CRIVELLA HOLDINGS LIMITED v. MESEARCH MEDIA TECHNOLOGIES, LIMITED
2:25-cv-00333
W.D. Pa.Aug 25, 2025Background
- Crivella Holdings Limited owns software patents and related intellectual property used under a 2019 Software License Agreement with MeSearch Media Technologies Limited (the "Debtor").
- The License Agreement grants the Debtor a perpetual, non-transferable, limited-exclusive license, including limited sublicensing rights, and contains an assignment clause allowing assignment to a "successor in interest or wholly-owned subsidiary" with consent.
- Creditors filed an involuntary bankruptcy petition against the Debtor in August 2024, and a Chapter 11 trustee was appointed.
- Crivella sought relief from the automatic bankruptcy stay under 11 U.S.C. § 362(d), seeking to terminate the License Agreement due to alleged breaches by the Debtor.
- The Bankruptcy Court denied Crivella’s motion, finding the agreement could be assigned to a "successor in interest," thus no "cause" existed to lift the stay.
- Crivella appealed, arguing the License wasn’t assignable under 11 U.S.C. § 365(c) without its express consent.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the License Agreement authorizes assignment to a third party under bankruptcy law | Crivella: § 365(c) bars assignment without its consent; agreement not assignable beyond Debtor | Appellees: Assignment clause allows transfer to successor in interest; satisfies § 365(c) | Agreement is assignable to a successor in interest, so no cause for relief from stay |
| Whether the License can be assumed if it is not assignable under non-bankruptcy law | Crivella: License cannot be assumed if not freely assignable | Appellees: If contract is assignable, assumption is also permitted | If the agreement is assignable, it can also be assumed |
| Effect of the automatic stay under § 362(d) when assignability is disputed | Crivella: Stay should be lifted due to lack of adequate protection and non-assignability | Appellees: No adequate cause shown, and contract is assignable | No cause to lift the stay; automatic stay remains |
| Interpretation of "successor in interest" in the License Agreement | Crivella: "Successor in interest" excludes third parties not controlled by Debtor | Appellees: The term is broad and includes entities other than the Debtor | Term encompasses entities other than Debtor; assignment valid |
Key Cases Cited
- In re United Healthcare Sys., Inc., 396 F.3d 247 (3d Cir. 2005) (sets standard of review for bankruptcy appeals)
- In re Cellnet Data Sys., Inc., 327 F.3d 242 (3d Cir. 2003) (defines "clear error" standard for factual findings)
- Sharon Steel Corp. v. Nat’l Fuel Gas Distrib. Corp., 872 F.2d 36 (3d Cir. 1989) (defines executory contracts in bankruptcy)
- West Electronics Inc., 852 F.2d 79 (3d Cir. 1988) (adopts Hypothetical Test for assignability under 11 U.S.C. § 365(c))
- Maritime Elec. Co. v. United Jersey Bank, 959 F.2d 1194 (3d Cir. 1992) (automatic stay may not be waived or limited by debtor)