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On January 16, 1976, petitioner filed a chapter 11 petition
in the U.S. Bankruptcy Court for the District of Kansas
(Bankruptcy Court) to obtain protection from his creditors and to
reorganize his business and personal debts, including debts
relating to his farm, his grain distributorship, and his
commodity investments.
On April 20, 1976, in the above proceeding and over
petitioner's objection, the Bankruptcy Court converted
petitioner's chapter 11 proceeding into a chapter 7 proceeding,
adjudicating petitioner a bankrupt and subjecting petitioner's
assets to liquidation. Petitioner appealed that decision to the
U.S. District Court for the District of Kansas (District Court),
in which appeal petitioner claimed that he qualified for "farmer"
status under 11 U.S.C. secs. 1(17) and 22(b) (1970), which
provisions exempt farmers from chapter 7 bankruptcy proceedings.
In order to qualify for "farmer" status, under the above
provisions as applicable to bankruptcy petitions filed in 1976,
an individual must have been personally engaged in farming as his
or her principal source of income. 11 U.S.C. sec. 1(17).1
On October 5, 1977, after an evidentiary hearing, the
District Court, by written order, concluded that petitioner did
not qualify for "farmer" status under 11 U.S.C. sec. 1(17) on the
1 Petitioner’s bankruptcy proceedings were governed by the
Bankruptcy Act of 1898, ch. 541, 30 Stat. 544, as amended. The
Bankruptcy Act of 1978 did not become effective until Oct. 1,
1979. Pub. L. 95-598, sec. 402(a), 92 Stat. 2549, 2682.
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