Summit Land Co. v. Allen (In re Summit Land Co.), 13 B.R. 310 (Bankr.D.Utah)
PUBLISHED
Chapter 11 debtor owned a large property in Utah that was operated as a recreational park for the use of members. Debtor sold perpetual, non-exclusive interests in the property by real estate contract, each of which included one membership. Debtor's goal of selling a certain number of membership interests was not met, which led to its petition and a decision to sell the property. Sale of the property would require termination of members' continuing interests, which some of them opposed. The court ruled that the contracts with members were executory and could be rejected by the debtor or the trustee under 11 U.S.C. § 365(a). The parties agreed that the proposed rejection was subject to court approval, but the court ruled, based on § 365(d), that approval should be granted as a matter of course. The court rejected members' argument that land sale contracts receive special treatment under the Code and should not be rejected unless burdensome, noting that Congress did not grant special treatment to land contracts, as it did to other types of contracts. Finally, the court ruled that members were not "in possession" of the property, as required by § 365(i) and (j), and thus those provisions did not allow them to retain possession.