MEMORANDUM OF DECISION
JIM D. PAPPAS, Bankruptcy Judge.
Introduction
The chapter 71 trustee, R. Sam Hopkins' ("Trustee"), objected to the proof of claim filed by Hirning Buick GMC ("Creditor") in the bankruptcy case of Daniel and Shawnda Burch ("Debtors"). Dkt. No. 48. The Court conducted a hearing on the objection on February 4, 2013, at which both Trustee and Creditor, represented by its officer, Mr. Hirning, appeared and argued. The Court took Trustee's objection under advisement, and invited the parties to file supplemental briefs. Trustee filed a brief on February 8, 2013; Creditor did not file a brief. Upon consideration of the submissions and arguments presented, as well as the applicable law, the Court now issues the following decision. This Memorandum disposes of Trustee's objection. Fed. R. Bankr. P. 7052; 9014.
Facts2
On June 25, 2009, articles of incorporation for D&S Automotive Service and Diesel, Inc. ("D&S Auto") were filed with the Idaho Secretary of State. Dkt. No. 54. The incorporation document named Daniel C. Burch as the registered agent, indicated no board of directors would be named, but that all duties conferred or imposed upon a board would be performed by the officers of the corporation as set forth in the corporation's bylaws, which are not in evidence. Id. The annual reports filed by D&S Auto in April 2010 and July 2011 name Daniel C. Burch as President and Shawnda R. Burch as Secretary. Id. On November 29, 2011, Daniel C. Burch, in his capacity as corporate president, filed articles of dissolution with the Idaho Secretary of State's office.3 Id.
A few weeks later, on December 21, 2011, Debtors filed a chapter 7 bankruptcy petition. Dkt. No. 1. In their Statement of Financial Affairs, Debtors indicate one or both of them is an officer, director, partner, or managing executive of two businesses, one of which is D&S Auto, a full service automobile repair shop. Dkt. No. 1, Q. No. 18.
Debtors listed Creditor as an unsecured business creditor on schedule F, in the amount of $510.47. Dkt. No. 1. The debt is not listed as contingent, disputed, or unliquidated. Id. The schedules also include numerous other business debts. Id. On May 14, 2012, Creditor filed a proof of claim in the amount of $595.43. Claims Reg. No. 8-1. Attached to the form are over twenty pages of documentation of Creditor's business transactions with D&S Auto, including documents showing payments were received by Creditor from D&S Auto. Id. The documents also show that Creditor sued D&S Auto and Daniel Burch in small claims court prior to the bankruptcy, but according to Mr. Hirning's comments at the hearing, that action was stayed by the bankruptcy filing prior to entry of a judgment. Id.
On November 9, 2012, Trustee filed an objection to Creditor's claim, Dkt. No. 48, to which Creditor responded on November 29, 2012, Dkt. No. 54.
Analysis and Disposition
Trustee's objection to Creditor's claim is founded on his contention that the debt is actually owed to Creditor by D&S Auto, rather than by Debtors personally, and thus should be disallowed for purposes of distribution in Debtors' bankruptcy. Creditor, on the other hand, contends that because D&S Auto has been dissolved as a business entity, then Debtors become individually responsible for the debt as officers of the corporation.
Idaho law makes clear that a corporation's assets and debts do not automatically revert to its officers upon dissolution. Idaho Code § 30-1-1405(2)(a) (dissolution of a corporation does not transfer title to the corporation's property). Rather, once a corporate dissolution is filed with the Idaho Secretary of State's office, the corporation's existence is not terminated, but it may carry on only the business of winding up and liquidating its business affairs. Idaho Code § 30-1-1405(1); In re Young, 409 B.R. 508, 514, 09.3 IBCR 93, 95-96 (Bankr. D. Idaho 2009); Wait v. Leavell Cattle, Inc., 41 P.3d 220, 222 (Idaho 2001).
Part of the winding up process involves collecting corporate assets and satisfying corporate liabilities. Idaho Code § 30-1-1405(1). Those assets and liabilities remain with the corporation during this winding up period, and a process for disposing of known and potential claims is provided by the statute. Idaho Code §§ 30-1-1406 and 30-1-1407. The corporation must satisfy its liabilities prior to distributing corporate assets to shareholders. Idaho Code § 30-1-1409(1); In re Carlson, 426 B.R. 840, 852 (Bankr. D. Idaho 2010) ("in winding up the business of a corporation, the corporation must discharge its liabilities to corporate creditors prior to making distributions to its shareholders"); Wilson v. Baker Clothing, Co., 137 P. 896, 898-99 (Idaho 1913).
In short, the act of filing formal articles of dissolution does not transfer the corporation's assets or debts to the officers/shareholders, in this case, to the Debtors. Instead, filing the dissolution articles commences a process by which corporate assets are liquidated and liabilities are paid and discharged. Nothing about dissolution converts corporate assets or liabilities to the officers' personal property, which may be accessed or discharged in a personal bankruptcy. Instead, the converse is true: by statute, corporate assets and liabilities remain tied to the corporation until the winding up process is completed.
Here, Debtors correctly did not schedule corporate assets as their own. Dkt. No. 1. They did, however, list a number of business debts, including Creditor's, on their schedules. Trustee noted this is a fairly common practice by debtors. Perhaps it is done out of an abundance of caution, in case it can be proven that the debt was incurred personally, or in the event a personal guarantee was signed by Debtors. Trustee then must methodically comb the schedules to determine whether a debt is business or personal, and then object to proofs of claim for debts that belong to the corporation rather than Debtors personally, as he did here.
Moreover, the fact that Debtors styled their bankruptcy petition as Debtors "Individually, dba D&S Automotive; as President of D&S Automotive & Diesel, Inc; and Manager of D&S Investments Capital, LLC" is of no moment. As this Court has stated,
It is clear, under § 302(a) of the Code, that spouses may file a joint petition for relief. However, an individual and his spouse are the only "persons," as defined by [§ 101(41)], which may file a joint petition. While a corporation or a partnership is also recognized as a "person" by the Code and may be a debtor under § 109, there is no provision in the Code authorizing such an entity to jointly file for relief with any other.
In re Aldape Telford Glazier, Inc., 410, B.R. 60, 63, 09.3 IBCR 97, 97-98 (Bankr. D. Idaho 2009) (quoting Fitgerald v. Hudson (Matter of Clem), 29 B.R. 3, 4, 82 IBCR 205, 206 (Bankr. D. Idaho 1982)). Accordingly, Debtors' petition may not be treated as a filing on behalf of both Debtors and D&S Auto, and will not serve to discharge debt belonging solely to the corporation.
The general rule is that the owners of a corporation are not personally liable for a corporation's debts. Barlow's Inc. v. Bannock Cleaning Corp., 647 P.2d 766, 770-71 (Idaho 1982). In rare occurrences, a court may pierce the corporate veil, which is the "judicial act of imposing personal liability on otherwise immune corporate officers, directors, and shareholders for the corporation's wrongful acts." VFP VC v. Dakota Co., 109 P.3d 714, 723 (Idaho 2005) (quoting Black's Law Dictionary 1184 (8th ed. 2004)). Here, Creditor has neither asked this Court to pierce D&S Auto's corporate veil, nor has it alleged the corporation acted wrongfully. Creditor simply seeks to be paid what it is owed. As the documents attached to Creditor's proof of claim make clear, the debt is owed to Creditor by D&S Auto, and not by Debtors in their individual capacities. As such, Creditor must look to D&S Auto only, either in the claims process associated with corporate dissolution, or through an independent judicial action, such as small claims court, in order to have its debt resolved.4
Conclusion
Because Debtors are not personally liable for D&S Auto's debts, and because dissolution of the corporation does not alter that legal reality, Trustee's objection to Creditor's proof of claim in Debtors' bankruptcy case is well-founded and will be sustained by separate order.5
