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Opinion 308

Case Name: 

In re TS Indus., Inc., 117 B.R. 682 (Bankr.D.Utah)

Judge: 
Judge Clark
Date: 
Aug-14-1990
Case Number(s): 
89C-4919 through -4921
Status: 

PUBLISHED

Body: 

Chapter 11 debtor-in-possession moved to reject a prepetition executory contract, which the court described as "clearly a pre-bankruptcy workout." The court considered whether the contract, which involved the extension of financial accommodations to debtor, could be assumed under 11 U.S.C. § 365(a), notwithstanding the prohibitions of § 365(c)(2), since the contract had been entered in anticipation of debtor's bankruptcy. Concluding that § 365(c)(2) was intended to protect creditors that were unaware of an impending bankruptcy, the court determined that assumption of the contract at issue was not precluded by that provision. Therefore, the court held that the contract could be assumed or rejected by the debtor-in-possession, subject to claims by interested parties that debtor's choice was an abuse of business judgment. The court concluded that such issues could be addressed at the confirmation hearing.

Internal Ref: 
Opinion 308
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