Bankr. No.:
95-30001
Adv. No.:
95-3007
Chapter:
12
Date of Decision:
March 4, 1996
Issue:
: (1) Whether a shared appreciation agreement between Debtor and FSA was an executory contract where Debtors had received a debt write-down under the agreement and where the agreement had not expired by its own terms? (2) How should FSA's and the Credit Union's claims secured by real property be valued when the amount of FSA's claim could not be determined until the shared appreciation agreement expired?
Ruling:
: (1) The shared appreciation agreement was not an executory contract because a failure to perform by Debtors would not excuse FSA's performance. By receiving the write-down of debt, Debtors already had received the benefit of their bargain with FSA. That FSA had to release mortgages after Debtors made all payments was not a condition of performance that rendered the contract executory. (2) The values of FSA's and the Credit Union's claims secured by real estate would have to be estimated for confirmation and finally determined when the shared appreciation agreement expired.
Full Bankruptcy Court Decision:
