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Krafsur v. UOP (In re El Paso Refinery, L.P.)

U.S. Bankruptcy Court for the Western District of Texas
196 B.R. 58 (1996)


El Paso Refinery, L.P. (L.P.) owned and operated a petroleum refinery under a licensing contract to use refining technology that was developed by UOP (defendant). The contract required L.P. to pay UOP $1.97 million in royalties. L.P. filed for bankruptcy, and the refinery was conveyed to Refinery Holding Company (RHC). UOP and RHC entered into a new licensing contract for the technology used at the refinery. That contract required RHC to pay UOP $3.7 million in royalties. UOP filed a claim against L.P. in the bankruptcy action for $4 million in unpaid royalties from L.P. Krafsur (plaintiff), the bankruptcy trustee, brought an action objecting to UOP’s claim, arguing that UOP’s claim should be mitigated by the royalty payments from RHC. UOP argued that it was a lost-volume seller.

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