Opinion ID: 173130
Heading Depth: 2
Heading Rank: 1

Heading: Dissolution

Text: 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 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. 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 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 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.