resolve [his] debt.” ECF No. 147. Given the time constraints imposed on the
Court and the parties by §§ 1189(b) and 1112(b)(3) & (b)(4)(J) of the Bankruptcy Code, that is not
a request the Court has the discretion to grant.
27 ECF No. 51, at 4.
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