The court dismissed Bedmar's chapter 11 case after granting motions by Cobalt Propco 2020 LLC, the U.S. Trustee and the HCG Landlords, finding that Bedmar failed to prove the petition was filed in good faith and that the case did not serve a valid bankruptcy purpose. The dismissal opinion held that Bedmar was not in genuine financial distress and was formed and filed to use section 502(b)(6) to cap lease liabilities for the benefit of non-debtor affiliates and equity, not to preserve a business or maximize estate value.

The ruling cuts off Bedmar's prepackaged plan process and lease-rejection strategy. Bedmar had filed a plan and lease-rejection motion at the outset of the case, proposed to pay general unsecured claims in full after applying the lease-damages cap, and had drawn a $10 million parent-funded DIP before dismissal. For professionals tracking venue and two-step-style liability-management filings, the decision is a direct Delaware good-faith rejection of a newly formed debtor using chapter 11 primarily to alter lease economics.