492 B.R. 545
Bankr. D. Or.2013Background
- Probated chapter 12 case filed by Loverin Ranch on November 19, 2012; Carrington filed a Motion to Dismiss on March 22, 2013 seeking dismissal for lack of proper authorization.
- Loverin Ranch’s Plan was filed February 19, 2013, with a confirmation hearing set for April 1, 2013.
- Carrington argued Loverin Ranch, as an Oregon partnership, required unanimous partner consent to file for bankruptcy and not all partners consented.
- Partnership type was disputed; no Oregon limited partnership certificate was filed, so the court treated Loverin Ranch as an Oregon general partnership.
- Resolutions purporting to authorize the filing were dated November 19, 2012 and signed by Lynne, but no minutes or prior documented approvals were shown.
- One partner, Lee, testified he did not consent to the Chapter 12 filing; the court found not all partners consented.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Loverin Ranch properly authorized the Chapter 12 filing | Carrington argues unanimous consent required. | Loverin Ranch contends majority/partner action suffices under partnership provisions. | Not properly authorized; motion granted. |
| Whether Oregon partnership law requires unanimous consent for acts outside ordinary course | Unanimous consent is required for outside ordinary course actions. | Conduct patterns may reflect approved authority. | Unanimous consent required; majority consent insufficient. |
| Whether the Partnership Agreement authorizes outside ordinary course decisions by majority vote | Agreement implies broad majority voting power. | No explicit provision granting majority vote for bankruptcy filing. | No explicit authorization; insufficient to justify majority action. |
Key Cases Cited
- Goldberg v. Rose (In re Cloverleaf Properties), 78 B.R. 242 (9th Cir. BAP 1987) (addressed unanimous consent for partnership bankruptcy filings prior to 2002)
- In re Century/ML Cable Venture, 294 B.R. 9 (Bankr.S.D.N.Y. 2003) (discussed Rule 1004 amendments and filing authority for partnerships)
- In re SWG Assocs., 199 B.R. 557 (Bankr.W.D. Pa. 1996) (noted that a partnership filing is outside ordinary course of business)