FILED

United States Court of Appeals

Tenth Circuit

January 26, 2010

Elisabeth A. Shumaker

Clerk of Court

PUBLISH

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

In re: TRENTON J. BALDWIN, d/b/a

Cross-Triangle Brangus, d/b/a Spot

Light Flowers & Gifts, d/b/a With

Photography On The Side; CAROLYN

S. BALDWIN, a/k/a Carolyn S.

Bailey, d/b/a Borken Bow School of

Dance, d/b/a Spot Light Flowers &

Gifts,

Debtors.

___________________

GERALD R. MILLER, Trustee,

Plaintiff - Appellant,

v.

BILL AND CAROLYN LIMITED

PARTNERSHIP, an Oklahoma

Limited Partnership; THE MAXIE O.

“BILL” BAILEY LIVING TRUST;

MAXIE O. “BILL” BAILEY,

Defendants - Appellees,

and

TRENTON J. BALDWIN; CAROLYN

S. BALDWIN,

Defendants.

______________________________

No. 06-7083
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In re: TRENTON J. BALDWIN;

CAROLYN S. BALDWIN, a/k/a

Carolyn S. Bailey,

Debtors.

_____________________

BILL AND CAROLYN LIMITED

PARTNERSHIP, an Oklahoma limited

partnership; THE MAXIE O. “BILL”

BAILEY LIVING TRUST; MAXIE O.

“BILL” BAILEY, 

Appellants,

v.

GERALD R. MILLER, Trustee, 

Appellee.

No. 09-7004

No. 06-7083

APPEAL FROM THE UNITED STATES BANKRUPTCY 

APPELLATE PANEL FOR THE TENTH CIRCUIT

(BAP No. EO-05-114)

No. 09-7004

APPEAL FROM THE UNITED STATES DISTRICT COURT 

FOR THE EASTERN DISTRICT OF OKLAHOMA

(D.C. No. 08-CV-00254-RAW)

Ross A. Plourde (Drew D. Webb with him on the briefs) of McAfee & Taft,

Oklahoma City, Oklahoma, for Gerald R. Miller, Trustee.

Charles E. Wetsel of Robertson & Williams, Oklahoma City, Oklahoma, for Bill

and Carolyn Limited Partnership, the Maxie O. “Bill” Bailey Living Trust, and

Maxie O. “Bill” Bailey.
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Before KELLY, McKAY, and LUCERO, Circuit Judges.

McKAY, Circuit Judge.

These two consolidated appeals arise from separate adversary proceedings

in a Chapter 7 bankruptcy case. Both adversary proceedings involve the same

parties and relate to a family limited partnership in which Debtor Carolyn

Baldwin owned a 99% limited partnership interest at the time the bankruptcy

proceeding commenced. The parties have agreed on appeal that the bankruptcy

trustee stepped into the shoes of the debtor with respect to this partnership

interest and was entitled to assert whatever rights the limited partner had under

the partnership agreement. The question now before us is what exactly these

rights are. Specifically, we must decide whether the trustee has the right to seek

dissolution of or withdrawal from the partnership. We must also determine

whether the buy/sell offer made by the trustee based on a price of $3000 per

percentage point of partnership interest is valid and enforceable under the

partnership agreement’s withdrawal provision.

BACKGROUND

At the time she and her husband filed their bankruptcy petition in 2004,

Mrs. Baldwin was the sole limited partner of a family limited partnership created

by her father as an estate planning tool in 1994. The partnership’s sole general
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partner is a trust, consisting of Mrs. Baldwin’s parents as the sole trustees. When

the partnership was first formed, Mrs. Baldwin owned a 7.73993% limited

partnership interest, while her parents’ trust owned a 91.26007% limited interest

and a 1% general interest. Soon after the partnership’s creation, the general

partner assigned its entire limited interest to Mrs. Baldwin. Thus, at the time she

filed for bankruptcy, Mrs. Baldwin owned a 99% limited interest in the

partnership, while the general partner had a 1% general interest with exclusive

management and control rights. The partnership assets at the time of the

bankruptcy filing consisted of approximately 200 acres of undeveloped land and a

house—the debtors’ primary residence—that the partnership had constructed on

the land.

Following initiation of bankruptcy proceedings, the bankruptcy trustee filed

an adversary proceeding against the partnership and the general partner, seeking a

declaration that Mrs. Baldwin’s interest in the partnership now belonged to the

bankruptcy estate and that the partnership should be dissolved due to the general

partner’s refusal to recognize the bankruptcy estate’s interest. After a trial, the

bankruptcy court ruled in favor of the trustee on both of these issues and ordered

dissolution of the partnership. The Bankruptcy Appellate Panel affirmed the

bankruptcy court on the first issue but reversed as to dissolution, and the trustee

appealed the BAP’s reversal of the bankruptcy court’s dissolution order to this

court. We stayed any action in the appeal pending resolution of the second
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adversary proceeding, which was then ongoing in the bankruptcy court.

In the second adversary proceeding, the trustee sought to enforce a

withdrawal notice and buy/sell offer that he gave to the general partner following

the BAP’s ruling. In the buy/sell offer, the trustee offered to purchase the general

partner’s 1% partnership interest for $3000, payable immediately in cash, or to

sell the 99% limited partnership interest for $297,000, also payable immediately

in cash. The bankruptcy court held that this offer was valid and enforceable

under the partnership agreement, and the non-debtor Defendants—the limited

partnership, the general partner, and Mrs. Baldwin’s father—appealed. Pursuant

to 28 U.S.C. § 158(c)(1)(B), the trustee elected to have the appeal heard by the

district court. After the opening brief and response brief had been filed, but prior

to the deadline for filing a reply brief, the district court affirmed the bankruptcy

court’s ruling. Defendants subsequently filed a reply brief and motion for

rehearing. The district court then granted rehearing as to consideration of the

reply brief, denied rehearing on the merits, and affirmed the bankruptcy court. 

Defendants appealed, and we consolidated this appeal with the appeal from the

first adversary proceeding for purposes of argument and disposition.

DISCUSSION

In an appeal in a bankruptcy case, we independently review the bankruptcy

court’s decision, applying the same standard as the BAP or district court. See In

re Albrecht, 233 F.3d 1258, 1260 (10th Cir. 2000); Broitman v. Kirkman (In re
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Kirkland), 86 F.3d 172, 174 (10th Cir. 1996). We thus review the bankruptcy

court’s legal determinations de novo and its factual findings for clear error. In re

Kirkland, 86 F.3d at 174.

The parties have raised three main issues in these consolidated appeals. 

First, the trustee argues that the BAP erred in reversing the bankruptcy court’s

order of dissolution. Second, Defendants argue that the district court erred in

affirming the bankruptcy court’s ruling that the trustee’s withdrawal notice and

buy/sell offer were valid and enforceable. Third, Defendants argue that the

district court erred in denying their motion for rehearing on the merits.

I. Dissolution

The trustee argues that the BAP erred in concluding that he was not entitled

as the limited partner to dissolve the partnership. In the bankruptcy court and

BAP proceedings, the trustee argued that dissolution was warranted under both

the partnership agreement and Oklahoma law. On appeal to this court, the trustee

does not contest the BAP’s conclusion that none of the triggering events for

dissolution under the partnership agreement had occurred. He argues only that

judicial dissolution is warranted under Oklahoma law.

The first question we must consider is one of jurisdiction. In their

appellate brief, Defendants argue that we do not have jurisdiction over this appeal

because the BAP’s decision was not a final order under 28 U.S.C. § 158(d). We

disagree. “[T]he appropriate ‘judicial unit’ for application of these finality
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requirements in bankruptcy is not the overall case, but rather the particular

adversary proceeding or discrete controversy pursued within the broader

framework cast by the petition.” Adelman v. Fourth Nat’l Bank & Trust Co. (In

re Durability, Inc.), 893 F.2d 264, 266 (10th Cir. 1990). This particular

adversary proceeding and both of the issues raised therein—whether Mrs.

Baldwin’s partnership interests became property of the bankruptcy estate and

whether dissolution of the partnership was warranted under either the partnership

agreement or Oklahoma law—were fully resolved by the BAP’s order. We

accordingly conclude that the BAP’s order was a final, appealable order.

We thus turn to the merits of this issue. Oklahoma law provides that “[o]n

application by or for a partner, the district court may decree dissolution of a

limited partnership whenever it is not reasonably practicable to carry on the

business in conformity with the partnership agreement.” Okla. Stat. tit. 54, § 346

(2000). The trustee argues that he is entitled to judicial dissolution of the limited

partnership pursuant to this statute. Because family estate planning was the

purpose of the partnership, he argues, the partnership can no longer lawfully carry

on its business in conformity with the partnership agreement—it would be

improper for the limited partnership to be run for family estate planning purposes

now that the 99% limited partnership interest has become part of the bankruptcy

estate. He also argues that the general partner’s refusal to acknowledge the

bankruptcy estate’s interest in the partnership is grounds for judicial dissolution.
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While Mrs. Baldwin’s father testified at trial that the partnership was

established for estate planning purposes, the partnership agreement itself

expressly provides that “[t]he purpose of this Partnership shall be to engage in

general business activities including but not limited to the purchasing, holding,

construction, owning, operation, improving, managing, mortgaging, leasing and

selling of and dealing in and with real property.” (Appellant’s App., Case No.

09-7004, at 30.) Mrs. Baldwin’s father testified at trial about the partnership’s

holding and management of real property and about various profit-seeking

activities the partnership had engaged in over the past several years. He also

testified that all of the partnership’s profits had been put back into the partnership

property. Finally, he testified that he anticipated property values to rise in the

future, at which point the partnership would potentially develop a subdivision or

sell some or all of its acreage for a profit. This testimony was not rebutted at

trial, nor was any evidence introduced to indicate that the limited partner’s

bankruptcy filing had caused the partnership to deviate from its stated purpose of

engaging in business activities including holding, owning, improving, and

managing real property. 

After reviewing the partnership agreement and the evidence introduced at

trial, we agree with the BAP that the bankruptcy court clearly erred in finding the

partnership could no longer carry on its business in conformity with the

partnership agreement. All of the evidence in the record indicates that the
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partnership was continuing to carry out its business in accordance with the

partnership agreement just as it had been for the past ten years. We see nothing

in the Oklahoma statute permitting judicial dissolution when a partnership’s

business operations are continuing to be carried out in accordance with the

partnership agreement, even if a new limited partner wishes to change the

operation of the partnership. We note that the partnership agreement does not

require any participation by or cooperation with the limited partner in the

partnership’s business activities, and nothing in the partnership agreement

required the general partner to acknowledge or accede to the new limited

partner’s requests for the partnership to deviate from its long-term investment

strategies. We also agree with the BAP that the general partner did not breach the

partnership agreement or call its validity into question by disputing a contested

issue regarding the bankruptcy trustee’s interest in the partnership. We reject the

trustee’s argument that certain alleged improper practices by the general partner

constituted grounds for dissolution. We see nothing clearly erroneous in the

bankruptcy court’s finding that the general partner’s practices did not amount to a

breach of fiduciary duty, and the trustee has cited to no legal authority indicating

that the complained-of actions otherwise justified dissolution of the limited

partnership under Oklahoma law. 

Thus, because we see nothing in either the partnership agreement or the

evidence introduced at trial to indicate that it was not reasonably practicable for
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the partnership to carry on its business in conformity with the partnership

agreement, we affirm the BAP’s reversal of the bankruptcy court’s order of

dissolution.

II. Withdrawal and enforceability of the buy/sell offer

In his withdrawal notice and buy/sell offer, the trustee offered to sell the

99% limited partnership interest for $297,000 or to purchase the general partner’s

1% interest for $3000, based on a $3,000 price per percentage point of partnership

interest. The bankruptcy court and district court concluded that this notice and

offer were valid and enforceable under the partnership agreement’s withdrawal

provision. On appeal, Defendants argue both that the trustee was not entitled to

withdraw from the partnership and that the buy/sell offer violated the partnership

agreement’s requirement that sale and purchase offers be “on identical terms.” 

Paragraph 16 of the partnership agreement provides in relevant part as

follows:

16. Withdrawal of a Partner.

16.1 Notice of Withdrawal. A Partner may withdraw from the

Partnership after delivering written notice of his intention to

withdraw to the other Partner at least thirty (30) days prior to the

proposed date of withdrawal . . . . Such notice of withdrawal shall

include an offer by the Withdrawing Partner to purchase the interest

of the Remaining Partner (the “purchase offer”) on stated terms and
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for a stated amount and, in the alternative, to sell the Withdrawing

Partner’s interest (the “sale offer”) on identical terms.

16.2 Option of Remaining Partner. For thirty (30) days after

the delivery of such notice of withdrawal, the Remaining Partner

shall have the option to accept the purchase offer o[r] the sale offer,

or serve notice that the Partnership be terminated and liquidated in

accordance with Section 15.3 herein.

(Appellants’ App., Case No. 09-7004, at 36.)

Defendants argue that the trustee was not entitled to withdraw from the

partnership, notwithstanding this provision, because withdrawal of the limited

partner would result in a dissolution. This argument is premised on a misreading

of the BAP’s decision. Defendants argue that the BAP held that the limited

partner was not permitted to cause dissolution of the partnership agreement, and

they assert this holding applied either to a direct dissolution or to actions that

might result in dissolution. However, the BAP simply held—and we agree—that

neither the partnership agreement nor Oklahoma law permitted the trustee to

directly dissolve the partnership. Indeed, the BAP specifically noted that ¶ 16

provided for a separate withdrawal right which was not affected by the BAP’s

ruling on dissolution. Nothing in the BAP’s ruling or our affirmance thereof

negates the partnership agreement’s withdrawal provision, even if dissolution is a

possible result of its enforcement.
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We are also not persuaded that other provisions in the partnership

agreement trump ¶ 16. The fact that ¶ 15 does not list withdrawal by the limited

partner as an event potentially triggering dissolution of the partnership does not

mean that ¶ 16 should be disregarded. Nor do provisions describing entitlement

to capital contributions outside of the withdrawal context trump ¶ 16’s specific

description of the buy/sell procedure that may be used by either partner to

withdraw from the partnership. By its clear terms, ¶ 16 entitles the limited

partner to withdraw by making a buy/sell offer in accordance with the provisions

of ¶ 16.

The parties also dispute the validity of the trustee’s buy/sell offer under 

¶ 16 based on this provision’s requirement that the sell offer be “on identical

terms” with the purchase offer. Defendants argue that “identical terms” means

that the limited partner must be willing to buy or sell for an identical total

amount, while the trustee argues that “identical terms” means that the buy and sell

offers must be based on the same price per percentage point of partnership

interest and the same proposed payment terms. We agree with the bankruptcy

court and district court that the more natural reading of ¶ 16 is the interpretation

asserted by the trustee—that the “terms” that must be identical under ¶ 16 include

the proposed payment terms and the pro rata value for a percentage of partnership
1

 We also note that two of the three experts who testified at trial stated that,

under customary usage, “identical terms” would be interpreted to mean the same

price per ownership interest, not an identical total amount.

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interest.1

 We are simply not persuaded that “on identical terms” means for an

identical total amount, particularly where ¶ 16 distinguishes between the “terms”

and “amount” in the context of the purchase offer. We thus agree with the

bankruptcy court and district court that the trustee’s buy/sell offer satisfied the

requirements of ¶ 16 because it was based on the same $3000 value per

percentage point of partnership interest and the same term that the price be paid

immediately in cash.

Defendants further argue that the buy/sell offer was invalid because it was

intrinsically inequitable and did not account for the management and control

differences between the general and limited partnership interests. While it is true

that the trustee’s buy/sell offer did not distinguish between these interests, such

was not required by the partnership agreement’s withdrawal provision. Under

Oklahoma law, which controls our review of the partnership agreement, “[i]t is

the duty of the court to enforce valid voluntary contracts” as written. Barnes v.

Helfenbein, 548 P.2d 1014, 1021 (Okla. 1976); see also Heskett v. Heskett, 896

P.2d 1200, 1202 (Okla. Civ. App. 1995) (applying Oklahoma laws regarding

contract interpretation to a written partnership agreement). “The fairness or

unfairness, folly or wisdom, or inequality of contracts are questions exclusively

within the rights of the parties to adjust at the time the contract is made.” Barnes,
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548 P.2d at 1021. While the language of a contract does not govern if it

“involve[s] an absurdity,” Okla. Stat. tit. 15, § 154 (1993), we are not persuaded

that calculating the sale and purchase amounts for disparate partnership interests

on a pro rata basis is absurd. For similar reasons, we reject Defendant’s argument

that the withdrawal provision should not be enforced because it defeats the

purpose of forming a family partnership. This potential problem with the

partnership agreement is simply not sufficient to prevent its enforcement under

Oklahoma principles of contract interpretation.

III. Denial of motion for rehearing

Defendants argue that the district court erred in denying their motion for

rehearing because the court failed to address any of their actual propositions of

error. We disagree. While the court did not expressly state the reasons why it

agreed with the bankruptcy court, it stated that it had reviewed the record and

fully considered Defendants’ arguments. Nothing in the district court’s order

suggests that it failed to consider any of the arguments raised by the appellants. 

It simply did not find these arguments convincing. We see no error in the court’s

terse affirmance of the bankruptcy court’s ruling. 

CONCLUSION

For the foregoing reasons, we AFFIRM the BAP’s decision affirming in

part and reversing in part the bankruptcy court’s ruling in the first adversary

proceeding. We AFFIRM the district court’s order affirming the bankruptcy
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court’s decision as to the enforceability of the trustee’s withdrawal notice and

buy/sell offer.