Judge Ronnie Abrams
Under their March 2011 contract, Magner agreed to sell the Invest.com domain name to Heath Global for $2 million over two years. The pact provided Magner a "Seller Special Remedy" if Heath did not make timely payments. Under their escrow agreement Magner assigned the domain name to the escrow agent, which was charged with receiving Heath’s payments and disbursing them to Magner. After Heath defaulted payment, it sought Chapter 11 bankruptcy relief on Feb. 8, 2012. Bankruptcy court granted Magner summary judgment in his May 20 adversary proceeding seeking a declaration that the sale agreement terminated, and that Heath had no further rights thereunder. It held that the sale agreement terminated by its terms, not pre-petition. District court remanded. Despite agreeing that the sale agreement did not terminate pre-petition, it rejected bankruptcy court’s conclusion that Heath lacks any rights under the sale agreement. The agreement’s termination required a post-petition act. Termination could be effected only after Magner sent a second written termination notice. The automatic stay triggered by Heath’s Feb. 8, 2012, Chapter 11 filing precludedand still precludesMagner from providing the required second written notice.
