In the Matter of Ranchero Motor Inn, Inc., Bankrupt. Whitten Management Corporation v. Loren Wetzel, Trustee

The bankrupt, Ranchero Motor Inn, Inc., operated a truck stop on the outskirts of Boise, Idaho. The business ran into financial difficulty, and in the summer of 1970, it went into state receivership. At the insistence of its creditors and the receiver, Ranchero entered into a contract by which Whitten Management Corporation agreed to operate the business. Soon thereafter, Ranchero’s creditors filed a petition to have it adjudicated a bankrupt. Loren Wetzel was appointed trustee of the estate upon the adjudication.

Wetzel’s first acts as trustee were to seek permission to continue operating the business and to procure an extension of time to accept or reject executory contracts of the bankrupt under Sec. 70b of the Bankruptcy Act. [ 11 U.S.C. Sec. 110 (b)]. Both of these requests were granted and Whitten Management continued its operation of the business. On October 2, 1970, the time to accept or reject executory contracts was extended for a period of ninety days. The trustee’s schedule of rejected contracts, filed on January 15, 1971, lists the management contract as one of those rejected.

The management contract provided that Whitten Management was to pay the expenses…