  |
  |
  |
    
  
   |
 | |||
|
|
|
|
| |||
Holding: Under New York law, "Confidential Information Memorandum for Public Investors" (CIM) sent by bankruptcy debtor seeking exit financing was not an "offer" which, upon acceptance, would lead to a binding agreement, for purposes of would-be lender's claim against debtor's agent for tortious interference with contract. CIM was disclosure document setting forth terms of term loan and outlining how confidential information would be handled and CIM explicitly stated that its use was "solely for informational purposes" and that it created no legal obligation as to participation in exit financing "unless and until a definitive agreement regarding the Facility [Term Loan] between the parties thereto has been executed," and CIM contained no language suggesting that it was an offer, expressing intent to be bound by an agreement except with respect to its confidentiality provisions, or stating that debtor would be bound by an agreement upon delivery of a commitment letter to its agent.
iv. In re Eastman Kodak Co., 495 B.R. 618 (Bankr. S.D.N.Y. 2013)
Issue: Whether a debtor must assume and assign an unexpired commercial lease at the same time, or at least within the deadline for assumption, and if the debtor dose assume without assigning such lease within that deadline, whether such debtor somehow loses its right to assign.
Holding: The bankruptcy court held that a Chapter 11 debtor's assumption and nonconsensual assignment of a commercial lease does not have to occur at the same time or even within the deadline for assumption. The court also held a debtor that assumes without assigning such lease does not lose its right to later assign, notwithstanding an anti-assignment clause. A lessor objected to the debtor-in-possession's assignment of a lease outside of the deadline for assumption under 11 U.S.C. § 365(d)(4), which is 210 days from the petition date. The court's construction of 11 U.S.C. § 365(f)(2)-(3) for assuming and assigning executory contracts revealed that assumption and assignment are "separate concepts" and need not occur simultaneously. Furthermore, the court found that Section 365(d)(4) expressly limited the time frame to assume, but the Code did not specifically limit the time assign. The court reasoned that allowing assignment outside the time limitations for assumption "balances the goal of providing protection to landlords and the goal of maximizing the value of a debtor's estate." The lessor also argued that the debtor assumed the commercial lease subject to its burdens, including the non-assignment clause, thereby losing its right to later assign. The court found no supporting authority and held "if the debtor is still in a bankruptcy case, one of those benefits [the debtor retains] is a debtor's right under § 365(f)(3) of the Bankruptcy Code to assign a contract notwithstanding an anti-assignment clause."
v. In re Universal Finance, Inc., 493 B.R. 735 (Bankr. M.D.N.C. 2013)
Issue: Whether under the Doctrine of Necessity, the debtor could use cash collateral to pay two creditors of the debtor's shareholders before confirmation.
©2014 William L. Norton III
