DIM, Bankruptcy Judge
Voluntary dismissal of a Chapter XI proceeding was granted where all but one creditor had consented to the dismissal, and the dissenting creditor had been assured just compensation for its claims.
The petition originating the Chapter XI proceeding was filed pursuant to Bankruptcy Rule 11-6. Subsequetly, the debtorin-possession moved; under Bankruptcy Rule 11-42, for an order dismissing the pending Chapter XI proceeding. Upon the filing of a motion to dismiss a Chapter XI proceeding initiated pursuant to Rule 11-6, a bankruptcy court has the discretion to either dismiss the proceeding or adjudicate the debtor a bankrupt, whichever is in the best interest of the estate. The estate, which is to be considered by the court, consists of both the debtor and the creditors. Unless dismissal will cause some plain legal prejudice to the creditors, noted the court, it normally will be proper.
Among other things, the court found that an agreement between the debtor and a creditor-bank provided substantial benefits to the debtor and its creditors which would be lost if the Chapter XI proceeding is not dismissed. Similarly, the debtor's principal shareholders agreed that if the Chapter XI proceeding is dismissed they will not assert their claim against the debtor. The court also noted that consents to the dismissal had been obtained from all creditors who had filed claims against the debtor except one, and the dissenting creditor was assured that it would receive just compensation for its claims against the debtor. Accordingly, the Chapter XI proceeding was dismissed. See Bankruptcy Rule 11-42 at ¶ 20,742.