In re: FORMTECH INDUSTRIES, LLC, and FORMTECH INDUSTRIES HOLDINGS, LLC, Debtors.HHI FORMTECH, LLC, Plaintiff, v. MAGNA POWERTRAIN USA, INC. and MAGNA POWERTRAIN, INC., Defendants., 439 B.R. 352

Summary

The debtors entered into an amended and restated purchase agreement (APA) whereby plaintiff agreed to purchase substantially all of the debtors’ assets. The debtors also filed notices of rejection of contracts, which included any executory contracts with defendant. A determination of whether defendant could assert setoff and recoupment rights was a core proceeding, as it required the interpretation and enforcement of the court's sale order. The debtors were not necessary parties, as the validity of the assignment of the accounts receivable was not at issue. The APA did not limit the accounts receivable being sold only to completed or assigned contracts. Defendant could not assert setoff rights for rejection damages against the accounts receivable, as it never exercised those setoff rights pre-petition. Nor could defendant recoup its rejection damages against the accounts receivable. Its recoupment claim did not relate to the debtors’ performance or to the actual delivered goods on ...