UNITED STATES BANKRUPTCY COURT
NORTHERN DISTRICT OF CALIFORNIA
|DO NOT PUBLISH
This case disposition has no value as precedent and is not intended for publication. Any publication, either in print or electronically, is contrary to the intent and wishes of the court.
WILLIAM and PAMELA NOYES, No. 99-12032
The current law in this circuit is that an option is not rejectable as an executory contract unless
both sides must still perform. Performance due only when the option is exercised does not count. In re
Robert L. Helms Const. & Dev. Co, Inc.
, 139 F.3d 702, 706 (9th
Under the option agreement at issue here, optionee K & L Enterprises has no obligations
and until it exercises its option or at least incurs expenses to subdivide the subject property. It has the
to seek subdivision approval, but not the obligation to do so. Therefore, under Helms
contract is not executory and Chapter 11 debtors in possession William and Pamela Noyes may not
The court is not particularly happy with this result. The right of a debtor in possession to reject
executory contracts is fundamental to the bankruptcy system. N.L.R.B. v. Bildisco & Bildisco
U.S. 513, 528 (1984). By excluding most options from treatment as executory contracts, Helms
establishes a rule which makes it impossible for many debtors, including William and Pamela Noyes
here, to reorganize. It also seems incongruous that the Noyes could have rejected the option if only K
& L had expended thousands of dollars and hundreds of hours exercising it. Nonetheless, the court is
bound to follow Helms
For the foregoing reasons, the motion to reconsider will be denied. Counsel for either side may
submit an appropriate form of order.
Dated: October 26, 1999 ____________________________
United States Bankruptcy