In the

United States Court of Appeals

For the Seventh Circuit ____________

No. 07-1879

IN RE:

RESOURCE TECHNOLOGY CORPORATION,

Debtor,

CHIPLEASE, INC. and

SCATTERED CORPORATION,

Plaintiffs-Appellants,

v.

JAY A. STEINBERG, as Chapter 7 Trustee

for RESOURCE TECHNOLOGY CORPORATION, et al.,

Defendants-Appellees.

____________

Appeal from the United States District Court

for the Northern District of Illinois, Eastern Division.

No. 06 C 5541—Matthew F. Kennelly, Judge.

____________

ARGUED DECEMBER 7, 2007—DECIDED MAY 15, 2008

____________

Before POSNER, ROVNER, and WILLIAMS, Circuit Judges.

ROVNER, Circuit Judge. Plaintiffs-appellants Chiplease,

Inc. and Scattered Corporation (collectively, “Scattered”)

wanted to step into the shoes of debtor Resource Technology Corporation (“RTC”) in a contract that RTC had
2 No. 07-1879

with American Disposal Services of Illinois, Inc. (“ADS”).

After the trustee of RTC’s estate refused to seek the bankruptcy court’s permission to assume the ADS agreement and assign it to Scattered, Scattered asked the bankruptcy court to compel the trustee to do so. The bankruptcy

court denied Scattered’s request, concluding that the

agreement had already expired and that a motion by

the trustee to assume the agreement would consequently be frivolous and subject to sanctions. Scattered

appealed to the district court, which affirmed the bankruptcy court’s decision. Chiplease, Inc. v. Steinberg (In re

Resource Tech. Corp.), No. 06 C 5541, 2007 WL 898423 (N.D.

Ill. Mar. 20, 2007). Scattered again appeals, and we affirm.

I.

RTC is a Delaware corporation that installs collection

systems at landfills to capture the methane gas created

by degrading waste and then either uses it to fuel electric

generators and produce electricity or sells the gas to

others. In December 1995, RTC entered into a contract

with ADS pursuant to which RTC committed to build and

operate gas-to-energy facilities at four ADS landfills in

Pontiac, Illinois, Wheatland, Kansas, Wyandot, Ohio, and

Clarion, Pennsylvania (hereinafter, the “agreement” or

the “ADS agreement”). The agreement was for an initial

term of ten years, expiring on December 21, 2005. RTC

had a right to extend the agreement beyond this term

(provided that the parties had not already terminated

their arrangement) for up to three consecutive periods of

five years. In order to exercise its right to extend the

agreement beyond its initial term, RTC was required to

send ADS by certified or registered mail written notice

of its intent to renew at least thirty days prior to the
No. 07-1879 3

December 21, 2005 expiration date, i.e., no later than

November 21, 2005. Allied Waste Industries (“Allied”) later

succeeded to ADS’s rights under this agreement.

In 1999, RTC was placed involuntarily into Chapter 7

bankruptcy by certain of its creditors. RTC converted the

proceeding to a Chapter 11 reorganization. RTC subsequently assumed that portion of its agreement with Allied

relating to the landfill in Pontiac, Illinois, see 11 U.S.C.

§§ 365(a), 1107(a), but did not assume the balance of the

agreement concerning landfills in Wheatland, Wyandot,

and Clarion. In September 2005, on the motion of several

creditors, then-Chief U.S. Bankruptcy Judge Eugene

Wedoff converted the case back to a Chapter 7 proceeding

and appointed Jay A. Steinberg as the trustee of RTC’s

estate.

On November 16, 2005, the trustee’s counsel wrote to

counsel for Allied seeking to extend the deadline by

which the ADS agreement could be renewed. The letter

sought Allied’s agreement to move the renewal deadline

from November 21, 2005 to December 31, 2005. Allied’s

counsel replied on November 19, 2005, agreeing to the

extension through December 31, 2005 insofar as the

Pontiac landfill was concerned. Counsel added that it

was Allied’s view that the agreement had already terminated as to the three other landfills outside of Illinois

(Wheatland, Wyandot, and Clarion). She therefore noted

that Allied was consenting to the trustee’s request for

an extension of time to renew the ADS agreement only

insofar as RTC had any remaining rights under that

agreement and without prejudice to Allied’s position that

all but the Pontiac portion of the agreement had terminated. Id.

Although the deadline for renewing the Pontiac portion

of the ADS agreement had thus been extended, the final
4 No. 07-1879

day of 2005 came and went without any renewal of the

agreement. Nor did the parties agree to any further extensions of the renewal date.

In March 2006, the Trustee entered into a settlement

agreement with Scattered, among other entities, resolving

certain disputes (the “settlement”). That agreement was

subsequently approved by the bankruptcy court. Pursuant

to the court’s order approving the settlement, Scattered

obtained the right to designate certain of RTC’s contracts that Scattered wanted to take over. Once Scattered

designated a contract in which it was interested, the

trustee would seek the bankruptcy court’s permission to

assume the contract and, upon securing that authority,

assign the contract to Scattered pursuant to sections 365(a)

and (f) of the Bankruptcy Code. However, the order

provided further that Scattered “shall not have the right

to designate any Contract . . . if the Estate believes in

good faith that a particular designation will result in the

Estate being subject to sanctions pursuant to Fed. R. Bankr.

P. 9011 or allegations of bad faith . . . .” In the event that

the trustee refused to pursue assumption and assignment

of a contract on that basis, the settlement entitled Scattered

to ask the bankruptcy court to compel the trustee to

assume and assign the contract in question.

Prior to the execution and court approval of the settlement, the trustee had sought and obtained from the

bankruptcy court a series of extensions of time in which

to assume or reject executory contracts and unexpired

leases. The first of these motions was filed on November 8,

2005. In it, the trustee sought an extension of time until

January 31, 2006, to assume or reject a number of contracts,

among them the ADS Agreement. The motion indicated

that the ADS agreement was set to expire on December 21,
No. 07-1879 5

2005, and that there was a deadline of November 21,

2005 by which date notice of an intent to extend the

contract had to be sent. The motion did not seek an extension of the life of the ADS agreement itself, only an extension of time for the trustee to assume or reject that contract

and the others listed in the motion. Indeed, at the hearing

on the motion, when Judge Wedoff inquired, “If [a] contract was terminated . . . , what more can be done?”,

the trustee’s counsel responded, “If a contract was terminated, then it’s terminated.” In that vein, the trustee

acknowledged Allied’s position that a number of its

agreements with RTC, including portions of the ADS

agreement concerning facilities other than the Pontiac

facility, had already been terminated. For that reason, the

Trustee’s request to assume the balance of the ADS agreement was continued. Following that hearing, the bankruptcy court on November 17, 2005, entered an order

granting the trustee’s motion and thereby extending

until January 31, 2006, the time in which the trustee

could assume or reject the Pontiac portion of the ADS

agreement. The attachment to that order listing the contracts as to which time had been extended again indicated

that the Pontiac portion of the ADS agreement was set

to expire on December 21, 2005, and that the trustee had

until November 21, 2005, to send a notice of his intent to

extend the term of that contract. As we noted above,

on November 19, 2005, Allied’s counsel agreed to the

trustee’s request that the renewal deadline for ADS agreement be extended until December 31, 2005.

Subsequently, on November 30, 2005, the bankruptcy

court entered a second order, this one expressly agreed to

by and between the trustee and Allied, extending the

trustee’s time to renew or reject all portions of the ADS
6 No. 07-1879

agreement until January 31, 2006. The text of that order

expressly acknowledged Allied’s position that all but

the Pontiac portion of the ADS agreement had already

terminated and preserved Allied’s right to so assert in

future proceedings.

Scattered points out that there were two additional

orders that granted extensions of time to the trustee

for purposes of assuming or rejecting unexpired contracts and leases. On or about January 18, 2006, the

trustee sought an extension of time to assume or reject

from January 31, 2006 to February 28, 2006. The attached

list of contracts as to which the trustee sought the extension included several contracts relating to the Pontiac

facility, but not the Pontiac portion of the ADS agreement.

Interestingly, the trustee did seek additional time to

assume or reject the portions of the ADS agreement

concerning the Wheatland, Wyandot, and Clarion landfills.

And when the parties appeared before the bankruptcy

court for the hearing on the motion, Allied’s counsel

objected to the request for more time on the ground that

these portions of the agreement had already been terminated. Judge Wedoff made the following remarks concerning Allied’s objection and a similar objection raised

by the City of Columbus:

THE COURT: [W]hat will happen, Ms. Gelman [counsel for Allied], is that I can grant this motion. And if

the trustee should hereafter attempt to assume a

contract that’s already been terminated, I am sure you

will let me know. And I am also sure that Mr. Steinberg

wouldn’t waste his time trying to assume an already

terminated contract. So I think it is safe to grant this

motion.

MS. RZEPKA: Your Honor, Natalia Rzepka for the

City of Columbus. I just wanted to state our objection
No. 07-1879 7

on the record. I believe Your Honor denied the debtor’s

motion to assume our contract back in 2003.

THE COURT: Right. It’s covered by the same remarks

that I just made.

MS. RZEPKA: Yes.

THE COURT: All that is happening here is that to

the extent the trustee does have unexpired leases or

unterminated executory contracts, this preserves the

trustee’s right to assume or assign those contracts.

It would otherwise be cut off, and the contracts would

be deemed rejected. If you’ve got a contract that’s

already terminated, it’s not going to be affected by an

extension.

The bankruptcy court’s decision to grant the trustee’s

motion was memorialized in an order dated January 27,

2006; and, consistent with the trustee’s motion, the attached

list of contracts as to which the extension of time was

being granted did not include the Pontiac portion of the

ADS agreement. In accord with the court’s remarks at

the hearing on the motion, the order contained the following provisions qualifying the nature of the extension

that the court was granting to the trustee:

1. With respect to certain landfills identified on

Exhibit A which are owned by American Disposal

Services, Inc. and Allied Waste Industries, Inc. (collectively, along with its respective subsidiaries and

affiliates, “Allied”):

(a) In regards to that portion of the December 21,

1995 contract involving the Wheatland, Clarion,

and Wyandot landfill sites (the “Disputed Contract

Sites”), and only to the extent RTC possesses any
8 No. 07-1879

contract rights to or at the Disputed Contract

Sites (which Allied disputes), the time by which

the Trustee can move to assume or reject the Disputed Contract Site portion of the contract is

extended to February 28, 2006.

* * *

5. Nothing in this Order shall extend the right to

assume or reject any contract that has already expired or been terminated and nothing in this Order

shall be deemed to be a release or waiver of any right,

claim or cause of action of any kind that any party

(and/or its affiliates and subsidiaries) to such contracts may have that such contracts have expired

and/or been terminated prior to the date of this Order.

The following month, as the February 28, 2006 deadline

for assumption or rejection of these contracts approached,

the trustee sought another extension of time to April 28,

2006. Again, although other Pontiac-related contracts

were included in the list of contracts as to which the trustee

was seeking additional time, the Pontiac portion of the

ADS agreement was not among them. The court granted

that motion on March 16, 2006. Its order contained the

same qualifying language as the January 27 order.

It was also on March 16, 2006, that the bankruptcy court

signed the order approving the settlement between Scattered (among other parties) and the trustee that gave

Scattered the right to designate various contracts for

assumption and assignment by the trustee. Scattered

subsequently designated the ADS agreement as one of

the contracts that it wished to assume. But the trustee’s

counsel, in the face of objections from Allied that the

ADS agreement had by this time expired in its entirety,

wrote to Scattered’s counsel on May 12, 2006, to inform
No. 07-1879 9

Scattered that the trustee would not seek to assume the

ADS agreement (among others) unless compelled to do

so by the district court. Scattered proceeded to file a motion asking the bankruptcy court to do just that. Allied

objected, contending that because the ADS agreement

had expired by its terms on December 31, 2005, it could not

be assumed as a matter of law, and consequently the

trustee, if he sought to assume the contract, would be

exposed to sanctions under Bankruptcy Rule 9011 and

allegations of bad faith.

The bankruptcy court heard Scattered’s motion on

June 13, 2006 and concluded that because the trustee had

no plausible basis on which to assume the ADS agreement,

which had clearly expired, he had properly refused

Scattered’s demand to seek assumption. The ADS agreement was one of a number of agreements as to which the

trustee had declined to file motions to assume and that

were consequently the subject of motions to compel. The

essential inquiry, as the court acknowledged at the start

of the hearing, was whether the trustee would be making

a frivolous motion, subject to sanctions under Rule 9011,

were he to move to assume these contracts.

The underlying question with all of these is whether

the trustee is reasonably asserting that to pursue a

motion here would violate the trustee’s obligations

under Rule 9011, and so the question here is whether

the trustee has a good basis for believing that pursuing

an assumption here would violate 9011.

The court went on to agree with Allied’s counsel that the

ADS agreement had expired on December 31, 2005,

with the result that there was no longer a valid contract

for the trustee to assume and assign to Scattered. The

court rejected the suggestion of Scattered’s counsel that a
10 No. 07-1879

hearing was required in order to determine whether the

extensions of time the court had granted the trustee to

assume or reject the agreement had also extended the

time to renew the agreement.

There is . . . no need for a hearing. The question that’s

being raised now is whether an order extending the

time for assumption or rejection of an unexpired

[contract] somehow has the effect of extending the

[contract] or extending a deadline for renewal under

the [contract]. Those really are two separate questions.

And each time that there was a motion to extend the

time for assumption or rejection, I heard arguments to

the effect that this has already expired, to which my

response was if it’s already expired, extending the

time for assumption or rejection will have no impact on

the expiration.

So given that we’re dealing with two separate issues

(1) whether the contract has expired and (2) whether

the time for assumption or rejection of the contract

can be extended, I think unless you can point to something, an agreement, an order of the court that extended the time for extending the contract under

the contract terms, there is no basis for the trustee to

assume this contract.

When pressed to identify any court order or agreement extending the renewal date of the ADS agreement

beyond its expiration date of December 31, 2005, Scattered’s counsel could point only to the orders granting

the trustee’s requests for additional time to assume or

reject the contract. The court rejected the notion that those

orders might have extended the life of the agreement:

Okay. I don’t think so. We have always made a distinction between extending the time for the estate to
No. 07-1879 11

assume or reject and the question of whether the

underlying agreement was terminated. And given

that there is that distinction, which, again, was repeatedly made as I granted motions to extend the

time for the trustee to assume or reject, the distinction

was always made that granting the motion in no

way implied that the underlying agreement had not

terminated. That was always a separate consideration. If there is nothing that prevents the expiration

of the underlying agreement according to its terms

other than an allegation that an order extending

the time for the estate to assume or reject is in place, the

trustee does not have a basis for going forward on it.

When Scattered’s attorney suggested that the trustee

might nonetheless have understood or have intended

for these orders to extend the renewal date, the court

pointed out that the trustee’s subjective and unilateral

understanding would not have been sufficient to override the terms of the orders and the underlying contract.

Acknowledging that a bilateral agreement between the

trustee and Allied would have been necessary to extend

the life of the agreement, Scattered’s counsel suggested

that there might be a factual question as to whether Allied

too had intended for the orders to extend the renewal date;

but the court found no basis to support such a question:

No, you’re not going to find anything, I am confident, in the record where Allied’s counsel acknowledges that an extension of time to assume or reject

constitutes an extension of the underlying agreement that’s subject to assumption or rejection. They’ve

been here vociferously arguing for a substantial period

of time that the agreement had terminated. And

entering an order granting the trustee a right to con-
12 No. 07-1879

tinue the time for assumption or rejection has no

impact on that. . . .

The court therefore denied Scattered’s motion to compel the trustee to assume and assign the ADS agreement.

Scattered appealed to the district court, which affirmed

the bankruptcy court’s decision. The court first rejected

Scattered’s contention that the bankruptcy court, in determining whether the ADS agreement had expired,

strayed beyond the issue that was actually before it, i.e.,

whether the trustee had a good faith belief that he

would be sanctioned under Rule 9011 if he sought to

assume and assign the agreement as Scattered had demanded. “Though the court may not have used the magic

words that appellants seem to think were necessary, it is

clear that the court was considering the correct issue.” 2007

WL 898423, at *3. The court observed that whether the

agreement had expired was “intertwined” with the question of whether the trustee had a good faith basis for

declining to pursue assumption of the agreement. Id. “[I]f

there was no objectively reasonable argument that the

ADS agreement had not expired, then the trustee could

not properly pursue an assumption and assignment of

that agreement.” Id. The court found no fault with the

bankruptcy court’s determination that the agreement

had, in fact, expired. Scattered’s argument to the contrary rested on the notion that the bankruptcy court’s

orders allowing the trustee more time to assume or

reject the agreement somehow extended the life of the

agreement, but the orders themselves offered no support

for that notion. “Everyone but the appellants, it seems,

understood the effect of the extension orders.” Id. at *4.

Finally, the court found no error in the bankruptcy

court’s denial of Scattered’s request for an evidentiary
No. 07-1879 13

hearing. “Appellants do not point to any evidence they

would have introduced at an evidentiary hearing that

would have affected the outcome of the motion to compel.” Id. Although Scattered suggested that there were

disputed questions of fact as to the intent of Allied and

the trustee vis-à-vis the ADS agreement, their subjective

intent was immaterial. There was no dispute as to the

relevant provisions of the agreement or as to the orders

granting the trustee additional time to assume or reject

the agreement. Consequently, even assuming that extrinsic evidence as to the parties’ subjective understanding of those matters would have been admissible,

it would not have had any bearing on the bankruptcy

court’s resolution of the motion to compel. Id.

II.

Our first task is to confirm that we have jurisdiction to

hear this appeal, e.g., JMS Dev. Co. v. Bulk Petroleum Corp.,

337 F.3d 822, 825 (7th Cir. 2003), and we are satisfied

that we do. 28 U.S.C. § 158(d)(1) gives us jurisdiction to

review “final” decisions of the district court resolving

bankruptcy appeals. In this case, the district court affirmed

the bankruptcy court’s order denying Scattered’s motion

to compel the trustee to assume and assign to Scattered

a contract between Allied and the debtor, RTC. At least

as of the time this appeal was briefed, there were other,

unrelated agreements between Allied and RTC that

Scattered wished the trustee to assume and assign, and

the disputes over those agreements had not yet been

resolved. Consequently, we cannot say the order at issue

here is final in the sense that it conclusively resolved all

of the claims of one creditor—Scattered—against the

estate. See Golant v. Levy (In re Golant), 239 F.3d 931, 935
14 No. 07-1879

(7th Cir. 2001); In re Morse Elec. Co., 805 F.2d 262, 264

(7th Cir. 1986); see also Fruehauf Corp. v. Jartran, Inc. (In re

Jartran, Inc.), 886 F.2d 859, 863 (7th Cir. 1989). But the

bankruptcy court’s order does definitively resolve Scattered’s unsuccessful attempt to have the trustee assume

and assign one contract; and the issues raised with respect to that contract appear to be distinct and severable

from the proceedings on other contracts between Allied

and RTC. We see no reason why, consistent with the

more flexible jurisdictional standard that we and other

appellate courts apply to bankruptcy appeals, this

matter cannot be resolved now, thereby advancing the

ultimate resolution of RTC’s bankruptcy. See Golant, 239

F.3d at 935. We may therefore proceed to the merits.

Scattered’s threshold contention is that the bankruptcy

court prematurely and improperly determined that the

ADS agreement had expired. Under the terms of the

settlement between Scattered and RTC, the essential

question before the bankruptcy court was whether the

trustee had a good faith belief that he would be subject

to sanctions if he moved to assume the ADS agreement

as Scattered wished him to do. In Scattered’s view, it

was neither necessary nor appropriate for the court to

resolve whether the ADS agreement had expired; all that

the court needed to determine was whether a motion by the

trustee to assume the agreement would be frivolous, and

therefore subject to sanctions under Bankruptcy Rule 9011.

Cf. Orion Pictures Corp. v. Showtime Networks, Inc. (In re

Orion Pictures Corp.), 4 F.3d 1095, 1098-99 (2d Cir. 1993)

(error for bankruptcy court to resolve factual disputes

regarding alleged breach of contract, where only question

properly before the court was whether debtor or trustee

should be permitted to assume the contract); but see In re
No. 07-1879 15

White Glove, Inc., Nos. 98-12493DWS & 98-12494DWS, 1998

WL 731611, at *4 n.12 (Bankr. E.D. Pa. Oct. 14, 1998) (coll.

cases questioning holding of Orion Pictures).

However, the record leaves no doubt that the bankruptcy

court understood what the relevant inquiry was and

properly answered it. The court not once but twice remarked that the underlying question posed by the motions to compel the trustee to assume various contracts

was whether the trustee would be violating his obligations under Rule 9011 by moving for assumption. With

respect to the ADS agreement, the trustee’s concern about

Rule 9011 sanctions arose from the apparent expiration

of the agreement. Scattered itself agrees that “[i]f the

ADS Agreement expired, there would be nothing for the

Trustee to assume or reject.” Scattered Br. 13. See R.

Ginsberg & R. Martin, GINSBERG & MARTIN ON BANKRUPTCY § 7.01[C], at 7-8 n.37 (4th ed. 1995) (updated &

current through 2007) (“Of course, if the executory contract (or lease) expires by its own terms during the

postpetition, pre-assumption/rejection period, the trustee

will have nothing to assume or reject.”). Scattered is

certainly correct in contending that the susceptibility of a

claim (or argument) to sanctions under Bankruptcy Rule

9011 or Federal Rule of Civil Procedure 11 does not necessarily require resolution of the merits of the underlying

claim. See Cooter & Gell v. Hartmarx Corp., 496 U.S. 384,

396, 110 S. Ct. 2447, 2456 (1990) (order imposing Rule 11

sanctions “does not signify a district court’s assessment

of the legal merits of the complaint”); see also Willy v.

Coastal Corp., 503 U.S. 131, 112 S. Ct. 1076 (1992) (court

can impose Rule 11 sanctions even if, in retrospect, it

lacked subject matter jurisdiction over merits of the case).

But that does not mean that the question of sanctions
16 No. 07-1879

can be divorced from the merits of the claim deemed

sanctionable. Obviously, a court cannot determine whether

a claim has a reasonable basis in law or fact, see Rule

9011(b)(2) and (3), without examining the legal and factual

foundations of the claim; to that extent, the charge that a

claim is sanctionable necessarily overlaps with the merits

of the claim. See Cleveland Hair Clinic, Inc. v. Puig, 104 F.3d

123, 125 (7th Cir. 1997); City of E. St. Louis v. Circuit Court

for Twentieth Judicial Circuit, St. Clair County, Ill., 986 F.2d

1142, 1143 (7th Cir. 1993). Thus, in assessing whether

the trustee had a good faith concern about sanctions,

the court necessarily had to consider whether there was

a plausible basis to argue that the ADS agreement had

not, in fact, expired. That is precisely what the court did:

it considered the parties’ respective positions as to the

expiration of the ADS agreement and concluded that

there was no reasonable factual or legal basis for the

contention that the agreement had not expired, such that

the trustee could move to assume the contract without

fear of being exposed to sanctions. Scattered was not

deprived of any right by the manner in which the court

proceeded. The settlement between Scattered and the

estate, and Scattered’s motion to compel, put the propriety

of a motion to assume the ADS agreement squarely in

the bankruptcy court’s hands. The court gave Scattered a

full opportunity to identify a basis on which the ADS

agreement could be thought not to have expired; the

court simply found that none of the bases that Scattered

identified was plausible.

Here as below, Scattered points to the orders extending

the time for the trustee to assume or reject the ADS contract as a basis for contending that the agreement had not

expired; but we are no more persuaded than the lower
No. 07-1879 17

courts were. These were the bankruptcy court’s own

orders, and we must defer to its understanding of what

those orders accomplished unless its interpretation was

unreasonable. See Enodis Corp. v. Employers Ins. of Wausau

(In re Consol. Indus.), 360 F.3d 712, 716 (7th Cir. 2004). The

language of these orders was limited to the time in

which the trustee could assume or reject the agreement;

nothing in any of the orders spoke of extending the time

to renew the ADS agreement. Nor did the trustee, in

moving for the entry of these orders, say anything about

extending his time to renew the ADS agreement. There is

a plain paper trail to the one instance in which the trustee

did obtain an extension of time in which to renew the

ADS agreement: in that instance, in accord with the

provisions of the agreement, the trustee wrote to Allied’s

counsel and requested an extension from November 25,

2005 to December 31, 2005 to send notice of his intent

to renew the Pontiac portion of the agreement. Allied

agreed, and the renewal date was extended for that portion

of the agreement. That exchange demonstrates that the

trustee was well aware of the process by which he could

obtain additional time to renew the ADS agreement.

Notably, the two orders granting the trustee additional

time to assume or reject the Pontiac portion of the agreement—the first, entered on November 17, 2005, being

a general order dealing with multiple agreements including

the Pontiac portion of the ADS agreement, and the second,

entered on November 30, 2005 dealing specifically with the

Pontiac portion of the agreement—were entered prior to

the extended deadline of December 31, 2005 for renewal of

the Pontiac portion of the agreement. After December 31,

2005 came and went without renewal, the motions seeking

additional time for the trustee to assume or reject the

estate’s contracts and leases made no further mention of
18 No. 07-1879

the Pontiac portion of the agreement, nor did the orders

granting those motions mention it. Additional extensions

of time to assume or reject were sought as to other portions

of the ADS agreement. But as to those portions of the

agreement, Allied consistently took the position that the

agreement had already been terminated. And for his part,

the trustee from the beginning acknowledged that granting

him an extension of time to assume or reject the agreement

would not somehow revive a contract that had already

been terminated. The court itself acknowledged the same,

and its later orders memorialized that acknowledgment.

Scattered suggests that there are unexplored questions

as to what the trustee’s intent was in moving to extend

the time to assume or reject—questions that Scattered

thinks raise doubts as to whether the ADS agreement

actually expired—but we disagree. Scattered offers no

explanation as to why the trustee’s (unexpressed) intent

could have any impact on the expiration of the agreement.

See, e.g., Sethness-Greenleaf, Inc. v. Green River Corp., 65

F.3d 64, 67 (7th Cir. 1995) (applying Illinois law) (“Contractual obligations are created and defined by objective signals

the parties exchange. Private expectations are of

no consequence.”) (citations omitted); Midland Hotel

Corp. v. Reuben H. Donnelley Corp., 515 N.E.2d 61, 65 (Ill.

1987) (“defendant’s subjective understanding of the terms

of the contract is immaterial”); Carey v. Richards Bldg.

Supply Co., 856 N.E.2d 24, 27 (Ill. App. Ct. 2006) (“it is

commonly stated that undisclosed intentions are not

relevant” in contract interpretation). Contrary to Scattered’s contention, this is not a case like M.K. Labs., Inc. v.

Int’l Developers (In re M.K. Labs., Inc.), 86 B. R. 12 (Bankr. D.

Conn. 1988), where the parties on two occasions, in stipulating to an extension of the debtor’s time to assume or
No. 07-1879 19

reject an unexpired lease, recited that the lease still had

eleven more years to run when in fact the lease had only

months left to run and the first option to extend the

original term had already expired. Under that circumstance, the bankruptcy court concluded that the landlord either actually or impliedly had agreed not only to

extend the debtor’s time to assume or reject the lease, but

to extend the option to renew the lease as well. Id. at 14.

Here, there is no such manifestation of a shared belief as

to the continued life of the ADS agreement. Allied from

the beginning maintained that the ADS agreement had

expired except as to the Pontiac facility; it agreed only

to one extension of time to renew the Pontiac portion of

the agreement; and once the extended renewal date as to

the Pontiac facility passed without the trustee renewing

that portion of the agreement, Allied contended that the

entire agreement had expired. The trustee plainly knew

what was required to extend the life of the agreement

but made no effort to do so beyond December 31, 2005.

Any unexpressed belief on his part that the agreement

survived beyond that date could not have trumped the

unambiguous terms of the agreement or the unambiguous

terms of the orders granting him additional time to

assume or reject the ADS agreement.

Scattered also suggests that Allied may have somehow waived or become estopped from asserting the

expiration of the ADS agreement, but the record bespeaks

the contrary. As we have just said, Allied consistently

took the position that all but the Pontiac portion of the

ADS agreement had already been terminated before the

trustee began seeking additional time to assume or

reject the agreement, and once the extended renewal

date of December 31, 2005, passed without the trustee

renewing the Pontiac portion of the agreement, contended
20 No. 07-1879

that that portion of the agreement had expired as well.

Allied’s counsel always maintained that the extensions

of time to assume or reject could have no impact on the

expiration of the agreement. Judge Wedoff expressly

acknowledged that this had always been Allied’s position,

and his own remarks and orders in granting the trustee’s

motions for additional time to assume or reject recognized that these extensions would not revive an otherwise expired agreement. The notion that Allied somehow sat on its rights and could be precluded from arguing

that the ADS agreement expired is untenable.

Finally, we, like the district court, reject Scattered’s

contention that the bankruptcy court was obliged to

conduct an evidentiary hearing before denying its motion

to compel the trustee to assume and assign the ADS

agreement. The notion that an evidentiary hearing

was required assumes that the existing record as to the

expiration of the ADS agreement was somehow ambiguous or incomplete and that additional evidence

was necessary to fill in the gaps. But as we have discussed, nothing in the record before the bankruptcy

court raised any doubt as to the expiration of the ADS

agreement. Moreover, Scattered has never articulated

what evidence it might present at such a hearing that

would be relevant to the expiration of that agreement and

to the trustee’s good faith in refusing to seek the assumption of that agreement. Even when asked at oral argument,

Scattered’s counsel was unable to identify any evidence

that it might have produced at such a hearing. See, e.g.,

Laserage Tech. Corp. v. Laserage Labs., Inc., 972 F.2d 799,

804 (7th Cir. 1992) (appellate argument as to district

court’s failure to conduct hearing waived where, inter

alia, appellant did not identify what evidence court

would have heard at hearing other than evidence
No. 07-1879 21

already before the court). As the bankruptcy court itself

concluded, no such hearing was necessary.

III.

As the district court held, the bankruptcy court committed no error in denying Scattered’s motion to compel

the trustee to assume and assign the ADS agreement.

Because the agreement had expired and there was no

plausible argument to the contrary, the trustee would

have been violating his obligations under Bankruptcy

Rule 9011 had he sought to assume the agreement. For

these and the other reasons we have discussed, we AFFIRM

the district court’s judgment.

USCA-02-C-0072—5-15-08