In two recent Chapter 7 bankruptcy cases, creditors for leased auto finance companies sought the court’s approval of lease assumption agreements. In each case, the Judge struck the motion as unnecessary. After a brief look at the bankruptcy code, I can see the logic behind the judge’s actions. The code distinguishes between reaffirmation agreements and leases. The former does require the court’s review and/or hearing for approval, the latter does not. Although the creditors may have been simply seeking a comfort order for their clients, the court did not feel the need to cooperate.

It will be interesting to see if the creditor attorneys try the other Judges in the district before abandoning the practice of seeking court approval of lease assumption agreements.

See Also: Bankruptcy New York