In the Matter of Rockford Products Corporation

Citation:
12-3133
Tag(s):
Ruling:
The 7th Circuit Court of Appeals refused to interpret ambiguous language in a District Court Opinion as an injunction. On that basis, and since issuing an opinion would require weighing in on many other questions, including the effects of Stern v. Marshall and a 2007 Bankruptcy Court order, the 7th Circuit ruled that it lacked jurisdiction and dismissed this appeal.
Procedural context:
Judge Barbosa of the Bankruptcy Court for the Northern District of IL, Western Division, held that his 2007 order approving the §363 sale from the Debtor to Rockford Products Corporation, LLC cut off any pre-sale obligations, but that as the new Tenant, Rockford Products still had to honor ongoing maintenance duties. Nonetheless, since the case was closed and creditor interests could no longer be affected, the Judge dismissed the matter for lack of jurisdiction. The District Court disagreed, ruling that Landlord could enforce the lease's "good-repair" clause to the extent that defects in the roof occurred after assumption of the lease, and that the Tenant would bear the burden of establishing which problems existed when. The case was therefor remanded to the Bankruptcy Court for that determination. District Judge Philip G. Reinhard did not discuss the possibility that leaks which existed when the Debtor assumed the lease could have become worse over time, or that specific performance damages are not cut-off like money damages, or the effect of cases such as Stern v. Marshall on the Jurisdiction of the Court to rule in this matter. The matter was appealed to the 7th Circuit to look into these and other matters.
Facts:
Rockford Products Corp. (Debtor) leased a building. It assumed the lease and sold it with other assets to Rockford Acquisition, later renamed Rockford Products. Judge Barbosa of the Bankruptcy Court for the Northern District of Illinois, Western Division, approved that transfer in 2007. In 2010 the Landlord sued the Tenant based on the lease requirement to keep the roof in good repair. The Tenant moved the Bankruptcy Court for an order absolving it of any duty for that claim, asserting that it predated the transfer of the lease. The Court declined, and dismissed the matter for lack of Jurisdiction. The District Court remanded and the decision was taken on appeal before the 7th Circuit.
Judge(s):
EASTERBROOK, KANNE, and ROVNER

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