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was an executory contract under § 365. Each party had an ongoing obligation to maintain the software as confidential, satisfying the Countryman test. On the critical issue, because § 365(c) excuses the non-debtor's performance where applicable non-bankruptcy law would prohibit assumption or assignment, there is no statutory basis to change the language to read assumption and assignment. Accordingly, the debtor could not assume the agreement over the non-debtor's objection. The court reconciled the apparent inconsistency between § 365(c)(1) and § 365(f)(1) by identifying the latter section as a general rule which makes unenforceable prohibitions, restrictions or conditions upon assignment of executory contracts. Section 365(c)(1) is a more narrow rule which makes enforceable in bankruptcy applicable non-bankruptcy law which excuses a party from accepting performance from or tendering performance to another entity. The circuit was unwilling to ignore the plain language of § 365(c) in favor of general principles of bankruptcy law or the importance that such contracts might play in an estate. Rather, the statute would be enforced aswritten. Finally, the provision in the contract which provided that the non-debtor party would not withhold its consent unreasonably to an assignment of the contract was not an implied consent to assumption by the DIP or trustee. Accordingly, upon the bankruptcy filing, the debtor lost the benefit of the contract absent the consent of the non-debtor party.
A debtor owning assets, including non-exclusive licenses in copyrights, must know the law in the venue where the bankruptcy case is filed in order to avoid losing valuable property rights merely by filing the bankruptcy petition.
In an Arizona bankruptcy court decision responding to the Catapult problem, while acknowledging that the patent licensing agreement could not be assumed and assigned, the bankruptcy court held
