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the 'principal purpose' of a contract is 'to extend financing to or guarantee the financial obligations of the debtor' is the contract a non-assumable contract to extend financial accommodations under § 365(c)(2)."
Holding: Following In re Thomas B. Hamilton Co., 969 F.2d 1013 (11th Cir. 1992) the court concludes that the Contract Purchase Agreements "are not agreements to extend financial accommodations to the Debtor, and, therefore, may not be terminated absent relief from the stay, pending the Debtor's assumption or rejection of the contracts." Under Florida law, terminable-atwill provisions "can only be exercised in good faith in accordance with the parties reasonable commercial expectations... The termination of these contracts solely because ... [the Debtor] filed for chapter 11 protection is not in good faith, as it is a direct violation of the explicit congressional policy behind 11 U.S.C. § 365(e), which invalidates bankruptcy or ipso fact termination clauses."
Reasoning: Relying on case law, because the "principal purpose of the contract was not to extend debt financing to the debtor," and because the debtor is not primarily or secondarily liable for the debt incurred, the contracts at issue are not financial accommodation contracts and are assumable by the Debtor. As for the termination-at-will clauses, the court noted first that all Florida contracts are subject to the implied covenant of good faith and fair dealing, which requires parties to "act in a way that honors the parties' 'reasonable commercial expectations.'" However, since these contracts are not financial accommodations contracts, the termination-at-will provision "violates the express congressional policy behind the ipso facto provision of § 365(e)." Ultimately, the Debtor's rights under these contracts are property of the estate and may not be terminated absent relief from the stay. Additionally, the Auto Finance Companies may not functionally terminate the contracts by "[r]ejecting every Consumer Contract that ... [the Debtor] generates, while accepting similar contracts meeting certain objective standards from other dealers..." - such action not only violates the automatic stay but also violates the implied covenant of good faith and fair dealing.
Facts: The Official Committee of Unsecured Creditors (the "Committee") filed an application to hire Bell, Boyd & Lloyd, LLP as counsel and an application to hire Gable & Gotwals as local counsel. F&M Bank & Trust Company ("F&M"), a secured creditor of the debtor, filed an objection to both applications and argued that the Committee did not need to hire Bell Boyd - national counsel at rates twice the rates of highly competent local, state or regional counsel - when Gable & Gotwals was more than able to competently represent the Committee in the case. The UST did not really object to the retention of two firms so long as Bell Boyd capped its fees to be similar to the local rates charged and so long as the firms did not duplicate work. Bell Boyd argued that because it met the statutory requirements under § 1103 and Bankruptcy Rule 2014 to be hired as Committee counsel, the bankruptcy court should not deny the retention application. The bankruptcy court denied Bell Boyd's retention application and Bell Boyd appealed. The district court affirmed the bankruptcy court.
Issues: May the bankruptcy court deny the Committee's application to hire two counsel - one national and one local - to represent its interests under the facts of this case when both counsels meet the statutory requirements of the Bankruptcy Code?
Rules: "Although the Code vests in the bankruptcy trustee the immediate power to select candidates for employment by the bankruptcy estate, it gives broad discretion to the bankruptcy court over the appointment of professionals to work on behalf of the trustee and the estate, in part by empowering
