Gretter v. Greeter Autoland, inc. (In re Greeter Autoland, Inc.)

Case Type:
Business
Case Status:
Dismissed
Citation:
16-3490 (8th Circuit, Jul 25,2017) Published
Tag(s):
Ruling:
The appeal of the bankruptcy's denial of the debtors' motion to assume and assign automobile dealership agreements was moot because, among other reasons, the assignment would require the proposed assignee to perform even though it had withdrawn its support for the transaction. Due to the facts in this case, there were no breach of contract or other contract claims that would prevent the appeal from being moot. (E.g., In re Kmart Corp., 434 F.3d 536 (7th Cir. 2006); Cinicola v. Scharffenberger, 248 F.3d 110 (3rd Cir. 2001).)
Procedural context:
Appeal from the Southern District of Iowa, which had affirmed the decision of the bankruptcy court (Bankr. S.D. Iowa), which had denied the debtors' motion to assume and assign certain automobile dealership agreements.
Facts:
The appellant was a surety for certain debt owed by the automobile dealership debtors. The dealerships filed Chapter 11 petitions, and proposed to sell their dealerships as a going concern. GM and Ford objected to the sale. The bankruptcy judge agreed with Ford and GM, but indicated that GM's and Ford's objections would not survive a motion to assume and assign under section 365, provided that the debtors could cure the pre-petition defaults and the assignee could provide adequate assurance of future performance. The debtors then filed section 365 motions. The bankruptcy court denied the 365 motions because the debtors had not cured pre-petition defaults and the proposed assignee did not give adequate assurance of future performance. The same day, the bankruptcy court allowed a secured lender to begin foreclosing on certain inventory. The proposed assignee subsequently stated that it intended to revoke its purchase offer, and the US Trustee moved to convert the cases to Chapter 7 proceedings. The bankruptcy court then authorized foreclosure proceedings for the realty used by the debtors. About two weeks later the appellant filed an appearance in the debtors' bankruptcy cases, having purchased debt for which he was a surety. The appellant filed a motion asking the bankruptcy court to reconsider its denial of the motions to assume and assign. The debtors, whose cases had not yet been converted, joined in the appellant's motion and objection. The bankruptcy court denied the appellant's motion and converted the cases to Chapter 7 proceedings. The appellant appealed the denial of the debtors' motions to assume and assign.
Judge(s):
WOLLMAN, ARNOLD, GRUENDER

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