See, e.g., In re Autumn Press, Inc., 20 B.R. 60, 62 (Bankr. D. Mass. 1982) (dismissing case in which single director authorized filing but where debtor corporation's bylaws and applicable state law required a minimum of three directors to act). Bankruptcy Code § 1112(b), requires a showing of "cause" to dismiss a chapter 11 case, though the specific examples of cause listed in § 1112(b) are nonexclusive.

Apart from the "voluntary" requirement of 11 U.S.C. § 301, the Bankruptcy Code does not specifically establish "the internal requisites . . . for the initiation of a voluntary corporate bankruptcy proceeding." In re Autumn Press, Inc., 20 B.R. 60, 61 (Bankr. D. Ma. 1982). To date, Congress has remained quiescent on the matter.

It is therefore appropriate to apply . . . [the law] of the state in which the Court sits regarding such requirements." In re Autumn Press, Inc., 20 B.R. 60, 61 (Bankr.D.Mass. 1982). I now turn to the applicable law.

The determination of who has the power of management is governed by state law. See id. See also In re Monterey Equities-Hillside, 73 B.R. 749, 752 (Bankr.N.D.Cal. 1987); In re Hawaii Times Ltd., 53 B.R. 560, 561 (Bankr.D.Haw. 1985); In re Crescent Beach Inn, Inc., 22 B.R. 155, 157 (Bankr.D.Maine 1982); In re Autumn Press, Inc., 20 B.R. 60, 61 (Bankr.D.Mass. 1982). The identity of those who have the power of management under Connecticut law, which is applicable in this case, is provided by § 33-313(a) of the Connecticut General Statutes: "Subject to any provisions pertaining thereto contained in the certificate of incorporation, the business, property and affairs of a corporation shall be managed by or under the direction of its board of directors."

See In re Quarter Moon Livestock Co., 116 B.R. 775, 778 (Bankr.D.Idaho 1990) ("the authority to file a bankruptcy petition must be found in the instruments of the corporation and applicable state law") (citing In re Crescent Beach Inn, Inc., 22 B.R. 155 (Bankr.D.Me. 1982)); In re Bel-Aire Invest., Inc., 97 B.R. 88, 89-90 (Bankr.M.D.Fla. 1989) ("It is well established that since the Bankruptcy code itself does not establish the requisites for the initiation of a voluntary corporate bankruptcy case, the validity of all the individuals acting on behalf of the corporation must be determined with reference to the laws of the State in which the corporation was chartered."; recognizing that application of state law would render corporation unable to file a voluntary petition) (citing In re Autumn Press, Inc., 20 B.R. 60 (Bankr.D.Mass. 1982); Taylor v. Markus Enterprises, Inc. (In re Markus Enterprises, Inc.), 91 B.R. 459, 460 (M.D.Tenn. 1988) ("Whether the debtor, in light of its dissolution, retains the capacity to file a petition under the Bankruptcy Code, Chapter 11, is a matter of the law of [Tennessee]."); see also In re Sunset Developers, 69 B.R. at 712 (as a matter of Idaho law, partner who filed for Chapter 11 protection lacks "authority as a general partner to bind the partnership to an involuntary bankruptcy petition").

"); In re Oakland Popcorn Supply, Inc., 213 F. Supp. 665, 667 (N.D. Cal. 1963) ("While it is true that stockholders of a bankrupt corporation have no statutory right to contest an involuntary petition, it is within the discretion of the bankruptcy court to permit them to do so."); In re Autumn Press, Inc., 20 B.R. 60, 63 (Bankr. D. Mass. 1982) ("[A]s a stock holder, Dreier has standing to contest the filing of this petition on the ground of lack of corporate volition."). The circumstances present here are exactly the type of circumstances warranting Tarek to contest the PHRGL involuntary petition under § 303, pursuant to Westerleigh, because the petition that commenced the PHRGL case was never properly served on PHRGL or its directors.

Nevertheless, "[a] bankruptcy filing is unauthorized if the board of directors purporting to authorize it was not lawfully constituted[.]" In re ComScape Telecomms., Inc., 423 B.R. at 832; see also In re Autumn Press, Inc., 20 B.R. 60, 62 (Bankr. D. Mass. 1982) (bankruptcy case dismissed because the petition was not authorized by a valid board of directors); In re Acoustic Fiber Sound Sys., Inc., 20 B.R. 769, 778 (Bankr. S.D. Ind. 1982) (same); see generally 9A Am. Jur. 2d Bankruptcy § 888 ("[T]he board of directors must be lawfully constituted and acting lawfully when authorizing the filing of a petition."). At issue here is whether the KCHM board was lawfully constituted when it ratified the bankruptcy filing.

[W]here it is evident that the purported president of the bankrupt was not properly representing the interests of the corporation, it was a proper exercise of discretion to entertain the petition of the stockholders to dismiss the proceeding."); In re Autumn Press, Inc., 20 B.R. 60, 63 (Bankr. D. Mass. 1982) ("[A]s a stockholder, Dreier has standing to contest the filing of this petition on the ground of lack of corporate volition."). This Court notes, as did the Westerleigh court, that shareholder standing is particularly appropriate when, as in the present case, a debtor is unable to answer the petition because its only two stakeholders are on opposite sides of the case, with neither having authority to act for the corporation.

"Other than the requirement that the petition be a `voluntary' act, 11 U.S.C. § 301, the Bankruptcy Code does not establish what the internal requisites are for the initiation of a voluntary corporate bankruptcy proceeding." In re Quarter Moon Livestock Co., Inc., 116 B.R. 775, 778 (Bankr. D. Idaho 1990), quoting In re Autumn Press, Inc., 20 B.R. 60, 61 (Bankr. D. Mass. 1982). Just as obviously, however, there is a federal common law exception to this reliance on state law when the state law is in the form of a receivership order that attempts to preclude any of the original constituents of the organizational entity from filing a petition on its behalf, in order to maintain the state court remedy that has been obtained by creditors.

The court also noted that "dismissal of a bankruptcy proceeding, for noncompliance with corporate bylaws or state law upon the motion [of a party in interest] who holds what otherwise might be a preferential transfer, would be unjustified in both law and equity." Id. (citing In re Autumn Press, Inc., 20 B.R. 60, 63 (Bankr. D. Mass. 1982)). HSM's reliance on American Globus is misplaced.