United States District Court, D. Idaho
In re THOMAS MECHAM RICKS, Debtor.
RANDAL J. FRENCH, P.C.; MCHUGH BROMLEY, PLLC; and JOHN WOOD, Appellees-Respondents. THOMAS MECHAM RICKS, Appellant,
MEMORANDUM DECISION AND ORDER
Honorable Edward J. Lodge United States District Judge
before the Court in the above-entitled matter is
Appellant/Debtor Thomas M. Ricks' appeal of Chief
Bankruptcy Judge Terry L. Myers' Orders involuntarily
converting the case to a Chapter 7 bankruptcy and denying
Ricks' Motion for Reconsideration. Having fully reviewed
the record, the Court finds that the facts and legal
arguments are adequately presented in the briefs and record.
Accordingly, in the interest of avoiding further delay, and
because the Court conclusively finds that the decisional
process would not be significantly aided by oral argument,
this matter shall be decided on the record before this Court
without oral argument.
AND FACTUAL BACKGROUND
filed a Chapter 11 bankruptcy petition on February 19, 2013.
Excerpt of Record (ER), Tab 1, Dkt. 9. On December 17, 2014
the United States Trustee sought to dismiss the petition. ER,
Tab 5. A stipulated Order was entered on February 5, 2015,
that provided Ricks additional time to seek confirmation of a
Chapter 11 plan until September 25, 2015 or the case would be
dismissed. ER, Tab 7. The stipulated Order also provided the
agreement of the parties and 'this order do not prejudice
the parties' rights to raise the issues asserted in the
United States Trustee's Motion to Dismiss or Convert in
any subsequent motion to dismiss or convert, or any other
motion or proceeding." Id.
Myers denied Ricks plan on August 18, 2015. ER, Tab 39, Dkt.
11. On September 2 and 3, 2015, two administrative creditors,
Randal J. French, P.C. and McHugh Bromley PLLC filed motions
to convert Ricks' case to a Chapter 7. The Bankruptcy
Court held an evidentiary hearing on the motion. Ricks
maintained pursuant to 11 U.S.C. § 1112(c) the Court
could not involuntarily convert the case as Ricks is a
"farmer." Ricks testified at the hearing that his
income was inaccurately reflected on his personal and
business tax returns, but that he farmed the crops grown on
the Grandview, Idaho property and he also operated the cattle
operation of Ricks Ranches, Inc. (RRI) and therefore, 80% of
his income came from farming operations as defined by 11
U.S.C. § 101 (21) as he is the sole shareholder of RRI,
a subchapter S corporation.
September 25, 2015, the Bankruptcy Court rejected Ricks'
argument based on the tax records and other documents filed
in the case and found Ricks had not carried his burden to
establish via credible evidence that he met the definition of
a "farmer" set out in 11 U.S.C. § 101(20). ER,
Tab 18. The Bankruptcy Court also granted the motions for
conversion to Chapter 7. Id.
filed amended personal and business tax returns for 2012
after the evidentiary hearing and after the
Court's ruling on the motion to convert. Ricks then moved
for reconsideration of the Court's order converting the
case based on amended tax returns claiming they were newly
discovered evidence. The Bankruptcy Court denied the motion
finding the amended tax returns were not "newly
discovered evidence" but "newly manufactured
evidence." ER, Tabs 23 (Memorandum of Decision) and 24
(Order). Ricks filed his appeal of the Order converting the
case and the Order denying his motion for reconsideration.
Court has jurisdiction over "final judgments, orders,
and decrees" of bankruptcy judges pursuant to 28 U.S.C.
the Bankruptcy Court err in failing to dismiss the case
pursuant to the stipulated Order of February 5, 2015?
the Bankruptcy Court err in finding Debtor did not meet the
definition of a "farmer" and involuntarily
converting the Chapter 11 petition to a Chapter 7 case?
the Bankruptcy Court err in denying the motion for