Philip Servs. Corp. v. Luntz
In Philip Servs. Corp. v. Luntz (In re Philip Servs. (Del.), Inc.), 284 B.R. 541, 548-50 (Bankr. D. Del. 2002), the bankruptcy court considered whether a merger agreement was executory for purposes of 11 U.S.C.S. 365.
The dispute centered over whether additional material obligations remained due from both parties. Id.
In concluding that the contract was executory, the bankruptcy court considered that one party remained obligated to perform environmental remediation duties associated with the properties and that the other party remained obligated for ongoing environmental compliance at certain contaminated sites. Id. at 547-48.
In addition, under the agreement, there were similar, continuing, largely unperformed indemnification obligations remaining as to both parties. Id. at 548--49.
The court rejected the argument that the merger agreement was "not an executory contract because the unperformed indemnification obligations are not material," distinguishing In re Chateaugay Corp., 102 B.R. 335, 347 (Bankr. S.D.N.Y. 1989) and similar cases "where one party has completed performance, . . . or where the only performance that remains is the payment of money." Philip Servs., 284 B.R. at 549.