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IN RE SILBERKRAUS

Nos. 01-56992, 01-56994.

336 F.3d 864 (2003)

In re Fred Lawrence SILBERKRAUS, Debtor, Debtor, Thomas W. Dressler; Dressler Rein Evans & Sestanovich LLP, now known as Rein Evans & Sestanovich LLP, Appellants, v. The Seeley Company, Appellee. In re Fred Lawrence Silberkraus, Debtor, Debtor, Thomas W. Dressler; Dressler Rein Evans & Sestanovich Llp, now known as Rein Evans & Sestanovich LLP, Appellants, v. L.E. Coppersmith Inc., Appellee.

United States Court of Appeals, Ninth Circuit.

Filed July 10, 2003.

Attorney(s) appearing for the Case

Thomas W. Dressler, Dressler & La Vina LLP, Los Angeles, CA, argued the cause for the appellants. Dennis McPhillips was on the briefs.

Joseph A. Eisenberg, Jeffer, Mangels, Butler & Marmaro LLP, Los Angeles, CA, argued the cause for the appellees. Michael I. Gottfried and Thomas M. Geher, Jeffer, Mangels, Butler & Marmaro LLP, and Abraham M. Rudy and Julie B. Waldman, Weissmann, Wolff, Bergman, Coleman, Silverman & Holmes LLP, Beverly Hills, California, were on the briefs.

Before: REINHARDT, O'SCANNLAIN, and PAEZ, Circuit Judges.

OPINION

O'SCANNLAIN, Circuit Judge.

We must decide whether the bankruptcy court abused its discretion in imposing sanctions upon counsel for filing a Chapter 11 petition with the improper purpose of delaying state court litigation of a commercial dispute.

I

In 1994, Fred Lawrence Silberkraus (the "Debtor") and L.E. Coppersmith, Inc. ("Coppersmith") entered into a five-year lease agreement for a 75,000 square foot industrial building located...

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