MEMORANDUM OPINION DENYING MOTION OF 4H CONSTRUCTION CORPORATION, AN UNSECURED CREDITOR, FOR DISMISSAL OF DEBTOR’S CHAPTER 11 BANKRUPTCY CASE
On May 21, 2010, this matter came before the Court for hearing (the “Hearing”) on the Motion of 4H Construction Corporation, an Unsecured Creditor, for Dismissal of Debtor’s Chapter 11 Bankruptcy Case (the “Motion for Dismissal”) (Dkt. # 64) filed by 4H Construction Corporation (“4H Construction”) and the Objection and Memorandum Brief in Opposition to Motion of 4H Construction Corporation, an Unsecured Creditor, for Dismissal of Debtor’s Chapter 11 Bankruptcy Case (the “Objection and Memorandum Brief’) (Dkt. # 83) filed by the Debtor, Superior Boat Works (“Superior”), in the above-styled chapter 11 proceeding. At the Hearing, J. Rabun Jones, Jr. represented 4H Construction, and William R. Armstrong, Jr. represented Superior. After the Hearing, Superior submitted Debtor’s Supplemental Brief in Opposition to Motion to Dismiss filed by 4H Construction Corporation (“Superior’s Supplemental Brief’) (Dkt. # 88) and 4H Construction submitted 4H Construction Corporation’s Supplemental Brief in Support of Motion to Dismiss (“4H Construction’s Supplemental Brief’) (Dkt. # 93). The Court, having considered the pleadings and briefs as well as the arguments of counsel present at the Hearing, finds that the Motion for Dismissal is not well-taken and should be denied as set forth herein. Specifically, the Court finds as follows: 1
*880 Jurisdiction
This Court has jurisdiction over the parties and the subject matter of this proceeding pursuant to 28 U.S.C. § 1334. This is a core proceeding under 28 U.S.C. § 157(b)(2)(A) and (0). Notice of the Hearing was proper under the circumstances.
Facts
Superior was administratively dissolved on December 30, 2003, pursuant to Miss. Code Ann. § 79-4-14.20. The former Miss. Code Ann. § 79-4-14.22 allowed a dissolved corporation to seek administrative reinstatement within five years of the effective date of dissolution. Superior filed for relief under the Bankruptcy Code on November 6, 2009, well after the five-year period for administrative reinstatement had expired. 4H Construction filed its Motion for Dismissal on April 22, 2010. The basis of 4H Construction’s Motion for Dismissal is that Superior had no authority to file a chapter 11 bankruptcy petition since it had no authority to reinstate as a viable corporate entity under Mississippi law. Miss.Code Ann. § 79-4-14.22 was revised as of July 1, 2009, to allow a dissolved corporation to seek reinstatement at any time after the effective date of dissolution. See, 2009 Miss. Laws Ch. 527 (H.B. 515) and 2009 Miss. Laws Ch. 530 (S.B. 3060). As discussed later, this Court finds that neither version applies to this inquiry. 2
Issue
May a corporation that has been administratively dissolved pursuant to Mississippi law file a chapter 11 petition to liquidate when the statutory period for administrative reinstatement has run?
Discussion
Superior is not seeking reinstatement under Mississippi law, nor is it seeking to reorganize under chapter 11. Superior is seeking solely to liquidate through chapter 11 proceedings. The Fifth Circuit has expressly recognized that liquidation is an appropriate use of chapter 11.
Sandy Ridge Dev. Corp. v. Louisiana Nat’l Bank (In re Sandy Ridge Dev. Corp.),
State law, however, controls the question of whether a corporation has capacity to file a petition under the Bankruptcy Code.
Chicago Title & Trust Co. v. Forty-One Thirty-Six Wilcox Bldg. Corp.,
*881
(1) Collecting its assets;
(2) Disposing of its properties that will not be distributed in kind to its shareholders;
(3) Discharging or making provision for discharging its liabilities;
(4) Distributing its remaining property among its shareholders according to their interests; and
(5) Doing every other act necessary to wind up and liquidate its business and affairs.
The statute further provides that “[dissolution of a corporation does not ... prevent commencement of a proceeding by or against the corporation in its corporate name.” Miss.Code Ann. § 79-4-14.05(b) (1972). The statute uses the word “including” before listing possible actions a corporation may pursue, suggesting that the list is not exclusive. This point is further supported by the catch-all provisions of subsection five allowing a dissolved corporation to pursue “every other act necessary to wind up and liquidate its business and affairs.” Miss.Code Ann. § 79-4-14.05(a)(5) (1972).
I. Dissolved Corporations May Liquidate Through Chapter 11
While no Mississippi case
3
exists that speaks to the eligibility of a dissolved corporation to seek relief under chapter 11, there are cases from states with laws similar to Mississippi that address this question. Case law from Indiana, Arizona, and Delaware (applying Wyoming law) is particularly persuasive as these states all have statutes that are similar, if not identical to Mississippi, and bankruptcy courts in these states have addressed the issue of eligibility of a dissolved corporation to liquidate pursuant to the Bankruptcy Code.
See In re Tri-Angle Distributors, Inc.,
In
Tri-Angle Distributors,
the bankruptcy court found that a dissolved corporation retains capacity to file a chapter 7 petition for the purpose of winding up and liquidating its business and affairs under Indiana law.
When faced with determining a dissolved corporation’s eligibility to file a chapter 11 petition, the
Prism Properties
court found that liquidation through chapter 11 proceedings would be permissible for a dissolved corporation.
As Superior pointed out in its Supplemental Brief, the Prism Properties decision also suggests that a dissolved corporation’s ability to reinstate is irrelevant as to whether the dissolved corporation may pursue liquidation through bankruptcy. Id. Footnote two indicates that any applicable reinstatement statute that could possibly be applied to the facts would have provided for either a six month or a three year period to reinstate, and regardless of which law applied, the debtor would not be able to reinstate. Id. Following this logic would render the five-year period for administrative reinstatement in the former Miss.Code Ann. § 79-4-14.22 completely inapplicable regarding a dissolved corporation’s ability to liquidate through bankruptcy.
In
15375 Memorial Corp.,
the bankruptcy court discussed a dissolved corporation’s ability to file chapter 11 under applicable Wyoming law. The court found that where state laws permit a dissolved corporation to remain in existence for the limited purpose of winding up its affairs, the dissolved corporation should be eligible to liquidate through bankruptcy.
Tri-Angle Distributors, Prism Properties, and 15375 Memorial Corp. all involve state statutes that are similar, if not identical, to the Mississippi statutes applicable to this issue. This Court is persuaded that statutory language authorizing a dissolved corporation to do “every other act necessary to wind up and liquidate its business affairs” must include liquidating through bankruptcy proceedings regardless of whether the dissolved corporation has statutory authority to reinstate.
II. 4H Construction’s Misplaced Reliance on Gas Pump
4H Construction relies primarily on
Gas Pump
for the proposition that an administratively dissolved corporation does not have the capacity to initiate any action, including bankruptcy. The
Gas Pump Inc. v. Gen. Cinema Beverages of North Florida, Inc.,
III. Reconciling Decisions from the Second Circuit and Courts Within the Second Circuit Regarding the Capacity of Dissolved Entities to File Chapter 11
Decisions from the Second Circuit and the Bankruptcy Court for the Southern District of New York also provided guidance, however decisions from these courts do not conclusively indicate a clear consensus regarding chapter 11 filings by dissolved corporations and/or partnerships. In an effort to reconcile five noteworthy cases from these courts, the Court finds it most appropriate to discuss the cases in chronological order.
In 1985, the Second Circuit held that a Connecticut corporation that had been administratively dissolved was eligible to liquidate under chapter 11 and rejected the notion that a dissolved corporation lacked capacity to commence a voluntary bankruptcy proceeding.
New Haven Radio, Inc. v. Meister (In re Martin-Trigona),
In 1988, the issue of a dissolved corporation’s eligibility for chapter 11 was again before the Second Circuit. The appellate court found that a dissolved corporation was eligible to reorganize under chapter 11 despite having been dissolved six years prior to its filing.
Cedar Tide Corp. v. Chandler’s Cove Inn, Ltd. (In re Cedar Tide Corp.),
After
Cedar Tide,
the Second Circuit had determined that a dissolved corporation was eligible to file chapter 11 seeking either liquidation or reorganization.
Cedar Tide,
When faced with its next question of eligibility, the Second Circuit held that a dissolved New York partnership was not eligible for chapter 11 relief.
C-TC 9th Ave. P’ship v. Norton Co. (In re C-TC 9th Ave.
P’ship),
Before
Hagerstown
and a few months after
C-TC,
the Bankruptcy Court for the Southern District of New York ruled that a dissolved partnership is eligible for chapter 11 relief in New York when the relief sought is liquidation.
In re Shea & Gould,
After the
C-TC
court held that a dissolved partnership was ineligible for reorganization under chapter 11 and the
Shea & Gould
court held that a dissolved partnership was eligible for liquidation under chapter 11, the Bankruptcy Court for the Southern District of New York was again faced with the issue of a dissolved partnership filing a chapter 11 in
Hagerstown.
The bankruptcy court issued its first opinion in
Hagerstown
on August 24, 1998. This opinion followed
C-TC
in finding that a dissolved partnership is ineligible to file chapter 11 for the purpose of reorganization.
In re Hagerstown Fiber Ltd. P’ship,
Months later, on November 3, 1998, the bankruptcy court in
Hagerstown
granted a motion for reargument and reconsidered the aspect of its earlier decision stating that a dissolved partnership had the ability to liquidate through chapter 11 proceedings pursuant to
Shea & Gould. Hagerstown,
The cases from the Second Circuit and the bankruptcy courts within the Second Circuit support the following conclusions: (1) a dissolved corporation may pursue liquidation through chapter 11 proceedings as a means of winding up its corporate affairs.
Martin-Trigona,
However, as the Bankruptcy Court for the Northern District of Texas has noted, nothing from the Fifth Circuit (or Texas partnership law) suggests that a dissolved partnership would be prevented from liquidating through chapter 11 proceedings.
In re StatePark Bldg. Group, Ltd.,
Conclusion
This Court is persuaded by the line of cases that leaves the door to bankruptcy open for dissolved corporations in pursuit of their statutory duty to wind up and liquidate business affairs. The Court finds the ability of Superior to reinstate as a viable corporation to be irrelevant to its ability to liquidate through a chapter 11 proceeding. Mississippi statutes provide dissolved corporations broad discretion to wind up, and nothing in Mississippi’s statutory scheme suggests that reinstatement must be available before a corporation can do “every other act necessary to wind up and liquidate its business and affairs.” Miss.Code Ann. § 79^4 — 14.05(a)(5). Liquidation through bankruptcy is consistent with Mississippi laws and therefore remains a viable option for dissolved corporations in this state.
For the reasons stated herein, the Court finds that the Motion for Dismissal is not well-taken and should be denied. A separate order consistent with this Memorandum Opinion will be entered by the Court on accordance with Bankruptcy Rules 7054 and 9014.
Notes
. The following constitutes the findings of fact and conclusions of law of the Court pursuant to Federal Rule of Bankruptcy Procedure 7052 and 9014.
. At the Hearing, Mr. Armstrong alluded to the fact that dissolved corporations which had been denied administrative reinstatement by the Secretary of State could have the denial reviewed by the Chancery Court of the First Judicial District of Hinds County or the chan-eery court of the county where the corporation was domiciled. See Miss.Code Ann. § 79-4-14.23. This Court finds that this statute also is inapplicable to this inquiry for the same reasons set forth herein.
. This Court, therefore, has considered the rules of statutory construction and the various factors for making an
Erie
guess listed in cases such as
Hodges v. Mack Trucks, Inc.,
. The Fifth Circuit has expressly recognized that liquidation through a chapter 11 is proper.
Sandy Ridge,