In Woodbridge Wind-Down Entity v. Monsoon Blockchain Storage (In re Woodbridge Group of Companies), Adv. Proc. No. 19-50102 (BLS), 2020 Bankr. Lexis 1944 (Bankr. D. Del. July 15, 2020), the U.S. Bankruptcy Court for the District of Delaware addressed the issue of when an arbitration provision should be enforced in connection with post-petition contracts entered into by and between a debtor and a counterparty.

In this case, the debtors, post-petition (actually, post-confirmation but prior to the effective date of their plan), entered into a certain asset purchase agreement (the APA) with Monsoon Blockchain Storage Inc. for the purchase of certain real property owned by the debtors. Prior to the effective date of the debtors’ plan, the debtors alleged that the defendant breached the APA by failing to close and consummate the sale. As a result of the defendant’s asserted breaches of the APA, the debtors filed a complaint in the bankruptcy court seeking a declaration that the deposit previously paid by the defendant was now property of the debtors’ estates and sought to compel the defendant to remit the balance of the contractual purchase price.

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