In re G SURVIVOR CORP. f/k/a THE GITANO GROUP, INC., et. al., Debtors, 171 B.R. 755

Summary

Debtors were major apparel designers and manufacturers. Debtors attempted to expand their business in the Canadian market. It granted a license to the Canadian manufacturer. Debtors were faced with losing its largest customer if it did not sell its company because of felony convictions of executives and shareholders for illegal customs practices. A buyer agreed to purchase substantially all of debtors' assets, and the agreement listed certain executory contracts that debtors agreed to reject. The license to the Canadian manufacturer was not listed. The buyer notified debtors that it wished to reject the license. The sale agreement was approved, and the buyer moved to reject the license. The court granted debtors' motion to reject the license pursuant to 11 U.S.C.S. § 365(g). The court found that there was no reason to distinguish between a rejectable motion returnable prior to the sale to the buyer and one returnable after, when the rejection passed the business judgment test and the ...