In Re Cornwall Hill Realty, Inc.
The debtor, Cornwall Hill Realty, Inc., filed for Chapter 11 bankruptcy and moved to reject a consulting and management contract with Lori-Kay Management Corp. Cornwall argued the contract was executory under 11 U.S.C. § 365(a). Lori-Kay opposed, asserting the agreement was not an executory contract. The court found that Lori-Kay had no further duties to perform under the contract, as its stated obligations were discretionary and essentially provided a mechanism for additional purchase price payments to Lori-Kay, which was the former owner of the property. Therefore, the court concluded that the contract was not executory and denied Cornwall’s motion to reject it. Lori-Kay's claim was deemed an unsecured, fixed prepetition claim.