Bankr. No.:
96-10115
Chapter:
12
Date of Decision:
January 28, 1997
Issue:
Whether agreement between a creditor and the debtors was executory and could be rejected by the debtors under § 365(d) where a state court had entered a default foreclosure judgment on the agreement pre-petition?
Ruling:
Under state law, a default judgment is enforceable upon entry and is not stayed when an appeal is filed unless specifically ordered. The state court's judgment was by default and had not been stayed on the petition date. Therefore, the judgment was final and it replaced the agreement between the debtors and the creditors. The agreement was no longer executory and could not be rejected by the debtors under § 365(d).
Full Bankruptcy Court Decision:
