Post-Bankruptcy Petition Lease Enforceable Against Debtor in Possession as a Matter of Law.

The defendant, a dairy farm, filed for Chapter 11 bankruptcy protection. Thereafter, the plaintiff entered into a contract with defendant to lease 240 cows to defendant for $13,056 per month for 48 months. The plaintiff began delivering the cows to the defendant several weeks after the court confirmed the plan. The defendant made regular payments under the lease until a principal of the defendant was seriously injured in a farm accident and the defendant was forced to cease operation of the farm. The defendant then breached its lease and the plaintiff retrieved the cows. The plaintiff filed a breach of contract action against the defendant, and the defendant argued that court approval was necessary for the lease because the lease was not an unsecured transaction. In granting partial summary judgment in favor of the plaintiff, the court ruled that the lease was enforceable against the defendant as debtor-in-possession because this was a post-petition contract negotiated by the debtor-in-possession on behalf of the estate. Sunshine Heifers, LLC v. Moohaven Dairy, LLC, No. 13-10319, 2014 U.S. Dist. LEXIS 52294 (E.D. Mich. April 16, 2014).

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