Opinion ID: 423752
Heading Depth: 1
Heading Rank: 5

Heading: Receipt of Benefits and Assumption of Burdens

Text: 28 Data-Link next contends that a finding that Keller assumed the contract is necessary to avoid the inequitable result of allowing Whitcomb & Keller to derive the benefits of the contract without assuming its burdens. 29 In the first place, it may be noted that general principles governing contractual benefits and burdens do not always apply in the bankruptcy context. The purpose of the Bankruptcy Code is to suspend the normal operation of rights and obligations between the debtor and his creditors. Fontainebleau Hotel Corp. v. Simon, 508 F.2d 1056, 1059 (5 Cir.1975). Moreover, successful reorganization under Chapter 11 depends on relieving the debtor of burdensome contracts and pre-petition debts so that additional cash flow thus freed is used to meet current operating expenses. H.R.Rep. No. 595, 95th Cong., 1st Sess. 221 (1977), reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 5963, 6181. The post-petition services provided by Data-Link were operating expenses which Whitcomb & Keller paid in full. But merely providing such services did not alter Data-Link's position as a general unsecured creditor on its pre-petition claim. U.S. Financial, Inc. v. Pacific Telephone & Telegraph, 594 F.2d 1275, 1279 (9 Cir.1979); In re Kassuba, 396 F.Supp. 324, 326 (N.D.Ill.1975). 30 The cases upon which appellant relies are factually distinguishable. Here it is undisputed that Whitcomb & Keller paid in full for all services rendered during the administration of the estate, including the preparation of the data base tape. The only alleged breach of the executory contract relates to the indebtedness owed by Whitcomb & Keller when the petition was filed. Data-Link suffered no harm nor prejudice through the continued utilization of its computer services. Rather it presumably earned a profit from the continued use. 5 We agree with the district court that Whitcomb & Keller's utilization of the computer services during the administration of the estate did not support a finding that Whitcomb & Keller assumed the contract or that Data-Link was entitled to a priority. 31