Court: United States Bankruptcy Court, S.D. Texas; June 18, 2013; Us Bankruptcy; United States Bankruptcy Court
Jeff Compton, the Litigation Trustee of the MPF Litigation Trust, initiated an adversary proceeding to recover alleged preferential payments made to Mustang Engineering Ltd. Mustang filed a renewed motion to dismiss the complaint, asserting two main defenses: first, that the debtor had assumed and assigned its contract with Mustang under section 365 of the Bankruptcy Code, thereby precluding any preference action; and second, that any such action was released by the debtors’ confirmed plan of reorganization. The Court determined that the Litigation Trustee lacks standing to pursue the preference avoidance action against Mustang and deemed dismissal appropriate under Federal Rule of Civil Procedure 12(b)(1). The Court's opinion elaborates on the need for adherence to section 365's requirements for executory contracts in bankruptcy and clarifies that once a contract is assumed, it bars future preference claims regarding payments made under that contract.
The findings of fact include:
1. Mustang entered into an Original Contract with Dragados Offshore, S.A. on May 8, 2007, to provide engineering services for a floating vessel.
2. A novation agreement was executed on June 13, 2008, substituting MPF for Dragados Offshore, S.A. as the contractor.
3. MPF and its affiliate filed for Chapter 11 bankruptcy on September 24, 2008.
4. The Contract was included in MPF’s Schedule G as an executory contract.
5. On October 2, 2008, the court ordered the joint administration of the bankruptcy cases, facilitating a unified disclosure statement and reorganization plan.
6. A further novation agreement was made on March 26, 2010, involving Mustang, MPF, and COSCO, allowing the transfer of the Contract to COSCO, contingent upon bankruptcy court approval.
The Novation Agreement specifies that the New Buyer will pay the Vendor GBP 873,279.83 as a full and final settlement of all claims between the parties. Upon the Effective Date, the Vendor releases the Original Buyer and related parties from obligations under the Vendor Contract, including the Cure Amount, and waives any future claims against them. Similarly, the New Buyer releases the Vendor and related parties from obligations under the Vendor Contract and waives any future claims against them, effective from the Payment Date.
On June 3, 2010, MPF and MPF-01 Ltd. entered into an Assignment and Purchase Agreement (APA) with COSCO, which included provisions for novation agreements. Before the Closing Date, MPF and COSCO are to execute novation agreements with each Vendor, ensuring COSCO assumes liabilities under Vendor Contracts, while MPF and its affiliates are released from such obligations. If no agreement is reached, the Sellers may seek Bankruptcy Court approval to assume and assign Vendor Contracts, contingent upon the payment of the Cure Amount.
On June 8, 2010, the Debtors filed their Amended Joint Plan of Reorganization (the Plan), which includes provisions for selling the Acquired Assets to the Purchaser under the APA and relevant Novation Agreements. The Plan also establishes a Litigation Trust, transferring all non-released Causes of Action to a Litigation Trustee for pursuit on behalf of the estate.
A Litigation Trust is established on the Effective Date to pursue Causes of Action for the benefit of holders of Allowed Class 4 Claims, with the Plan serving as the sole trust instrument. The Debtors and Liquidating MPF are designated as Grantors and owners of the assets transferred to the Trust. All Causes of Action, excluding those released under the Plan or prior court orders, are reserved for Liquidating MPF and will be assigned to the Litigation Trust. The Litigation Trustee is empowered to prosecute claims held by the Debtors and Estates against third parties, excluding claims that have been waived or settled. Causes of Action include preference avoidance actions.
Section 6.01 of the Plan outlines that all executory contracts and unexpired leases will be rejected on the Effective Date unless they are being assumed according to the Plan or the Assignment and Purchase Agreement. The Novation Agreement facilitates the assignment of rights under Vendor Contracts to the Purchaser, which includes specified Cure Costs. Cure Amounts are defined as the amounts necessary to cure defaults under executory contracts or unexpired leases as per Bankruptcy Code 365.
Section 12.05 details the releases by the Debtors and Estates, providing that they will release all Claims and Causes of Action against the Released Parties, except for Avoidance Actions, on the Effective Date. Article XI outlines that the Novation Agreements facilitate compromises and settlements among the involved parties.
Section 12.10 of the Plan, titled "Binding Effect," states that the Plan is binding on the Debtors, all current and former Holders of Claims and Interests against the Debtors, their successors, and all parties-in-interest in the Chapter 11 Cases. On June 9, 2010, during a hearing, financial advisor Richard Petrie provided details on the novation process involving COSCO, MPF, and vendors, highlighting the complexity and necessity of negotiations for the vendor novation contracts. Debtors’ counsel, Courtney S. Lauer, announced that agreements had been reached with two initially non-compliant vendors, ensuring all vendor contracts identified in the Assignment and Purchase Agreement were consensually novated. On June 14, 2010, the Court confirmed the Debtors’ Amended Joint Plan of Reorganization, establishing that all executory contracts and unexpired leases would be rejected unless assumed under the Plan or associated agreements. The effective date of the Plan was August 9, 2010. Subsequently, on September 23, 2010, the Litigation Trustee filed a Complaint alleging that Mustang received avoidable preferential transfers totaling at least $4,359,322.80. Mustang responded with a Motion to Dismiss on December 15, 2010. On January 14, 2011, the Court dismissed the adversary proceeding, determining that the Plan did not adequately preserve the Litigation Trustee's cause of action under Fifth Circuit law. The issue was later certified for direct appeal to the Fifth Circuit on March 8, 2011.
On November 14, 2012, the Fifth Circuit Court of Appeals determined that a bankruptcy Plan was sufficiently specific in excluding any Cause of Action related to the Plan or prior court orders from reserved claims. The court remanded the issue of whether individual defendants, including Mustang, were released under the Plan or prior orders for further consideration. On January 8, 2013, Mustang filed a Renewed Motion to Dismiss the plaintiffs’ complaint, which was opposed by the Litigation Trustee on January 29, 2013. A hearing on the motion took place on March 28, 2013, after which the court took the matter under advisement.
The court established jurisdiction over the adversary proceeding under 28 U.S.C. §§ 1334(b) and 157(a), categorizing it as a core proceeding due to its necessary interpretation of the Plan. Citing Fifth Circuit precedents, the court affirmed that bankruptcy courts retain post-confirmation jurisdiction over such matters. The proceeding also qualifies as core under additional provisions relating to preference recovery and turnover of estate property. Venue was deemed proper under 28 U.S.C. § 1409(a).
Regarding constitutional authority for issuing final orders, the court acknowledged limitations established in Stern v. Marshall. However, it concluded that the case at hand was distinguishable from Stern, as it involved interpreting the Plan's language and sought relief under provisions of the Bankruptcy Code (11 U.S.C. §§ 547 and 550) rather than solely state law claims, thereby affirming its authority to enter a final order.
The Court is empowered to issue a final order regarding the adversary proceeding. It must dismiss the complaint under Federal Rule of Civil Procedure 12(b)(1) due to a lack of subject matter jurisdiction to adjudicate the Litigation Trustee’s claims. A dismissal for lack of jurisdiction occurs when the court lacks the statutory or constitutional authority to hear the case. Mustang contends that the Court lacks jurisdiction because the Litigation Trustee does not have standing to assert the claim. Standing is essential for the Court's constitutional power to adjudicate.
A motion to dismiss under Rule 12(b)(1) can be either a facial attack, based solely on the complaint, or a factual attack, which considers evidence outside the pleadings. The current motion is a factual attack, referencing documents beyond the complaint, such as the Plan and Novation Agreement. In evaluating such a motion, the trial court can weigh evidence and determine its jurisdiction without assuming the truth of the plaintiff's allegations. The Court can dismiss for lack of jurisdiction based on the complaint alone, supplemented by undisputed facts, or by resolving disputed facts.
The burden of proof for establishing subject matter jurisdiction lies with the party asserting it, in this case, the Litigation Trustee. Mustang argues that the Litigation Trustee lacks standing to pursue the preference action because the underlying contract was assumed and assigned under Section 365 of the Bankruptcy Code. This principle indicates that once a debtor assumes an executory contract, they cannot later pursue an avoidance claim for preferential payments made under that contract.
Mustang contends that the contract assumption defense prevents the Litigation Trustee from pursuing the preference action. The Litigation Trustee counters that this defense does not apply because the Contract was not assumed and assigned under section 365 of the Bankruptcy Code, but rather involves a Novation Agreement, making section 363 more relevant. The Litigation Trustee maintains that even if the Court finds the Contract was assumed under section 365, the contract assumption defense should not be applied due to the negotiated nature of the assumption and assignment.
The Court will first determine whether the Contract was assumed and assigned according to section 365. The Plan and Confirmation Order explicitly indicate that the Contract was indeed assumed and assigned. Section 365 allows a trustee to assume executory contracts with court approval, and if there is a default, the trustee must cure it or provide assurance of cure to assume the contract. The Court identifies the Contract as an executory contract, as it is listed on MPF’s Schedule G and acknowledged by the Litigation Trustee. The Plan specifies that executory contracts were assumed and assigned under applicable novation agreements, and on the Effective Date, all executory contracts would be rejected unless assumed under the Plan or the Novation Agreement.
The Novation Agreement is described in the Plan as agreements that allow the Debtors to assign their rights under Vendor Contracts to the Purchaser, which includes the agreed Cure Cost. Since the Contract is recognized as an executory contract on Schedule 1 of the Plan, it was assumed and assigned through the Novation Agreement. The Confirmation Order also authorizes the assumption of executory contracts under section 365 in conjunction with the novation agreements.
The Confirmation Order is recognized as a court order under Bankruptcy Code Section 365, approving the Novation Agreements. The court determined that the assumption or rejection of executory contracts under the Plan reflects a reasonable exercise of the Debtors’ business judgment, benefiting the Debtors and their estates. The Novation Agreements, detailed in Exhibit B of the Plan and involving the Vendors listed in Schedule 1, were deemed reasonable for effectuating the assumption and assignment of Vendor Contracts. The inclusion of this language in the Confirmation Order implies that the Vendor Contracts were intended to be assumed and assigned under Section 365.
The Litigation Trustee's argument centers on specific language in the Asset Purchase Agreement (APA) and the Plan, suggesting that novation and Section 365's assumption and assignment are separate methods for transferring the Debtor's interest in the Contract to COSCO. The APA states that if the parties cannot agree on a Novation Agreement, the Sellers may seek court approval to assume and assign the Vendor Contract under Section 365, contingent on paying the required Cure Amount. However, this does not imply that Novation Agreements fail to achieve assumption and assignment under Section 365, nor that they are an alternative to such processes. Instead, the context indicates that Novation Agreements are the preferred method for achieving assumption and assignment.
Additionally, the Plan's language supports the view that assumption and assignment can occur with or without a Novation Agreement, reiterating that consensual assumption and assignment via a Novation Agreement remains valid. Statements made during the confirmation hearing align with this interpretation, reinforcing that assumption and assignment can occur through the Novation Agreements.
The Litigation Trustee argues that novation and the assumption and assignment under section 365 are distinct alternatives, supported by statements from Debtors’ counsel and CEO. Counsel indicated that while there were initial disagreements with two vendors, agreements were eventually reached, allowing for consensual novation. The CEO elaborated on the complexities of the novation process, highlighting the risks and responsibilities assumed by COSCO regarding vendor contracts. However, the Court notes that it is not required to consider these statements due to the unambiguous language of the Plan and Confirmation Order. The statements merely suggest that novation facilitated the consensual assumption and assignment under section 365, which governs such agreements. The distinction is reinforced by the references to payments as Cure Amounts, indicating these were to rectify defaults to enable assumption under section 365. The Court concludes that the Plan and Confirmation Order explicitly show the Contract was assumed and assigned under section 365, with the Novation Agreement serving as the method for this process. The clarity of the language negates the need for further discovery, as courts recognize section 365 as the exclusive framework for handling executory contracts in bankruptcy.
The discussion centers on the application of 11 U.S.C. § 363(b)(1) concerning executory contracts in bankruptcy, specifically addressing the constraints of 11 U.S.C. § 365. It highlights that there is no case law supporting the handling of executory contracts outside of § 365, which is deemed the exclusive method for their assumption and assignment in bankruptcy contexts.
The excerpt references two cases for clarification:
1. **Robinson Truck Line, Inc.** - The debtor aimed to assume an executory contract while proposing to handle arrears as a priority claim. The court recognized that § 365 allows for assumption if the debtor cures any default or assures prompt cure. However, it faced a conflict with § 1129(a)(9), which mandates full payment of priority claims unless agreed otherwise. The court concluded that the prompt cure under § 365 can override the immediate payment requirement of § 1129(a)(9), affirming that § 365 governs executory contracts in Chapter 11.
2. **Chira v. Saal** - The debtor, having entered a prepetition contract to sell a hotel, faced involuntary bankruptcy before the sale. The purchaser sought to compel the assumption or rejection of the contract. A settlement modified the original contract, leading to a motion for assumption by the trustee. The bankruptcy court approved this motion despite the appeal from the other owner, who argued that the modification rendered the contract unassumable under § 365.
Overall, the text emphasizes that § 365 is the definitive authority for managing executory contracts in bankruptcy, ensuring that debtors can assure creditors of a prompt cure rather than demanding immediate payment.
Section 363, which permits a trustee to sell both the estate's interest and that of any co-owner, was argued by the other owner but ultimately rejected by the court. The court held that the modification of the original agreement does not prevent the trustee from assuming it under section 365. It clarified that section 365 is the exclusive remedy for parties wishing to sell property or assets of the estate, as established in prior rulings, including In re Robinson Truck Line, Inc.
The court referenced the case of Chira, highlighting two key points. First, it affirmed that modifying a contract intended for assumption is allowed. The Litigation Trustee contended that the Novation Agreement was inconsistent with the assumption and assignment because it included modifications not mandated by section 365. Specific modifications cited included Mustang's release of the Debtors from obligations on the Plan's effective date, a waiver of claims against the Debtors, and granting assignment rights to the purchaser's lenders. However, the court emphasized that these modifications were voluntarily agreed upon by Mustang and did not render section 365 inapplicable.
Second, the court rejected the Litigation Trustee's assertion that section 363 should apply instead of section 365, mirroring the ruling in Chira. The court reiterated that, in the context of executory contracts, section 365 is the exclusive remedy for asset transfers, as supported by various precedents. Additionally, the Litigation Trustee's argument attempting to differentiate between assumption and novation was deemed misguided.
A transaction involving the transfer of rights and obligations under an executory contract, whether termed a novation or an assumption and assignment, necessitates the original party to first assume the contract under section 365 if that party is in bankruptcy. Case law, including *In re Mirant Corp.* and *Cinicola v. Scharffenberger*, establishes that assumption must precede any assignment of an executory contract. Consequently, for the Debtors to assign or novate the Contract to COSCO, they had to first assume it in compliance with section 365, which is the exclusive legal framework for addressing executory contracts in bankruptcy.
The Court rejects the Litigation Trustee’s argument that the Novation Agreement provides an alternative to section 365 procedures, emphasizing that any modifications made voluntarily by Mustang do not alter the requirement of assumption under section 365. The court then addresses whether the contract assumption defense precludes the Litigation Trustee from pursuing a preference action. This defense, derived from *In re Superior Toy Mfg. Co.*, posits that a trustee cannot initiate a preference suit for payments made under an assumed executory contract, as this would contradict the purpose of section 365, which aims to ensure that contracting parties are compensated before being compelled to continue performance with a bankrupt debtor.
Although the Fifth Circuit has yet to rule on this defense, some district courts within the circuit have recognized it, as seen in cases like *Noble v. ADP, Inc.* and *MMR Holding*, where courts held that once a debtor assumes a contract, it cannot pursue preference actions against the creditor for prepetition payments made under that contract. This reinforces the principle that a debtor cannot both assume an obligation under a contract and seek recovery for prepetition payments associated with that contract.
In *MMR Holding Corp. v. C. C Consultants*, the court denied the debtor’s request to recover prepetition payments as preferences, ruling that such payments are not recoverable if the contract related to them is assumed under section 365 of the Bankruptcy Code. The court reasoned that the estate cannot be both administratively obligated for all amounts due under an assumed contract and recover payments made under it. Consequently, the court found that the contract assumption defense applies, barring the Litigation Trustee from pursuing the preference action. The court concluded that the Novation Agreement facilitated the assumption and assignment under section 365, as evidenced by the numerous references to assumption, assignment, and cure payments within the Plan, Confirmation Order, Novation Agreement, and APA.
The court also addressed subject matter jurisdiction, stating that upon filing for bankruptcy, a bankruptcy estate is formed, including all legal and equitable interests of the debtor. The debtor in possession typically has the authority to pursue estate claims; however, once a Chapter 11 plan is confirmed, the debtor loses this status and the ability to pursue claims unless the plan explicitly reserves such rights. The court found that the reservation language in the Plan was sufficiently specific to reserve all unreleased causes of action. The remaining issue for remand is whether the Litigation Trustee’s claims against Mustang were released under the Plan.
Mustang contends that if claims against it were released, the Litigation Trustee lacks standing to pursue the current lawsuit, necessitating dismissal for lack of subject matter jurisdiction. The Plan includes provisions that release the Litigation Trustee's claims against Mustang. Section 4.03 of the Plan preserves certain claims for the Litigation Trustee but excludes those released under the Plan. It also allows the Trustee to pursue claims unless they have been waived, settled, or released in the Plan. Article XI of the Plan affirms that each Novation Agreement operates as a settlement among the involved parties, thus the Novation Agreement’s terms dictate whether claims against Mustang were released.
Specifically, sections 3.4, 3.5, and 4.1 of the Novation Agreement release all claims under the Contract. Section 4.1 states that, as a final settlement, the New Buyer (COSCO) will pay Mustang a specified amount as the 'Cure Amount.' Mustang argues this constitutes a complete release of all claims, including the current preference claim. Conversely, the Litigation Trustee claims that sections 3.4 and 3.5 prevent Mustang's interpretation of section 4.1 from being valid. Sections 3.4 and 3.5 involve reciprocal releases between Mustang and MPF, and between COSCO and Mustang. The Trustee argues that if section 4.1 is a full release, then sections 3.4 and 3.5 would be redundant. The Court, however, finds that Mustang's interpretation of section 4.1 is compatible with sections 3.4 and 3.5, asserting that while the latter two provisions concern bilateral releases, section 4.1 encompasses a comprehensive settlement among all three parties, thereby maintaining consistency among the contract's provisions.
Section 4.1 of the Novation Agreement clarifies that all parties (COSCO, MPF, and Mustang) are released from all claims related to the Contract upon payment of the Cure Amount. Sections 3.4, 3.5, and 4.1 work together to release these parties from present and future liabilities, and the broad language of the release is enforceable, including against preference actions.
The Litigation Trustee contends that these sections do not release preference actions, citing Victoria Bank, which requires that a claim be explicitly mentioned in the release to be effective. In that case, the court ruled that a claim unrelated to the transaction referenced in the settlement was not released. However, the Litigation Trustee's reliance on this case is deemed misplaced.
Instead, the case of Keck v. Nat’l Union Fire Ins. Co. serves as a more appropriate precedent. In Keck, the court found that a claim related to legal services was within the subject matter of a broad release, despite not being explicitly mentioned. Similarly, the preference action in the current case arises from payments made under the Contract, thus falling within the subject matter of the Novation Agreement, granting it a valid release.
The argument that section 4.1’s use of the term "settlement" instead of "release" undermines its effectiveness is also dismissed, reaffirming that the language used does not negate the release of claims.
The Litigation Trustee references the case Ayers v. Pastime Amusement Co. to argue that a document titled "settlement" should not be automatically interpreted as a release. The Trustee points out that while the term "release" appears in sections 3.4 and 3.5 of a contract, it is absent in section 4.1, suggesting that section 4.1 was not intended to function as a release. However, the court counters that Ayers emphasizes the importance of the document's content over its title, asserting that the parties' intent, discerned from the document, is paramount.
Additionally, the court notes that section 4.1 is broader than the other sections and that the drafters had the discretion to choose specific terminology to reflect the parties' intentions. It concludes that upon payment of the Cure Amount, all parties are released from claims related to the contract. The Plan explicitly prohibits the Litigation Trustee from pursuing any claims that have been waived, settled, or released, reinforcing that even if section 4.1 does not constitute a release, the parties agreed to settle all claims related to the contract.
Furthermore, the language in section 4.1 aligns with the reorganization code, which discusses the settlement or adjustment of claims. The court finds that the Litigation Trustee's distinction between settlement and release is unfounded, leading to a lack of subject matter jurisdiction over the current adversary proceeding, as the preference action was settled and released under the Plan and Novation Agreement. Consequently, the Trustee lacks standing to pursue this action, warranting dismissal under Federal Rule of Civil Procedure 12(b)(1). The court will not address the potential dismissal under Federal Rule of Civil Procedure 12(b)(6).
Dismissal for "failure to state a claim upon which relief can be granted" is recognized as a distinct basis for dismissal. The Court, having determined a lack of subject matter jurisdiction, will not consider dismissal under Federal Rule of Civil Procedure 12(b)(6). If jurisdiction is not established, other claims cannot be evaluated, nor can a Rule 12(b)(6) motion be addressed.
The Court concludes that the Contract was assumed under section 365 and assigned to COSCO through the Novation Agreement, which legally prevents the Litigation Trustee from pursuing a preference action against Mustang for payments made under the Contract. Consequently, dismissal under Rule 12(b)(1) is appropriate.
Even assuming the contract assumption defense does not apply, the preference action is barred as it was settled and released in accordance with the Plan and Novation Agreement, which explicitly includes claims that are “waived, settled, or released.” The Novation Agreement resolves “all past, present and future claims” related to the Contract, providing an additional justification for dismissal under Rule 12(b)(1).
Furthermore, the document clarifies that references to "the Code" pertain to the United States Bankruptcy Code, and any findings of fact or conclusions of law may be interpreted interchangeably as necessary. MPF is identified as the contractor under the Contract and is referred to as the Original Buyer in the Novation Agreement, which indicates MPF's role in assuming the Original Contract from Dragados Offshore, S.A.
The term "Cure Amount" is defined as the sum deemed owed to the Vendor under the Vendor Contract as of the Effective Date, encompassing all amounts necessary to address defaults by the original Buyer. Additionally, "Avoidance Actions" are described as any claims to avoid property transfers or obligations incurred by the Debtors under the Bankruptcy Code. An Order consistent with this Memorandum Opinion will be entered concurrently.
Mustang is referenced in multiple documents related to the Debtors' Statement of Financial Affairs and is specifically mentioned in Exhibit 3(b). While some payments made to Mustang are documented, a significant portion, totaling $2,627,002.80, is not included in the Litigation Trustee’s claim to recover at least $4,359,322.80 in allegedly preferential payments. Mustang's contract is detailed in Schedule 1 of the Plan and the associated Novation Agreement is attached as Exhibit B. Under Federal Rule of Bankruptcy Procedure 7012, the Court has jurisdiction to assess its own subject matter jurisdiction concerning the current dispute, consistent with precedent established in cases like Henry v. United States and Chicot County Drainage District v. Baxter State Bank.
The definition of an "executory contract," often cited from Countryman, asserts that both parties have unperformed obligations that, if not fulfilled, would result in a material breach. The Novation Agreement involving MPF, Mustang, and COSCO is included in the Plan, and Mustang is identified as a vendor in Schedule 1. The Chapter 7 trustee's report on potential preference actions indicated that parties receiving payments under assumed executory contracts would not be sued.
Texas law governs the Plan, although the Novation Agreement states it is subject to English law. Mustang's motion relies solely on the Novation Agreement's language without reference to English law, while the Litigation Trustee contends that the Court should assume English law aligns with Texas law due to Mustang's omission.
The Litigation Trustee argues that Texas law applies in this case, citing case law that states Texas courts will assume foreign law is the same as Texas law unless foreign law is properly invoked through pleading and proof. Relevant cases include Smith v. Suarez, In re Enron Corp, and Excess Underwriters at Lloyd's v. Frank's Casing Crew. The Trustee highlights Texas Rule of Evidence 203, which requires parties asserting foreign law to give notice in pleadings and provide supporting materials 30 days before trial. The Trustee contends that the court should not apply English law to interpret the releases in question. Mustang does not dispute the applicability of Texas law but claims the Trustee misreads its effectiveness.
During a hearing, the Trustee's counsel stated that the Novation Agreement is governed by English law, contradicting earlier arguments that English law should only apply if Texas law was not applicable. The Trustee failed to properly invoke English law and did not notify Mustang of his intention to do so. Consequently, the court decides to apply Texas law to determine whether the preference action was released under the Plan and Novation Agreement.
The court also addresses the role of the excess insurance carrier, which, despite not being a party to the settlement agreement, may assert claims on behalf of its insured. The agreement in question only covered legal services rendered during a specific time frame but did not preclude claims arising from services rendered afterward.
The Trustee argues that sections 3.4 and 3.5 of the Novation Agreement are limited to claims related to the contract, while section 4.1's release language should bar all claims among the parties. The court rejects this interpretation, noting that section 4.1 explicitly states it is meant to settle claims “under [the Contract,” and the Trustee has provided no evidence to support a broader interpretation. Thus, the court finds the Trustee's argument unpersuasive.
