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