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filing before the ex-husband died and the wife sought to enforce a buy-sell agreement. Her buysell notice would be untimely if the partnership had been terminated by the earlier disputes or the husband's prior bankruptcy filing. After finding that under state law the exclusion of the husband and then the wife from management of the partnership did not cause a dissolution, the court considered whether the husband's prior bankruptcy filing had dissolved the partnership before his death and his wife's bankruptcy filing The circuit court reversed the district court and found that § 365(e)(1) prevented application of state law and the partnership agreement to cause a dissolution of the partnership because one of the general partners filed a bankruptcy case. The court further rejected the proposition that § 365(e)(2) did not apply to validate termination of the partnership because the other partner - now the debtor in her own bankruptcy case, consented to continuation of the partnership after the ex-husband's bankruptcy filing. Her failure to object to his continuing to serve as general partner at the time of his bankruptcy filing prevented the conclusion that his bankruptcy filing caused the partnership to dissolve. Accordingly, a non-debtor seeing to enforce a dissolution upon bankruptcy provision in a partnership case should promptly object to the debtor continuing to serve as general partner and seek a determination of dissolution in order to enforce the dissolution provision and applicable state law.
The debtor owned an interest in a partnership. After the debtor filed a bankruptcy case, a trustee was appointed. The trustee confirmed a plan of reorganization that provided on a blanket basis for rejection of certain specified contracts and assumption of all others. The partnership agreement was never specifically addressed as an executory contract to be assumed or rejected, although the parties to the appeal agreed that the partnership agreement was an executory contract. The Fifth
