LONGACRE MASTER FUND, LTD., LONGACRE CAPITAL PARTNERS (QP) L.P., Plaintiffs-Appellants, v. ATS AUTOMATION TOOLING SYSTEMS INC., Defendant-Appellee., 496 Fed. Appx. 135

Summary

The district court held that the debtor's objection was not an impairment or possible impairment under two paragraphs of the purchase agreement because it only preserved the debtor's right to object, and because 11 U.S.C.S. § 502(d) objections purportedly did not attach to the claim itself. The court found that the paragraphs did not exclude objections intended to be withdrawn after the resolution of some other pending issue. Thus, even if the objection was in effect only a reservation of rights rather than an objection they intended to pursue immediately, it still constituted an objection under the purchase agreement. The district court erred when it granted summary judgment with respect to a count that alleged breach of warranty because the buyers showed a material issue of fact as to the seller's knowledge of a possible preference action and related objection. Finally, the district court erred when it concluded that indemnification was not warranted.