Are there any options to stop, or delay, this order(withdraw personal BK, Put the business into Chapter 11), and pay all current balances?
A: The trustee cannot "order" the property turned over. The trustee would have to sue the S Corporation and prove a "preference" or "fraudulent" transfer has occurred with regard to the property demanded. Sometimes the trustee will not sue, if he/she doesn't believe that the property has sufficient value to pay creditors plus the attorney's fees necessary to litigate the matter. However, there's no way to know this, without calling the trustee' bluff.
The next alternative is to ask the court to dismiss the Chapter 7
. The court will only dismiss if there is no prejudice to the debtor's creditors -- so, if the goal here is to simply stall off the inevitable seizure and sale of the equipment, then trying to dismiss may be a fruitless effort.
The final option, conversion to Chapter 11, must also be made upon motion to the court, and must also not be intended to somehow prejudice creditor rights, e.g., if the debtor is likely to be unable to confirm a Chapter 11 plan, then there is no reason to convert, so the conversion will be denied by the court.
Also, Chapter 11 is expensive to administrate. It could easily burn $25,000 per year in legal fees and administrative costs. So, this must be considered in the calculus, because it may not be worth the effort.
However, if the business can pay its bills by getting rid of some unsecured debt, then Chapter 11 may be a viable solution.
Hope this helps.