In re Exemplar Manufacturing Company

331 B.R. 704 (2005)

From our private database of 45,900+ case briefs, written and edited by humans—never with AI.

In re Exemplar Manufacturing Company

United States Bankruptcy Court for the Eastern District of Michigan
331 B.R. 704 (2005)

Facts

Lear Corporation (Lear) (defendant) supplied automotive parts for a General Motors Corporation (GM) program. Lear contracted with Exemplar Manufacturing Company (Exemplar) for Exemplar to produce certain parts for GM’s program. Exemplar produced some of the parts but claimed that the arrangement was causing it to lose $500,000 per month. Accordingly, in September 2002, Exemplar and Lear entered into a resourcing agreement under which Lear agreed to provide the resourcing needed for the GM program. The Resourcing Agreement contained a purported liquidated-damages clause stating that Lear would pay Exemplar $16,667, which represented one-thirtieth of $500,000, for each day that the resourcing continued after November 7, 2002. At that time, Exemplar also entered into an agreement with Lear, GM, Ford Motor Company (Ford), and Exemplar’s other customers, which gave the customers a right of access upon Exemplar’s default such that the customers could produce their own parts, and the parts of the other customers, at Exemplar’s facilities. In October 2002, Ford exercised the right of access. Lear did not complete the resourcing until November 23, 2002, but did pay Exemplar the $16,667 per day pursuant to the Resourcing Agreement. Ford produced the rest of the parts for the GM program. Exemplar and its subsidiary (plaintiffs) filed for bankruptcy. During bankruptcy proceedings, Exemplar and its subsidiary filed an adversary complaint against Lear seeking $266,676 in damages pursuant to the Resourcing Agreement. Exemplar and Lear both moved for summary judgment. Lear argued that the liquidated-damages clause was an unenforceable penalty provision, that Exemplar was only entitled to actual damages, and that Exemplar failed to plead any actual damages.

Rule of Law

Issue

Holding and Reasoning (Tucker, J.)

What to do next…

  1. Unlock this case brief with a free (no-commitment) trial membership of Quimbee.

    You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 733,000 law students since 2011. Some law schools—such as Yale, Berkeley, and Northwestern—even subscribe directly to Quimbee for all their law students.

    Unlock this case briefRead our student testimonials
  2. Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.

    Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students.

    Learn about our approachRead more about Quimbee

Here's why 733,000 law students have relied on our case briefs:

  • Written by law professors and practitioners, not other law students. 45,900 briefs, keyed to 984 casebooks. Top-notch customer support.
  • The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
  • Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
  • Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.

Access this case brief for FREE

With a 7-day free trial membership
Here's why 733,000 law students have relied on our case briefs:
  • Reliable - written by law professors and practitioners, not other law students
  • The right length and amount of information - includes the facts, issue, rule of law, holding and reasoning, and any concurrences and dissents
  • Access in your class - works on your mobile and tablet
  • 45,900 briefs - keyed to 984 casebooks
  • Uniform format for every case brief
  • Written in plain English - not in legalese and not just repeating the court's language
  • Massive library of related video lessons - and practice questions
  • Top-notch customer support

Access this case brief for FREE

With a 7-day free trial membership