Facts

South Edge LLC developed a master-plan community, "Inspirada," taking out credit of over $365 million in principal and interest from JPMorgan Chase Bank, as well as co-lenders Wells Fargo Bank and Credit Agricole Corporate and Investment Bank (collectively, banks). South Edge defaulted in early 2008, and ceased the development of Inspirada.

PLANITIFF'S CONTENTIONS:
The banks petitioned for an involuntary Chapter 11 bankruptcy against South Edge, alleging South Edge failed to make timely payment since March 2008. The banks further contended that South Edge mismanaged the project to the detriment of itself, and its creditors. The banks further alleged that management had not undertaken any efforts to resume the project, obtain proceeds, or renegotiate agreements.

Result

The court granted the banks' involuntary petition and directed appointment of a trustee.