05 B 12554
Receiver appointed in District Court litigation sought authority to sell Chapter 11 Debtor's interest in a limited liability company to one of the LLC members. Third party objected and submitted an offer. Receiver changed tactics and filed a motion seeking approval of bid procedures. The LLC objected and engaged in extensive briefing with the third party over whether the LLC's Operating Agreement was an executory contract. Parties also disputed whether the right of first refusal held by the other members of the LLC was enforceable in bankruptcy. HELD: The Operating Agreement of this particular LLC is not an executory contract. The right of first refusal is neither an ipso facto clause nor a restraint on assignment, and is enforceable. The Receiver's motion for approval of bid procedures is granted.