ReGen Capital I, Inc. v. UAL Corp. (In Re UAL Corp.)
635 F.3d 312
7th Cir.2011Background
- AT&T assigned its pre-petition unsecured claim against United to ReGen, including rights arising from AT&T's contracts.
- ReGen filed a cure claim believing United’s plan treated the AT&T contracts as assumed and sought full cure on the pre-petition default.
- United’s plan provided for assumption or rejection of executory contracts with a cure mechanism, and a Cure Bar Date for cure claims, but did not list cure amounts for AT&T contracts.
- The plan reserved a right to reject contracts up to 15 days after the later of cure amount agreement or final order establishing cure; Sabre objected; ReGen did not.
- Confirmation approved United’s treatment, but United ultimately rejected the AT&T contracts; ReGen’s cure claim was denied, and district court affirmed.
- The Seventh Circuit held that ReGen could seek a cure only if there was an actual assumption; since United rejected the contracts, no cure payment was due.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Scope of assignment to cure claim | ReGen's assignment included cure rights arising from AT&T contracts. | Assignment covered only general pre-petition unsecured claims, not cure rights. | The assignment broad enough to include cure rights arising from AT&T contracts. |
| Whether United's plan constituted actual assumption of the AT&T contracts | Plan listed contracts as assumed and provided cure rights. | Plan allowed delayed decision and reservation to reject; no actual assumption occurred. | No assumption occurred; United effectively rejected the AT&T contracts. |
Key Cases Cited
- ReGen Capital I, Inc. v. Halperin (In re U.S. Wireless Data), 547 F.3d 484 (2d Cir. 2008) (affirms that assignee may seek cure as the contract-rights relate to the pre-petition claim)
- Shropshire, Woodliff & Co. v. Bush, 204 U.S. 186 (Supreme Court 1907) (priority attaches to the debt, not the creditor)
- Dorr Pump & Manufacturing Co. v. Heath (In re Dorr Pump & Manufacturing Co.), 125 F.2d 610 (7th Cir. 1942) (claiming assignment places purchaser in same position as original holder)
- In re Superior Toy & Manufacturing Co., 78 F.3d 1169 (7th Cir. 1996) (statutory 365(b) cure requirements; debtor must cure prior defaults)
- In re Streets & Beard Farm Partnership, 882 F.2d 233 (7th Cir. 1989) (business judgment and plan provisions govern assumptions in bankruptcy)