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Moe's Franchisor, LLC v. Taylor Investment Partners II, LLC et al. (In re Taylor Investment Partners II, LLC et al.), Case No. 15-51333 (Doc. No. 100)

Order granting Motion for Relief from Stay of Moe's Franchisor, LLC.  Moe's sought relief from stay because Debtors cannot assume or assign their franchise agreement with Moe's pursuant to 11 U.S.C. § 365(c)(1), which states, "The trustee may not assume or assign any exeuctory contract ... if (1)(A) aplicable law excuses a party, other than the debtor, to such contract or lease from accepting performance from or rendering performance to an entity other than the debtor...; and (B) such party does not consent to such assumption or assignment[.]"  A circuit split exists as to whether 11 U.S.C. § 365(c)(1) prohibits a debtor in possession from assuming an executory contract if applicable law would excuse the contract counterparty from accepting performance from someone other than the debtor; however, the 11th Circuit's stance on this issue is determined by In re James Cable Partners, L.P., 27 F.3d 534 (11th Cir. 1994), which states that the restriction of § 365(c)(1) does apply to debtors in possession.  Debtors argument that James Cable's application of § 365(c)(1) is dicta is incorrect.   Because Debtor could not assume the executory contract, cause existed to grant Moe's relief from the automatic stay.

Date: 
06/30/2015