In re: SVENHARD’S SWEDISH BAKERY
- Summarized by Benjamin Fischer , Klehr Harrison Harvey Branzburg LLP
- 1 year 4 months ago
- Case Type:
- Business
- Case Status:
- Affirmed
- Citation:
- BAP No. EC-23-1001-GLB; Bk. No. 19-15277 (9th Circuit, Aug 29,2023) Published
- Tag(s):
-
- Ruling:
- A 9th Circuit BAP affirmed an opinion of the Bankruptcy Court for the Eastern District of California holding that a settlement agreement with a pension fund is not an executory contract because the pension fund’s only contractual obligation—to release its claim upon full payment under the agreement—is not due until after Debtor fully performs.
- Procedural context:
- After the debtor missed a settlement payment, it filed for bankruptcy. The pension filed a proof of claim. Then, both the pension fund and the debtor sued United States Bakery (USB), who had agreed to purchase debtor prepetition. While that litigation was pending, the debtor and USB reached an agreement which required, inter alia, that the debtor cure, assume, and assign the pension settlement agreement. The bankruptcy court held that settlement could not be assumed because it was not an executory contract. Debtor appealed.
- Facts:
- The debtor was a bakery that entered into an agreement to sell its business. It closed one of its stores, terminating its union workforce, and resulting in withdrawal liability for withdrawing from the pension fund and contribution liability related to severance pay and accrued vacation. The parties entered into a settlement which provided for a full release after all payments to the pension fund were made.
- Judge(s):
- Gan, Lafferty, and Brand
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