SAP America filed with the U.S. Bankruptcy Court an objection to A.M. Castle & Co.’s Plan and proposed assumption or assignment of executory contract and, alternatively, post-rejection retention of contractual benefits.
The objection asserts, “Despite inquiries regarding treatment of its executory contract under the Plan, A.M. Castle and its affiliated debtors have not provided any notice to SAP as to whether its contract will be assumed, assigned, or rejected pursuant to the Plan….At this time, SAP has not consented to assumption or assignment of the Software License Agreement nor have the Debtors sought SAP’s consent. A.M. Castle exceeded the scope of its authorized software use rights under the Software License Agreement. SAP will not consent to the assumption or assignment of the Software License Agreement absent the parties’ resolution of that issue. Should the Debtors seek to reject the Software License Agreement, SAP does not object to rejection provided that the Debtors, upon rejection, immediately cease use of the licensed software and comply with all duties required upon termination of the agreement.”
In addition, “The equities demand that A.M. Castle should not be permitted to use the mechanism of rejection to circumvent the contractual requirements necessary to preserve SAP’s intellectual property interests while A.M. Castle continues to reap the benefits from Software post-rejection. Rather, A.M. Castle should be required to cease all use of the Software and comply with all other end-of-term duties as a condition to rejection of the License Agreement.”
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