The Weinstein Company Holdings bankruptcy decisions clarify a buyer’s ongoing obligations under contracts purchased in bankruptcy, subject to resolution of appeals.
Executive Summary -
In the In re The Weinstein Company Holdings LLC (together with its affiliates, TWC) bankruptcy proceeding1 and the Lantern Entertainment LLC v. Bruce Cohen Productions adversary proceeding2, Judge Mary F. Walrath of the US Bankruptcy Court for the District of Delaware issued two related and important decisions. Ruling on a motion for summary judgment in a “test case” adversary proceeding initiated by Lantern Entertainment LLC (Lantern), the buyer of TWC’s assets, the court held that a work-for-hire agreement entered into by Bruce Cohen for production services related to the film Silver Linings Playbook was not executory for purposes of Bankruptcy Code § 365.3 Instead, the court found the agreement was transferred under Bankruptcy Code § 363. As a result, the court concluded that Lantern was not required to cure defaults (as required by Bankruptcy Code § 365) as a condition to acquiring the rights under the agreement.
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