UNITED STATES BANKRUPTCY COURT
EASTERN DISTRICT OF KENTUCKY
LAUREL RIDGE COAL COMPANY, INC.
DEBTOR CASE NO. 94-70221
This matter is before the Court on a Motion filed by Stanley Osborne to be authorized to act as responsible party for the debtor. Mr. Osborne is president and owner of 50% of the outstanding stock of the debtor, and a petitioning creditor in the involuntary bankruptcy petition filed in regard to this debtor on May 16, 1994. Brent Little, owner of the other 50% of the outstanding stock of the debtor, filed an Objection to the Appointment of Stanley Osborne as Responsible Party asking that a trustee be appointed to act on behalf of the debtor. Mr. Osborne and Mr. Little are involved in a state court action concerning the corporation.
The Court should first point out that relief was ordered in this case under Chapter 7 on June 30, 1994. Thereafter, pursuant to 11 U.S.C.'701, an interim trustee was named on July 5, 1994. As in any other Chapter 7 case, the trustee is responsible for the administration of the debtor's affairs. In an involuntary bankruptcy in which the debtor is a corporation, a "responsible party" is designated to fulfill the duties of the debtor such as filing schedules. However, with the appointment of the interim trustee, the business activities of the debtor are out of the hands of its principals.
At the hearing conducted on the within motion, counsel for the disputing parties agreed that Bruce Levy should be designated to act if the Court found it inappropriate to allow either of the disputing parties to act. While future actions of this debtor may be limited in view of the fact that this is a Chapter 7 proceeding and the role of the trustee therein, it would appear appropriate to designate Mr. Levy to prepare and file such other and further motions and applications, if any, on behalf of the corporate debtor subject to objection by the principals of the corporation.
It is therefore the opinion of this Court that Mr. Osborne's Motion should be overruled, and that Mr. Levy should be designated to act as set forth above. Principals of the debtor shall keep Mr. Levy abreast of the proceedings and shall request that he take specific actions when and if the actions become necessary. An order in conformity with this opinion will be entered separately.
By the Court -
Donald H. Combs, Esq.
Phil Stalnaker, Esq.
Lucinda M. Hall, Esq., Trustee
Bruce Levy, Esq.