In re Old Carco, LLC
United States Bankruptcy Court for the Southern District of New York
406 B.R. 180 (2009)
- Written by Alex Ruskell, JD
Facts
Old Carco, LLC (Carco) (defendant) filed for Chapter 11 bankruptcy. Carco then filed a motion seeking court approval to terminate 789 dealership agreements. In its business judgment, Carco determined that terminating the agreements was in the best interest of Carco’s restructuring efforts and estate because the affected dealerships (plaintiffs) lacked the operational, market, facility, and linemake characteristics necessary to best contribute to the ongoing dealer network under either current or future ownership. Carco sought to transfer to new ownership a smaller, more effective, and more profitable dealership network while limiting potential postpetition obligations to affected dealerships. The affected dealerships argued that Carco was acting in bad faith.
Rule of Law
Issue
Holding and Reasoning (Gonzalez, J.)
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