In Re Sigel & Co., Ltd., Debtor. Manning J. Post v. Sigel & Co., Ltd.

Manning J. Post (Post) appeals from a judgment of the district court denying his appeal from a bankruptcy court order. Post had entered into a joint venture agreement with the debtor, Sigel & Co., Ltd. (Sigel). The bankruptcy court held that the joint venture agreement was an executory contract assumable by Sigel, and the district court affirmed. A critical question we must determine is whether a party in reorganization has power to cure a default in an executory contract although the contract does not provide for such a cure. We affirm the judgment of the district court.

FACTS AND PROCEEDINGS

On July 11, 1979, Sigel & Co. and Manning J. Post entered into a joint venture agreement for the purpose of acquiring, holding and selling parcels of real property located in Clark County, Nevada. Under the joint venture, each party agreed to pay its proportionate share of all financial obligations, including loans secured by the real property. Paragraph 8 of the agreement provided that in the event a party failed to pay its pro rata share, the remaining party would be entitled to make such payment and would have the option to purchase the defaulting party’s interest in the joint venture…