Lubrizol Enterprises, Inc., Appellee, v. Richmond Metal Finishers, Inc., Appellant. In Re: Richmond Metal Finishers, Inc., Debtor, 756 F.2d 1043

Summary

Debtor entered into a contract that granted appellee the nonexclusive license to utilize a certain metal coating process technology owned by debtor. In return for the license appellee was to pay debtor certain royalties. Debtor then filed for Chapter 11 bankruptcy. In its reorganization plan debtor sought under 11 U.S.C.S. § 365(a) to reject the contract that it had entered into with appellee. The bankruptcy court allowed the rejection. The district court reversed, finding that debtor was not entitled to reject the contract. On appeal, the court held that the bankruptcy court was correct and debtor could properly reject the contract because it was executory on both sides and advantageous to debtor.