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In re Ortiz
United States District Court for the Central District of California
400 B.R. 755 (2009)
Victor Ortiz (debtor) was a professional boxer. Ortiz entered into a five-year agreement with a boxing promoter called Top Rank (creditor). The agreement included exclusivity provisions restricting Ortiz’s ability to fight for other promoters. Before the five-year agreement with Top Rank expired, Ortiz filed for liquidation under chapter 7 of the bankruptcy code. The trustee rejected the agreement with Top Rank under § 365 of the bankruptcy code. Ortiz filed an adversary action in bankruptcy court, alleging that Top Rank was interfering with Ortiz’s ability to enter into agreements with new promoters. According to Ortiz, Top Rank erroneously believed that the rejected agreement’s exclusivity provisions were still enforceable against Ortiz. Ortiz sought an injunction prohibiting further interference by Top Rank. The bankruptcy court entered judgment for Ortiz, holding that the trustee’s rejection of the agreement terminated all of Ortiz’s obligations and that Top Rank was only entitled to a claim for monetary damages against the estate. Top Rank appealed, arguing that its right to seek injunctive relief against Ortiz survived the trustee’s rejection.
Rule of Law
Holding and Reasoning (Morrow, J.)
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