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The debtor was an operator of a restaurant in premises leased pursuant to an agreement that also required the landlord to transfer a liquor license to the debtor for the premises. The lease provided that upon the termination of the lease, the debtor was required to retransfer the license back to the landlord. In the bankruptcy, although the debtor continued to operate in other locations, it determined to reject the lease for the subject property. The debtor's rejection motion stated that notwithstanding the lease rejection, the debtors would retain an interest in the liquor license associated with the rejected location. The landlord apparently did not file an objection, and the bankruptcy court entered an order granting the rejection motion. Thereafter, the landlord commenced an adversary proceeding to determine that the debtor had no interest in the liquor license and an enforceable obligation to retransfer the license to the landlord notwithstanding the rejection of the lease. The debtor argued, among other things, that the license remained property of the estate notwithstanding the rejection. The bankruptcy court granted the landlord's motion for summary judgment and denied a st cross-motion by the debtor, and the 1 Circuit BAP affirmed. First, the BAP considered whether the debtor's interest in the license was property of the estate. Looking to state law to determine that question, the court concluded that under applicable Pennsylvania law, the liquor license was a personal privilege rather than personal property. Moreover the highest state court had concluded that a liquor license transferred as part of a lease transaction does
