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(In the matter of the Administrative Claim of Moody’s Wall Street Analytics)

Held, (1) Chapter 11 debtor corporation had standing to reject executory contract notwithstanding the fact that the debtor’s parent corporation was the contracting party and not the debtor, where the obligee demanded payment from the debtor and the debtor was unwittingly in possession of the claimant’s computer equipment on the petition date; (2) debtor may reject an executory contract to which it was not a party in the exercise of its sound business judgment based upon the reasonable belief that the debtor might be liable for performance of the contract; (3) debtor’s rejection of an executory contract is not an acknowledgment of indebtedness per se; (4) while rejection of an executory contract may give rise to an unsecured claim and/or an administrative claim against the bankruptcy estate for breach of contract, administrative claimant seeking rejection damages bears burdens of proving damages and that the debtor was obligated to perform the contract, particularly where the debtor is not a party to the rejected contract, but might be liable on some other basis; (5) debtor’s rejection of an executory contract to which it was not a party did not give rise to a claim for any damages against the bankruptcy estate where administrative claimant failed to prove both debtor’s obligation to perform the contract and that debtor’s rejection thereof caused damage to the claimant.

Entered: 
2010-03-22
Case: 
07-21814
Judge: 
James F. Schneider