Case Summary:
Partnership which had been previously dissolved by the agreement of the partners filed bankruptcy.  The primary secured creditor moved to dismiss the case, contending that (i) a dissolved partnership was not eligible to proceed under chapter 11 or 12, and (ii) that the individual partners’ own prior bankruptcies prevented them from acting on behalf of the partnership.  The court found that at least in the context of a family farm partnership operated solely by a husband and wife, the dissolution did not necessarily terminate the business operation or mandate that the partnership “wind up” its affairs.  Rather, the agreement of the partners dictates whether the partnership can continue reorganization efforts.  Likewise, while state law would normally preclude a bankrupt partner from acting on behalf of the partnership, the partners can agree otherwise.  The motion to dismiss was denied.

Statue/Rule References:
11 U.S.C. § 1208(c) -- Dismissal
Wis. Stat. § 178.03 -- Partnership
Wis. Stat. § 178.25(2) -- Dissolution of Partnership

Key Terms:
Dismissal
Partnerships