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Keywords

contractplaintiffdefendantdamagescorporationspecific performance
contractplaintiffdefendantdamagescorporationspecific performance

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In re Pickel, 493 B.R. 258

Facts

Debtor formed AVIC and was its sole member and manager. On September 24, 2007, AVIC entered into an agreement with Plaintiff and her son to purchase their shares in Club Comanche, Inc. for $800,000. After a judgment against the Corporation prompted the sale, AVIC paid $550,000 but defaulted on the final installment due on November 1, 2009. Plaintiff attempted to terminate the Agreement on November 13, 2009, claiming default, but miscounted the cure period, which was actually ten business days, not calendar days. AVIC attempted to cure the default by tendering payment, but Plaintiff's counsel refused to accept it.

Debtor formed AVIC and was its sole member and manager. On September 24, 2007, AVIC entered into an agreement with Plaintiff and her son to purchase their shares in Club Comanche, Inc. for $800,000. After a judgment against the Corporation prompted the sale, AVIC paid $550,000 but defaulted on the final installment due on November 1, 2009. Plaintiff attempted to terminate the Agreement on November 13, 2009, claiming default, but miscounted the cure period, which was actually ten business days, not calendar days. AVIC attempted to cure the default by tendering payment, but Plaintiff's counsel refused to accept it.

Issue

Did Plaintiff validly terminate the stock purchase agreement, and were Defendants entitled to specific performance and damages?

Did Plaintiff validly terminate the stock purchase agreement, and were Defendants entitled to specific performance and damages?

Rule

The court applied principles of contract law, particularly regarding anticipatory repudiation and the requirements for valid termination of a contract, including the necessity of adhering to specified cure periods.

The court applied principles of contract law, particularly regarding anticipatory repudiation and the requirements for valid termination of a contract, including the necessity of adhering to specified cure periods.

Analysis

The court found that Plaintiff's termination of the Agreement constituted anticipatory repudiation because she acted before the expiration of the correct cure period. The court noted that AVIC had made a timely attempt to cure the default, which was rejected by Plaintiff's counsel. Therefore, the court concluded that the Agreement remained in effect, and Defendants were entitled to specific performance and damages.

The court found that Plaintiff's termination of the Agreement constituted anticipatory repudiation because she acted before the expiration of the correct cure period. The court noted that AVIC had made a timely attempt to cure the default, which was rejected by Plaintiff's counsel. Therefore, the court concluded that the Agreement remained in effect, and Defendants were entitled to specific performance and damages.

Conclusion

The court held that Plaintiff's termination was ineffective, and Defendants were entitled to specific performance of the Agreement and damages for the breach.

The court held that Plaintiff's termination was ineffective, and Defendants were entitled to specific performance of the Agreement and damages for the breach.

Who won?

Defendants (AVIC and Debtor) prevailed because the court found that Plaintiff's termination was invalid and that they had properly attempted to cure the default.

Defendants (AVIC and Debtor) prevailed because the court found that Plaintiff's termination was invalid and that they had properly attempted to cure the default.

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