How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask socrateaser Your Own Question

socrateaser
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 34409
Experience:  Attorney and Real Estate Broker -- Retired (mostly)
10097515
Type Your Bankruptcy Law Question Here...
socrateaser is online now
A new question is answered every 9 seconds

My family is filling a Chapter 12 bankruptcy under a family

Resolved Question:

My family is filling a Chapter 12 bankruptcy under a family farm. All partners have signed the petition but one partner. That one partner is taking the others to court saying that it is an involuntary bankruptcy and under code section 303 that is not permitted in chapter 12. So the one partner is using this to get the bankruptcy thrown out. Can this one partner do this? Do all partners have to sign for a chapter 12 bankruptcy? Also not all partners signed the original loan so why would all need to sign the bankruptcy if that’s the law? The partner who is not signing is also one of the ones who signed for the loan.
Submitted: 1 year ago.
Category: Bankruptcy Law
Expert:  socrateaser replied 1 year ago.
My family is filling a Chapter 12 bankruptcy under a family farm. All partners have signed the petition but one partner. That one partner is taking the others to court saying that it is an involuntary bankruptcy and under code section 303 that is not permitted in chapter 12. So the one partner is using this to get the bankruptcy thrown out. Can this one partner do this? Do all partners have to sign for a chapter 12 bankruptcy?

A: If your partnership is a "general partnership," i.e., a partnership in which all partners have equal management powers, because either there is an agreement granting such powers, or no written agreement at all, then the answer is "yes." Under California law, all members of a general partnership must consent to acts done outside of the ordinary course of business -- which would include a bankruptcy petition. Cal. Corps. Code § 16301(2).

Also not all partners signed the original loan so why would all need to sign the bankruptcy if that’s the law?

A: See above.

I wish I had a workaround for you -- but, if there is no partnership agreement which limits management powers to those who have agreed to the bankruptcy, then the bankruptcy court will be forced to dismiss the petition.

Please let me know if I can clarify or be of further assistance.

Customer: replied 1 year ago.

 


This bankruptcy is filed in Oregon not California. Also not all the partners have the same amount of interest in the farm. Some have more shares then others.

Expert:  socrateaser replied 1 year ago.
My apologies, re California. However, Oregon law is in accord. ORS 67.090(2) provides that all partners must agree to any partnership act not in the "ordinary course of business."

Concerning separate shares, please tell me, is this partnership a general partnership (not registered with the state, or a registered LP, LLP or LLC?

Thanks in advance.
Customer: replied 1 year ago.

 


It is a general partnership. If the bankruptcy is void because one partner did not sign wouldn’t that make the loan void because not all partners signed? I’m just confused why all would have to sign for the bankruptcy but not the loan.

Expert:  socrateaser replied 1 year ago.
It is a general partnership. If the bankruptcy is void because one partner did not sign wouldn’t that make the loan void because not all partners signed?

A: A loan is a contract between a lender and a borrower. A borrower who accepts the benefits of a contract (the loan proceeds), and pays according to the contract's terms (even for a short period of time), impliedly accepts the contract under which the benefits are promised, (i.e., an implied-in-fact contract). Similarly, accepting the proceeds of the loan and never making a payment, even without the consent of the partners, could create an "implied-in-law" contract, which is a contract created by law to avoid the unjust enrichment of one party at another's expense. Here again, accepting the loan proceeds can be used to imply the existence of a contract, even without any express consent.

A bankruptcy petition is not a contract. It is a right, guaranteed by the U.S. Constitution, and implemented by Congressional Acts, and federal court interpretation. Bankr. Code Section 1221 requires that a Chapter 12 petition must be voluntary. A voluntary act of a partnership, not in the ordinary course of business requires the consent of all partners, under ORS 67.090(2).

Once again, I realize that my finding no clear workaround may be untenable, but I cannot change the law. If, for example, you could show that your respective shares were intended to provide proportionate voting rights, and the majority of shares have voted for bankruptcy, then that would permit you to file the bankruptcy. Otherwise, each partner has equal rights in the management and conduct of the partnership business. ORS 67.140(7).

Hope this helps.
socrateaser, Attorney
Category: Bankruptcy Law
Satisfied Customers: 34409
Experience: Attorney and Real Estate Broker -- Retired (mostly)
socrateaser and other Bankruptcy Law Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
< Last | Next >
  • Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises! Gary B. Edmond, OK
  • My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer. Eric Redwood City, CA
  • I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight. Michael Wichita, KS
  • PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent. Three H. Houston, TX
  • Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!! Elaine Atlanta, GA
  • It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem. Tony Apopka, FL
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
 
 
 

Meet The Experts:

 
 
 
  • FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
< Last | Next >
  • http://ww2.justanswer.com/uploads/FL/FLAandNYLawyer/2012-1-27_14349_3Fotolia25855429M.64x64.jpg FiveStarLaw's Avatar

    FiveStarLaw

    Attorney

    Satisfied Customers:

    3203
    Bankruptcy Lawyer. Experienced.
  • http://ww2.justanswer.com/uploads/TL/tleeders/2012-6-13_204815_TSL1.64x64.jpg Terry L.'s Avatar

    Terry L.

    Attorney

    Satisfied Customers:

    2204
    Better Business Bur 15yrs bankruptcy experience. Chicago Bar
  • http://ww2.justanswer.com/uploads/mnphillips2/2009-03-13_203105_10984459-249293407.jpeg Phillips Esq.'s Avatar

    Phillips Esq.

    Attorney-at-Law

    Satisfied Customers:

    950
    B.A.; M.B.A.; J.D.
  • http://ww2.justanswer.com/uploads/CO/cortrightlaw/2011-12-5_4117_Kevin.64x64.JPG cortrightlaw's Avatar

    cortrightlaw

    Attorney

    Satisfied Customers:

    490
    Attorney practicing Bankruptcy Law including Chapter 7, Chapter 11, Chapter 12, and Chapter 13.
  • http://ww2.justanswer.com/uploads/Jay1968/2006-12-03_004423_JoeRossPhoto.jpg JoeLawyer's Avatar

    JoeLawyer

    Attorney

    Satisfied Customers:

    376
    Attorney in the practice of Bankruptcy Law since 1996
  • http://ww2.justanswer.com/uploads/DY/Dylatess/2012-9-11_1968_BHBTemplePhoto.64x64.jpg dylatess's Avatar

    dylatess

    Attorney

    Satisfied Customers:

    370
    35 plus years of experience specializing in bankruptcy law
  • http://ww2.justanswer.com/uploads/US/USLawAnswers/2012-9-20_23143_20090105211638Headshot3b.64x64.jpg Brent Blanchard's Avatar

    Brent Blanchard

    Bankruptcy Attorney

    Satisfied Customers:

    315
    Twelve years experience in all aspects of debtor & creditor BK.
 
 
 

Related Bankruptcy Law Questions