On May 24, 2023, the U.S. Bankruptcy Court for the Southern District of New York held that ordinary horse breeding, without more, does not constitute farming activity under chapter 12 of the Bankruptcy Code. Certain creditors filed a motion to dismiss the case or, in the alternative, for relief from the automatic stay. Specifically, they contested the debtor’s eligibility under sections 109(f) and 101(18) of the Bankruptcy Code. In defense, Leonaggeo maintained that she qualifies for chapter 12 relief because she operates a horse farm and derives all her income from the farm. The court noted that Leonaggeo is a serial filer.
The court considered whether the debtor is a “family farmer,” defined as someone “engaged in a farming operation.” Most courts look to whether the activity in question involves risks similar to traditional farming, such as raising crops or livestock.
The court noted that there is a split of authorities over whether whether horse breeding, boarding, and training can be categorized as a “farming operation.” Ultimately, the court distinguished the authorities on one side of the split because they involved debtors engaged in other operations in addition to horse raising.
Here, the debtor was involved in breeding, training, and boarding horses as well as rider instruction. But the court found this to be insufficient. Accordingly, the court dismissed the case.