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when due. Accordingly, when the debtor did not assume or reject the agreement within 60 days after the order for relief; obligations that became due under the agreement thereafter were entitled to administrative priority. In the case, the debtor's sale of property triggered a repurchase obligation, to which the court gave administrative priority.
In a consumer case, outside the scope of § 365(d)(10), the vehicle lessor was left with only an unsecured claim for damages when the debtor filed a chapter 13 case, rejected the lease after a couple of months and surrendered the vehicle. In response to the lessor's point that the debtor had the use of the vehicle post-petition and thus the lessor should have an expense of administration, the court found that such a rule would not work as a practical matter in chapter 13, distinguishing chapter 11 precedents.
In the context of a personal services contract, an executive argued that severance pay was due when the contract was rejected but the estate had accepted post-petition services. The First Circuit disagreed and held that the estate was obligated only for reasonable value of the post-petition services, not the severance amount due under the rejected employment contract. The court also rejected the proposition that the debtor could assume the employment agreement by implication, holding that court approval is a necessary prerequisite for assumption under § 365. The employee alternatively asserted a right to the severance payment under a pre-petition retention agreement that provided consideration if the employee agreed to stay with the debtor. Because no post-petition performance was owed by the employee, having earned the right to payment upon taking the job, the retention agreement was no longer executory and the employee was not entitled to
