In re Willams

(Bankr. W.D. Ky. Apr. 22, 2016)

The bankruptcy court denies the U.S. Trustee's motion to dismiss the Chapter 12 case. The debtors testified at their § 341 meeting of creditors that they had not engaged in a farming operation since two years before the petition was filed and did not intend to return to farming. The court applies the Code's definition of "family farmer" and first finds that the debtors had engaged in a farming operation even though they contracted with their son to do the physical planting and harvesting of crops. The court also holds that the Code does not require the debtor to be engaged in a farming operation at the time the petition was filed, in part because Chapter 12 permits liquidation of the farming operation. Opinion below.