In In re Brick House Properties, Bk. No. 20-26250, (Bankr. D. Utah June 11, 2021), the U.S. States Bankruptcy Court for the District of Utah denied a debtor’s motion to reject its prepetition contract for the sale of real property under Section 365 of the Bankruptcy Code. The bankruptcy court found that because the debtor was already subject to a state court-specific performance order compelling it to take the ancillary steps necessary to close the sale, the contract was no longer executory and could not be rejected.


The debtor in this case, Brick House Properties, LLC, owned real property and improvements in Riverton, Utah worth approximately $1.59 million as of December 2020. Included among the real property were about 1.4 acres of pastureland. On Aug. 3, 2016, Brick House entered into a real estate purchase contract to sell 1.005 acres of the pastureland to Vesna Capital, LLC for $250,000. The pastureland was located in a desirable suburb of Salt Lake City, and Vesna intended to subdivide the land into two residential building lots. The parties’ contract provided that the deadline to close the sale “shall be 10 days after receiving Riverton City approval of the subdivision and recordation of the subdivided property.”