Court Opinion

ID: 3024433
Source: CourtListenerOpinion
Date Created: 2015-10-13 22:31:21.742458+00
Date Added: 2024-06-11T11:52:40.257600
License: Public Domain

United States Court of Appeals
                           FOR THE EIGHTH CIRCUIT
                                   ___________

                                   No. 99-1952
                                   ___________

In re: Inter-City Beverage Co., Inc.;   *
Metro Distributors of Kansas, Inc.,     *
                                        *
             Debtors,                   *
                                        *
                                        *
Coors Brewing Co.,                      * Appeal from the United States
                                        * District Court for the Western
             Creditor - Appellant,      * District of Missouri.
                                        *
       v.                               *        [UNPUBLISHED]
                                        *
Inter-City Beverage Co., Inc.; Metro    *
Distributors of Kansas, Inc.,           *
                                        *
             Debtors - Appellees.       *
                                   ___________

                             Submitted: January 12, 2000
                                 Filed: March 2, 2000
                                  ___________

Before HANSEN, BRIGHT, and FAGG, Circuit Judges.
                            ___________

PER CURIAM.

       Inter-City Beverage Company, Inc. and Metro Distributors of Kansas, Inc.
(collectively "Debtors") distributed the beer products of Coors Brewing Company
("Coors") in the Kansas City area from 1989 until 1996 pursuant to a Distributorship
Agreement.1 In May 1996, the Debtors filed a Chapter 11 bankruptcy petition.
Debtors sought to sell their assets to Big Sky Holdings, LLC ("Big Sky") and Coors
entered into a new distributorship agreement with Big Sky. In connection with the sale
of assets, the Debtors and Coors entered into a stipulation agreement providing, among
other things, that the parties preserve for later resolution whether Debtors and Coors
are required to give mutual releases pursuant to the Distributorship Agreement. After
Debtors completed the sale of assets to Big Sky, Coors filed a motion to require the
Debtors to deliver releases of all claims against Coors pursuant to the Distributorship
Agreement. The bankruptcy court denied relief. Coors appealed to the district court
and that court affirmed on different grounds. Coors appeals, and we affirm.

        In this proceeding, Coors contends that the provisions in the Distributorship
Agreement, providing for mutual releases between the parties if the Debtors transfer
or sell the business assets, require that the Debtors furnish Coors with a release because
Coors has already tendered its release to the Debtors. The district court, in affirming
the bankruptcy court's denial of relief, rejected Coors' position because it found that the
parties terminated the Distributorship Agreement and the rights flowing from that
agreement were also terminated. We agree with this disposition and would affirm on
the basis of the district court opinion.

      Alternatively, after having reviewed the briefs and records in this case, we
conclude that Coors' claims to obtain these mutual releases based on provisions of the
Bankruptcy Code, terms of the Distributorship Agreement, and state law rights must

      1
        The arrangements between Coors and the Debtors consisted of two distinct
distributorship agreements: one covering Kansas City, Missouri and one covering
Kansas City, Kansas. See J.A. at 964-997. The agreements are identical in all material
respects, and thus we refer to them as a singular agreement.

                                           –2–
fail also. This assessment assumes that by reason of the reservation of rights in the
stipulation, Big Sky obtained the assets on direct transfer from the Debtors.

       Coors is not entitled to adequate protection on the transfer of the property
pursuant to 11 U.S.C. § 363(e), because its claimed property right to restrict the right
of the Debtors to sell the business is not an interest that 11 U.S.C.§ 363(e) recognizes.
In addition, Coors' claim of a right to specific performance on the ground that Debtor
breached the contract is also unavailing. Because the parties agreed and stipulated to
the manner in which the sale of assets was to occur, Debtors did not breach the
contract.

        Further, Coors' claim to entitlement to the mutual releases under provisions of
state law is not supported by its case citations. Coors relies principally upon In re
Schauer, 835 F.2d 1222 (8th Cir. 1987). That case is distinguishable because the rights
of the trustee in bankruptcy to transfer property were constrained by specific provisions
of state law. Coors has cited no provision in Missouri or Kansas law (where the
distributorships were in effect) that gives it any type of legal interest in the assets sold
to Big Sky pursuant to 11 U.S.C. § 363(b).

       Accordingly, we affirm the district court. We observe that the basis for the
bankruptcy court's rejection of Coors' claim rested not on legal grounds but on the
ground that equity prevented Coors from enforcing the provisions of the Distributorship
Agreement providing for mutual releases. The district court alternatively affirmed on
that basis. We note that the issue of whether the unclean hands doctrine prevented
Coors from obtaining relief in the form of specific performance is not necessary to the
resolution of this case. Accordingly, we do not decide whether equity bars Coors from
obtaining an equitable remedy. We vacate the district court's alternative ruling
sustaining the bankruptcy court's rejection of Coors' claims based on the ground that
Coors had unclean hands.

                                           –3–
      Affirmed.2

      A true copy.

             Attest:

                     CLERK, U.S. COURT OF APPEALS, EIGHTH CIRCUIT.

      2
        This affirmance is subject to the ruling of the bankruptcy court's order stating
that "if Debtors desire to keep the Coors' releases, they will have to furnish the
reciprocal releases. . . . [Otherwise,] the releases furnished by Coors to Debtors shall
be returned to Coors and they shall be deemed void . . . ." J.A. at 1110.

                                          –4–