Memorandum Decision re Option Agreement as Executory Contract

Original Filed December 14, 1998

UNITED STATES BANKRUPTCY COURT NORTHERN DISTRICT OF CALIFORNIA

In re
No. 95-30780TDM

ASK INVESTMENTS, INC.,			
Debtor.(s)
___________________________________/

MEMORANDUM DECISION
  1. Introduction
Before the court is the Motion To Sell Property Free And Clear Of Liens (the "Motion") of Edward F. Towers, the Chapter 7 Trustee ("Trustee"), seeking permission to sell to Hilda and Michael Sugarman (the "Sugarmans") 6.11 limited partnership units of Sonoma Valley Inn, a limited partnership ("SVI"). At the various hearings on these matters, the following appearances were noted: for the Trustee, Reidun Stromsheim, Esq.; for the Sugarmans, Kenneth J. Campeau, Esq.; for SVI, Gerald N. Hill, Esq.; for Jack Schleifer, Jeffrey J. Goodrich, Esq.; for the Richard and Theresa Krug Trust, Donald Drummond, Esq. For the reasons stated on the record on November 24, 1998, and as set forth in greater detail below, the Motion will be denied, the objections will be sustained, and the court will order the limited partnership units of SVI sold to Jack Schleifer ("Schleifer") for $60,000.
  1. Background(1)
On or about September 27, 1993, ASK Investments, Inc. (the "Debtor") and the Sugarmans entered into a Purchase, Assignment and Assumption Agreement (the "Agreement"). Included in the Agreement are a series of separate options in favor of Sugarmans to purchase limited partnership units in SVI. Prior to commencement of this bankruptcy case, the Sugarmans exercised the first of the options set forth in Agreement to purchase six units of SVI and Debtor transferred those units to the Sugarmans. SVI's partnership agreement was amended to reflect the execution of the Agreement, Sugarmans' ownership of the six limited partnership units, and their possible acquisition of additional units through exercise of the remaining options (the "Remaining Options") in the Agreement in the future. On November 9, 1994, Debtor filed a voluntary Chapter 11 petition in the Santa Rosa division of this court; the case was later transferred to this division. On or about September 2, 1995, the Sugarmans timely exercised the Remaining Options, seeking to purchase 6.11 units of SVI for $50,000. On December 4, 1995, Debtor, acting as debtor in possession, filed a motion for an order approving assumption of the Agreement, and in particular, the Remaining Options. The court held a hearing on the Debtor's motion but did not grant the request. The matter was dropped from calendar with no dispositive order following. Therefore, as of the conversion date, the Remaining Options had not been assumed. On April 23, 1996, Trustee was appointed as the Chapter 11 trustee and on August 20, 1996, Debtor's Chapter 11 case was converted to Chapter 7; Trustee continued as the Chapter 7 trustee. No action was taken on the Remaining Options within the next sixty days. On May 15, 1998, Trustee filed the Motion(2) to sell the SVI limited partnership units to the Sugarmans. The Motion also sought to sell them free and clear of any interest claimed by Schleifer and Natalie Schlass, Schleifer's daughter. Schleifer has objected to the sale to the Sugarmans.(3) Relying on Unsecured Creditors' Committee of Robert L. Helms Construction and Development Co. v. Southmark Corp. (In re Robert L. Helms Construction and Development Co., Inc.), 139 F.3d 702 (9th Cir. 1998) ("Helms"), Trustee contended in the Motion that the Remaining Options were not executory contracts but were to be treated as an asset of the bankruptcy estate. There is no explanation by the Trustee how an option - a burden on the estate - is an asset under any definition of the term. Assuming Trustee really means that the limited partnership units are assets, he suggests that the Sugarmans could compel specific performance of the Remaining Options. Helms specifically overruled Gill v. Easebe Enters (In re Easebe Enters), 900 F.2d 1417 (9th Cir. 1990) ("Easebe"), which held that all options are executory contracts. Trustee contended that, under Helms, he was required to sell to the Sugarmans because of their exercise of the Remaining Options during the Chapter 11 case. The Sugarmans took the same position, contending that Helms was retroactive to the date of this bankruptcy case commenced, and thus Easebe's treatment of the Remaining Options as executory contracts, automatically rejected in the Chapter 7 case, did not apply. To support their position, the Sugarmans relied on Harper v. Virginia Department of Taxation, 509 U.S. 86, 113 S.Ct. 2510 (1993) ("Harper"). At a hearing on July 9, 1998, the court considered preliminary arguments of the parties, requested further briefing, and gave Schleifer an opportunity to submit an overbid of at least 20% more than the $50,000 option price offered by the Sugarmans. As Schleifer was the only objecting party, the court stated that the Motion would be granted if Schleifer did not submit an overbid. He did make the overbid of $60,000 in a timely manner. SVI contends that there can be no transfer of the limited partnership units without its consent. It does not consent to a transfer to Schleifer although it does consent to a transfer to the Sugarmans. Schleifer, in turn, has acknowledged that all he can purchase from the Trustee are the economic interests represented by the partnership units. Stated otherwise, Schleifer as the successful purchaser will not become a limited partner in SVI and this court's order should not be construed as making him one. Rather, Schleifer will be entitled to all of the economic benefits (such as income or capital distributions) that are represented by the units. He will obtain nothing more than that which the Trustee has to sell. SVI does not dispute this characterization of the sale. On October 19, 1998, Trustee supplemented the Motion. Without abandoning his argument that Helms compelled the result previously urged by him and the Sugarmans, in the supplement he argued that in his business judgment he could sell 6.43(4) limited partnership units of SVI to the Sugarmans for $50,000. Trustee contends that his principal obligation is to wind up this Chapter 7 case as expeditiously as possible, and that therefore he should act in the best interests of the parties in interest by selling the units to the Sugarmans. As an additional justification for his disregard of the Schleifer overbid, he contends that in large measure this contentious bankruptcy case involves a dispute between two groups of creditors, one consisting of Schleifer and the members of his family or entities he controls, the other consisting of members of the family of Norman I. Krug, the prime mover of debtor's affairs, its authorized agent and the brother of Hilda Sugarman. The Schleifer interests and the Krug interests have been engaged in litigation in the California courts for several years and Californian Properties, an entity now controlled by Schleifer, has obtained a substantial judgment against Debtor and Mr. Krug for conversion of its assets. That judgment has recently been affirmed by the California court of appeal. The Richard and Theresa Krug Trust (the "Krug Trust"), the trustees of which are also related to Mr. Krug, have brought an adversary proceeding in this court and a Rule 60(b) motion to set aside a sale of Debtor's interest in Californian Properties to Schleifer. It is likely that that litigation will go on for quite some time. While it is true that there are virtually no creditors other than unpaid Chapter 7 and Chapter 11 expense of administration claimants, it is naive and unrealistic to assume that this case could be concluded promptly. There is always the possibility that the litigation between Schleifer and the Krug Trust could be settled; it is inconceivable that such a settlement would not also involve a consensual disposition of the present dispute among Schleifer, the Sugarmans and the Trustee. Notwithstanding the Trustee's insistence that the court approve the sale of the limited partnership units to the Sugarmans for $50,000, he also argues that "the ultimate purpose of a sale [in bankruptcy] is to obtain the highest price for the property sold. In re Chung King, Inc., 753 F.2d 547 (7th Cir. 1985)." He concedes that the 6.43 limited partnership units are worth more than $60,000, yet seeks to sell them to the Sugarmans for $50,000 and to disregard the Schleifer overbid. Apparently, as a litigation tactic, the members of the Krug faction have advised the Trustee that if the Remaining Options are honored and the units sold to the Sugarmans, they will not claim any money from this bankruptcy estate, and if the Schleifer offer is accepted they will be getting money against their wishes. From this Trustee argues, without proof, that Schleifer, if he is successful, "... will be paying more to receive less."
  1. Discussion
    1. The Remaining Options Were Automatically Rejected.
At the time the Debtor, as debtor in possession, filed its initial motion to assume the Agreement, Easebe was the law of this circuit, the Remaining Options were unquestionably executory contracts, and in fact Debtor and Sugarmans both contended that the Agreement was an executory contract. In her declaration in support of the initial motion, Hilda Sugarman recited under penalty of perjury that she and her spouse intended "... to exercise our two (2) remaining options and we are ready, willing and able, to deliver $50,000 to Debtor in exchange for the agreed upon 6.11 units of SVI." In the body of the motion the debtor in possession argued that assumption of the Agreement between it and the Sugarmans was in the best interest of all parties concerned and prayed for authority for the "debtors [sic] and all the parties to the contract to assume the Agreement between the Sugarmans and the Debtor." Now they want Helms to abrogate that characterization. Section 348(c)(5) provides that section 365(d) applies in a converted case as if the conversion order were the order for relief. Thus, section 365(d)(1) treated the Agreement and the Remaining Options as rejected since no order on the debtor in possession's initial motion was entered and the Trustee did not assume them within sixty days of the August 20, 1996 conversion order. Section 365(g) treats rejection of a nonassumed executory contract as a breach immediately before the filing of the petition. Thus the Remaining Options and any other obligations set forth in the Agreement, not having been assumed within sixty days of August 20, 1996, are deemed rejected as of November 9, 1994 and any damage claims could be asserted as pre-petition claims in this case. That should end the inquiry. B. Helms Does Not Apply Retroactively. Notwithstanding the foregoing statutory analysis that leads inevitably to the conclusion that the Remaining Options have been rejected as executory contracts, the Sugarmans rely on Harper and argue that Helms' overruling of Easebe in 1998 was retroactive to the date this bankruptcy case began. Indeed, Harper states: "... we hold that this Court's application of a rule of federal law to the parties before the Court requires every court to give retroactive effect to that decision." 509 U.S. at 90 (emphasis added). Clearly under Harper if the United States Supreme Court had issued the Helms decision, this court would be required to apply it, and not Easebe, which was in effect at the time of the deemed rejection. The Harper court, however, limited its broad retroactivity decision to cases decided by "this Court," i.e., the United States Supreme Court. Unfortunately, neither Harper nor subsequent case law sets forth a clear rule as to its application to federal circuit court decisions.(6) Moreover, Ninth Circuit case law is not consistent, which is understandable given the Supreme Court's convoluted treatment of the doctrine of civil retroactivity this decade. See, e.g., American Trucking Associations v. Smith, 496 U.S. 167 (1990) (plurality decision rejecting per se rule of retroactivity); Ashland Oil, Inc. v. Caryl, 497 U.S. 916 (1990) (per curiam ruling noting that prior decision was retroactive because it did not state a new principle of law); James B. Beam Distilling Co. v. Georgia, 501 U.S. 529 (1991) (plurality decision with five opinions, no one commanding more than three votes; "[O]nce retroactive application is chosen for any assertedly new rule, it is chosen for all others who might seek its prospective application."); Harper, 509 U.S. at 90 (applying per se retroactivity rule to Supreme Court decisions). On the one hand, the Ninth Circuit has followed James Beam and held that where a court "has applied a rule to the litigants in one case[,] it must apply the rule to all litigants whose cases were pending on direct review." See, BFI Medical Waste Systems v. Whatcom County, 983 F.2d 911, 914 (9th Cir. 1992). The Ninth Circuit has noted that "[a]lthough not constitutionally mandated, retroactive application of judicial decisions is the rule and not the exception." Coopers & Lybrand v. Sun-Diamond Growers of California, 912 F.2d 1135, 1138 (9th Cir. 1990); Sarbaz v. Feldman (In re Sarbaz), ___ B.R. ___, 198 W.L. 838914 (9th Cir. BAP 1998). On the other hand, the Ninth Circuit has also recently stated in George v. Camacho, 119 F.3d 1393, 1396 (9th Cir. 1997), that The Supreme Court has noted that "retroactivity is not favored in the law." [Citation omitted.] Therefore, there is a strong presumption against retroactive application [citation omitted]. As the Court has forcefully stated, [e]lementary considerations of fairness dictate that individuals should have an opportunity to know what the law is and to confirm their conduct accordingly; settled expectations should not be lightly disrupted. This principle is of particular importance when time limits are involved and litigants have been advised of the time by which must decide their course of action. This court believes that the better rule to apply here lies between the per se retroactivity rule of Harper (which, by its terms, applies only to Supreme Court decisions) and the language contained in George. That rule is found in Coopers & Lybrand, which favors retroactivity except where the decision overrules prior law and would produce substantial inequitable results if applied retroactively. See, Coopers & Lybrand, 912 F.2d at 1137. In this case, Helms clearly overruled controlling precedent existing when the rights of the parties vested: i.e., at the time of the deemed rejection under section 365(g). Substantial inequitable results would occur if Helms could operate to undo rejections that have already occurred, even where the underlying bankruptcy case remains open or pending. For that reason, this court believes that Helms is not retroactive. C. Even If Applied, Helms Does Not Change The Result. If this court must treat the 1998 Helms decision as the controlling circuit law to be considered in this 1995 case, the outcome is the same. Nothing in the decision suggests that contracts previously rejected as a matter of law spring back into existence. Thus, Trustee has no executory contract to assume by the Motion. In deciding Helms, the Ninth Circuit had to consider Easebe, believed by the initial three judge panel in Helms to be wrongly decided, but binding nevertheless. In Easebe the debtor held a lease with an option to purchase the leased property, and when it filed Chapter 11 it sought authority to assume the unexpired lease. The bankruptcy court granted the application to assume the lease, but made no specific mention of the option to purchase. Later the debtor tendered the purchase price and the bankruptcy court determined that the option was nonassumable under section 365(c)(2) because it was a contract to extend debt financing and financial accommodations. In affirming, the Ninth Circuit reiterated the notion that an executory contract "generally includes contracts on which performance remains due to some extent on both sides." Easebe, 900 F.2d at 1419 (citations omitted). It then stated, without any detailed analysis, that an "option contract is an executory contract." Plainly it was examining the issue from the point of view of the optionee, the debtor/lessee. The balance of the court's analysis turns on the lessor's contention that the underlying lease option was nonassumable under section 365(c)(2) and whether or not the lessors waived their right to raise that defense. In Helms, the en banc court set out to test the wisdom of Easebe. Again, the clear focus of the court's analysis is from the optionee's point of view. There is no analysis of an option as it might be enforced against the optionor. The decision is replete with convincing evidence that the rule it announced should be confined to cases where the debtor in bankruptcy is the optionee:
  • •In the second paragraph of the decision, the court dwells on the fact that Southmark's(7) concluded reorganization was based on a plan that assumed various contracts and rejected all others. The option to buy the property that is the subject of the dispute (the "Double Diamond Ranch") was not listed, so would have been deemed rejected, and no one raised the question below and the Texas bankruptcy court did not rule on the matter. 139 F 3d. at 702.
  • •Next the court points out that in the Nevada bankruptcy(8) a sale of the Double Diamond Ranch free and clear of Southmark's lien was requested, and that such a sale was valid only if the option had been stripped away in the Texas bankruptcy. The Nevada bankruptcy court relied on Easebe to conclude that the option had been rejected in the Texas bankruptcy. Id.
There was no analysis of the option as an executory contract in the Nevada bankruptcy case. There did not need to be any such analysis.
  • •Later on the court concedes that if the plan in the Texas bankruptcy treated the option as an unassumed executory contract it would have to be deemed rejected as a matter of res judicata. Id. at 703.
  • •After that the court expressed doubts about the Texas bankruptcy. Because of the incomplete record and its inability to determine whether the option was treated as an executory contract or how Southmark dealt with undisclosed assets, it remanded to the Nevada bankruptcy court to answer those questions. Id.
Certainly an option binding the optionor (Double Diamond) to sell the Double Diamond Ranch could not have been considered an asset.
  • •The court next addressed the argument that section 541(c)(1) makes an ipso facto provision in the option unenforceable. The Double Diamond Ranch Committee, contending that the property that was the subject of the Southmark option in the bankruptcy of Double Diamond, had argued that section 541(c)(1) does not apply if the option is no longer property of the estate of the confirmed debtor. The court responded:
"That is precisely the question at issue - the option ceased to be property of the estate only if it was rejected, and that in turn depends on whether or not the option was an executory contract." 139 F.3d at 705.
  • •A few paragraphs later the court focuses on the goals of bankruptcy law, and in particular that of maximizing the estate's value. It argues that applying Easebe gave the optionor (Double Diamond) an "undeserved windfall." by treating the option as rejected, and noted that debtors frequently fail to recognize that "some assets, such as options, are executory contracts, and so fail to expressly assume them." Id.
It is hard to believe that the court would consider the burden on an optionor as an asset that may carelessly be lost. The only way to "lose" the option is to reject it. Similarly, if the Helms court intended a bankrupt optionor to be bound despite the "windfall" to the optionee if rejection is not permitted, it is very cryptic in how it reaches that result.
  • •In the same paragraph the court cautions against the risk of an unassumed executory contract being rejected either in Chapter 7 (automatically under section 365(d)(1)) or in Chapter 11 (under a plan) "when the trustee has no intention of abandoning the asset." Id.
As stated above, there is no asset to consider saving when looked at from the optionor's point of view. The only asset to save is the asset that is burdened with the option in favor of the optionee, and that asset should be freed from the options by rejection, in the interest of maximizing estate value, an important goal recognized by the Helms court.
  • •After stating that Easebe's broad rule must be rejected, the court instructs that courts look to see if performance is due from either side as of the petition date. It then stresses that performance due only if the optionee chooses "doesn't count unless he has chosen to exercise it", but says an option may be executory where the optionee has "announced that he is exercising the option" but has not yet followed through with the purchase. Id. The optionee commits no breach by doing nothing. Id.
There is nothing about the analysis from the point of view of the optionor, even though it is bound to perform a negative covenant (i.e., not to sell the property) until the optionee declines to exercise the option. Negative performance, viz., the obligation not to do something, still leaves the obligation executory and subject to rejection. Fenix Cattle Company v. Silver (In re Select-A-Seat Corporation), 625 F.2d 290 (9th Cir. 1980) (violation of debtor's obligation not to sell software to other parties would constitute material breach; burdensome contracted rejected)(9). Double Diamond in Helms, like Debtor in this case, may not have been obligated to do anything affirmatively (other than to refrain from selling the property) as of the date of bankruptcy, but performance was conditionally due upon Southmark's (in Helms) and Sugarmans' here, exercise of their respective options. Certainly, both Double Diamond and Debtor remained obligated NOT to dispose of the property burdened with the option, for had either done so, then exercise by the optionee would have constituted a material breach. Rejection would free each from this burden.(10) If the Helms court intended to overrule Select-A-Seat on this point it would have said so.
  • •Finally, the disposition in Helms is equally telling. The case was remanded to the Nevada bankruptcy court to determine if the Southmark plan resolved the question; if not, then the court was to apply the tests set forth by the en banc court and referred to above. Id.
Had the court been wedded to the idea that option contracts, considered from the optionors side were not executory contracts, it could have simply reversed and spared the bankruptcy court the effort that it and the parties were directed to expend. In sum, if this court must treat Helms as controlling precedent, then it concludes that the rule announced in that case does not apply for all the reasons stated here and in Part A. D. The Trustee's Purported Exercise Of Business Judgment Should Be Overruled. As stated above, the Trustee in his supplement to the Motion sought to sell the SVI limited partnership units to the Sugarmans for $50,000 and refused to consider the Schleifer $60,000 overbid. Whether or not the Krug and Sugarman interests would claim nothing from the proceeds of sale, Schleifer remains a creditor in this bankruptcy case. Whether or not his claim of lien on the SVI limited partnership units is invalid (as is strenuously and somewhat persuasively argued by Trustee) it follows that he is entitled to share in whatever is left over after payment of priority claims. Thus, it is inappropriate for the Trustee to refuse to sell to Schleifer because Schleifer may recover some of the proceeds of sale. As for the "pay more - get less" argument, this court adheres to the "pay more - get more for the estate" policy. This court has "the power to disapprove a propose sale recommended by a trustee or debtor in possession if it has an awareness there is another proposal on hand which, from the estate's point of view, is better or more acceptable." In re Broadmoor Place Investments, L.P., 994 F.2d 744 (10th Cir. 1993); see also, In re Summit Corp., 891 F.2d 1, 5 (lst Cir. 1989) ("In order to achieve the goals of maximizing the value of the estate and protecting the interests of creditors, the court has plenary power to provide for competitive bidding.") In this case, from the estate's point of view, the Schleifer offer is the higher and better bid. To "fulfill its paramount obligation of determining the highest and best bid," the court is duty-bound to consider the Schleifer bid. In re Wintex, Inc., 158 B.R. 540, 544 (D.Mass. 1992). As noted by the Court of Appeals for the Eighth Circuit: "Had the court blindly proceeded to enter an order confirming the original Purchase Agreement without giving the slightest thought to Schnuck's substantially higher bid, it might have been accused of dereliction in its duty to guarantee that the particular assignment was in the best interest of the estate and the unsecured creditors." In re Food Barn Stores, Inc., 107 F.3d 558, 567 n. 16 (8th Cir. 1997). The court recognizes that a $10,000 differential in sale price(11) may be small compared to the delays that might be occasioned by appeals of this decision and by the fact that the Sugarmans may assert a damage claim arising from the rejection of the Remaining Options as executory contracts. As to the delays, it is equally likely that approval of the Sugarmans' sale could and no doubt would result in delays by an appeal by Schleifer.(12)

As to the possibility of a damage claim, the court recognizes that rejection may give rise to damages and the Trustee is justifiably concerned about the potential that any such damage claim by the Sugarmans could be entitled to expense of administration priority despite section 365(g). While the court expresses no opinion on what priority would be afforded any such claim asserted by the Sugarmans, it does note that Schleifer has volunteered, and the court has agreed, to consummate the sale that is authorized by this decision only when the order approving it has become final. Thus, if the Trustee or the Sugarmans prevail at a higher court on either theory advanced by them, the 6.43 limited partnership units of SVI will be available for transfer to the Sugarmans and Schleifer will get his $60,000 back. Although the court believes that Schleifer is a good faith purchaser under section 363(m), this voluntary stay will not render an appeal moot. While it is not certain that Sugarmans would not assert some additional claim, the manner in which Schleifer has offered to proceed, gives some satisfaction that a reversal of this decision on appeal can be treated much like a recission permitting the Sugarmans to tender $50,000 for the 6.43 units, allowing refund of $60,000 to Schleifer, and concluding the case once the Schleifer v. Krug Trust litigation is over. The court has taken this factor into account in overriding the Trustee's exercise of business judgment. IV. Disposition For the reasons stated above, the court concludes that the Agreement and the Remaining Options have been rejected as a matter of law. The sale to Sugarmans for $50,000 is not in the best interests of the estate in light of the Schleifer $60,000 offer and his willingness to withhold consummation of the sale until the order approving the sale to him becomes final. The Motion will be denied and the Schleifer overbid approved. An Order consistent with this Memorandum Decision is being issued concurrently.
Dated: December 14, 1998

_____________________________
		Dennis Montali
United States Bankruptcy Judge

1. There are no material facts in dispute. The following discussion constitutes the court's findings of fact and conclusions of law. Fed. R. Bankr. P. 7052(a).

2. As drafted, the Motion sought to sell 12.11 limited partnership units of SVI; counsel for Trustee later acknowledged that the correct number of units subject to the Remaining Options was 6.11.

3. Counsel for Schleifer and Ms. Schlass have never challenged Trustee's right to sell free and clear of their disputed claims under 11 U.S.C. § 365(f) and thus the proceeds of the sale being authorized by the court are to be held subject to their disputed claim.

4. For reasons unclear to the court and perhaps to the parties, Trustee holds approximately 0.33 limited partnership units in SVI which are not subject to the Remaining Options. The difference between the 6.11 units which are the subject to the Remaining Options and the actual amount now sought to be sold by the Trustee is de minimus and not relevant to the court's decision. Wherever the documents refer to 6.11, 6.43 will be deemed inserted.

5. Unless otherwise indicated, all section references are to the Bankruptcy Code, 11 U.S.C. §§ 101-1330.

6. In Miller v. County of Santa Cruz, 39 F.3d 1030, 1035-36 (9th Cir. 1994), the Ninth Circuit applied Harper in holding that a state court appellate decision was retroactive.

7. The optionee, Southmark, was the party with the right to exercise the option. 139 F.3d 702, 705, n. 8. It had been a debtor in a successful Chapter 11 case in Texas.

8. Double Diamond Ranch Limited Partnership ("Double Diamond") along with Robert L. Helms Construction & Development Co., Inc. filed their own bankruptcies in Nevada sometime after the Southmark plan was confirmed. The dispute that led to the Ninth Circuit decision had to do with whether the option was valid at the time Double Diamond sold the Double Diamond Ranch. Its sale free and clear of Southmark's disputed option rights under section 363(f) has been resolved favorably to Double Diamond. See 193 F.3d at 704, fn. 2. Because the entire Helms analysis of the option as an executory contract is from the point of view of the optionee (Southmark) this court is of the view that the bankruptcy of Double Diamond is wholly coincidental and extraneous to the executory contract analysis.

9. Select-A-Seat was decided under the former Bankruptcy Act, but it was in that case that the Ninth Circuit adopted the Countryman definition of executory contracts that was reaffirmed in Helms. See, 139 F.3d at 705, n. 7. There is no reason to presume it is not good law under the present Bankruptcy Code.

10. This is the way the court analyzed the same issue in In re Waldron, 36 B.R. 633 (Bankr. S.D. Fla. 1984), rev'd on other grounds, 785 F. 2d 936 (11th Cir. 1986) (debtors, in entering into option agreement, had agreed to relinquish their right to revoke their offer to sell (to optionee)), a decision that the Helms three-judge panel found inapposite, but the en banc court dismissed as being of marginal value. 139 F.3d at 705.

11. Once Schleifer submitted his $10,000 overbid, the Sugarmans, SVI itself and other parties in interest were invited to bid further. Trustee has advised the court, and counsel for SVI and the Sugarmans have confirmed, that they do not wish to bid.

12. Regardless of the potential for an appeal, the court makes the decision based upon the facts and law presented