Opinion ID: 736257
Heading Depth: 2
Heading Rank: 4

Heading: Four B's Contractual Right to Match Competing Offers

Text: 29 Finally, Four B alleges that the bankruptcy court committed reversible error by refusing to respect its contractual right to match Schnuck's $1.6 million offer. As we understand this argument, Four B claims that the right of first refusal granted by the Purchase Agreement afforded it the option to complete the sale by matching a competing suitor's first offer. Under this theory, Schnuck's $2.1 million proposal was, for practical purposes, void, and the bankruptcy court was wrong to ignore Four B's prerogative to close the deal by matching Schnuck's initial $1.6 million submission. 30 We do not read the contract's match provision as broadly as Four B. The operative paragraph indicates that the company enjoyed the opportunity to match all competing bids, but it says absolutely nothing about limiting Food Barn's ability to entertain multiple offers from the same party. The express terms of the Purchase Agreement gave Four B the privilege to secure assignment of the lease by equalling another bidder's offer, and the bankruptcy court scrupulously honored this aspect of the bargain. Four B obtained the lease by matching Schnuck's $2.1 million submission, and it has no foundation from which to argue that the court ignored the bid protection feature. 31 In any event, we would be extremely reluctant to hold a bankruptcy court to the particulars of the right of first refusal envisioned by Four B. Some amount of bid protection is, of course, permissible under the Code, and the trustee is not normally required to seek court approval before in good faith entering into an agreement which includes a right of first refusal. See In re Table Talk, Inc., 53 B.R. 937, 942 (Bankr.D.Mass.1985). A contrary position might discourage potential buyers from negot[i]ating with trustees, thereby forcing down the market value of the bankruptcy estate['s] property in general. Id. Still, it would be unwise to allow the parties to hamstring the court's discretion to implement bidding procedures it deems to be fit under the circumstances. The bankruptcy judge must retain the capability to conduct sales in a manner that most benefits the bankruptcy estate, and we would be loath to accept any contractual provisions that purport to limit this authority.