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sought to cure the arrearages with interest under a plan over four years, the court found the cure was not prompt, particularly because the remaining term of the lease was only 5 years. Alternatively, the court found as a matter of fact that the debtor had not proven adequate assurance that the cure would even occur.
The debtor confirmed a chapter 11 plan that provided for assumption of a settlement agreement as an executory contract. In the confirmation process, the debtor identified the contract and asserted that the cure amount was $0. After plan confirmation, the non-debtor party asserted a claim for millions of dollars. The Fifth Circuit held that since the non-debtor party does not know if the lease or contract will be assumed or rejected, it does not have a claim until the decision is made. Assumption of the contract under a plan does not give rise to a claim and thus the obligation to cure is not discharged under § 1141(d). The debtor alternatively argued that the $0 cure amount was binding upon the non-debtor party under principles of res judicata once the plan was confirmed. The Fifth Circuit was required to consider the amount and type of notice provided to the nondebtor party in order to evaluate the res judicata argument, and held that the debtor was required to provide the non-debtor "actual knowledge of a sufficiently refined degree," of the intent to assume the contract and the proposed cure amount. Due to a disputed issue of fact over whether the nondebtor had received sufficient notice, the case was remanded for further proceedings.
The non-debtor must make sure it gets paid while the matter is within the bankruptcy court's jurisdiction. In a Maine case, the debtor assumed and assigned a software license agreement to a buyer. The agreement approved by the court provided for a future stream of payments that would cure the debtor's arrearages under the obligation over one year. When the buyer failed to make
