In Re Computer Communications, Inc., Debtor. Computer Communications, Inc. v. Codex Corporation

Codex Corporation (Codex) appeals a judgment of the district court affirming the bankruptcy court’s determination that Codex violated the Bankruptcy Code’s automatic stay provision, 11 U.S.C. § 362 (1982), and breached its contract with Computer Communications, Inc. (CCI). Codex unilaterally terminated its contract to purchase computer equipment from CCI after CCI filed a petition for reorganization under Chapter 11.

I

Codex designs and manufactures communications equipment and networks used for transmitting information between complex computer systems. CCI is a manufacturer of computer equipment and software. In April 1979, Codex and CCI entered into a “Joint Marketing and Development Agreement.” The heart of the Agreement provided that Codex would make minimum quarterly purchases of equipment and software from CCI for incorporation in Codex’s products. The parties executed an Amended Agreement on November 4, 1980 for a term of four years commencing April 1979. The Agreement provided for enhanced price discounts retroactive to April 1979. It contained the usual provisions for invoicing, payment, delivery, performance and warranty. The value of the purchases under the Agreement…