## Facts

- Curlew Valley Associates, a Utah general partnership, operated a 24,000-acre farm producing alfalfa hay/seed, barley, and wheat in northern Utah and southern Idaho.
- The debtor filed a Chapter 11 petition in May 1980 and operated as debtor in possession until a Chapter 11 trustee was appointed in December 1980 under 11 U.S.C. § 1104(a)(1).
- The trustee operated the business under 11 U.S.C. § 1108 while the case proceeded under a conditional dismissal order under 11 U.S.C. § 1112(b) that would become effective unless a plan was confirmed by a set deadline.
- Expecting that the case would end through dismissal or a creditors’ plan, the trustee prepared the estate for a potential liquidation scenario and changed the hay strategy from cubing to baling.
- The trustee stated that baling offered more predictable expenses, quicker disposition, and flexibility because baling still allowed later cubing, but not vice versa.
- The debtor sought court intervention to stop the trustee’s baling program and, alternatively, moved to terminate and replace the trustee under 11 U.S.C. § 1105.
- The debtor claimed baling was agronomically unsound, would materially reduce crop proceeds, and would impair the debtor’s plan prospects; the debtor did not claim changed circumstances justifying removal, financial irresponsibility, dishonesty, or self-dealing.
- After a hearing held on the eve of harvest, the trustee opposed relief, asserting the decision was made in good faith for sound operational reasons.

## Issues

1. Whether the bankruptcy court may enjoin or otherwise direct a Chapter 11 trustee’s operational decision under 11 U.S.C. § 1108 based solely on the debtor’s disagreement with the trustee’s business judgment.
2. Whether an alleged mistake in business judgment by a trustee appointed under 11 U.S.C. § 1104(a)(1) constitutes grounds to terminate or replace the trustee under 11 U.S.C. § 1105.

## Decision

- The court denied the debtor’s request for injunctive relief directing or restraining the trustee’s hay operations under § 1108.
- The court denied the debtor’s motion to terminate and replace the trustee under § 1105.
- The court allowed the trustee to proceed with the baling strategy as part of contingency planning for dismissal or confirmation of a creditors’ plan.

## Legal Principles

- A Chapter 11 trustee’s good-faith operational decisions within the scope of § 1108 are not subject to judicial override merely because the debtor claims the decision is unwise or economically harmful.
- The court’s residual authority under § 1108 to “order otherwise” does not authorize routine judicial management of the trustee’s day-to-day business decisions absent a legally sufficient showing.
- Removal or replacement of a Chapter 11 trustee under § 1105 requires more than a disputed business decision; it generally requires cause-type circumstances (e.g., bad faith, dishonesty, conflict, incompetence, financial irresponsibility, or materially changed conditions warranting a different fiduciary).
- A trustee’s preparation for the contingency of liquidation, when consistent with the case’s procedural posture, is not itself improper operation of the estate.

## Conclusion

The court held that a debtor’s disagreement with a trustee’s farming strategy, even if framed as a potential business mistake, did not justify judicial control of the trustee’s operations under § 1108 or removal under § 1105 absent evidence of bad faith or other cause.


In re Curlew Valley Assocs., 14 B.R. 506 (Bankr. D. Utah 1981)