As part of a settlement of a contract assumption dispute, the debtor obtained an injunction prohibiting the counterparty (an electricity seller) from drawing down on posted letters of credit to collect payment of pre-petition invoices. The settlement order, including the injunction, was then incorporated into a confirmed plan.

After confirmation, the counterparty drew down on letters of credit to collect the plan debt, which was then in default, and which included the amounts owed on account of the pre-petition invoices referenced in the injunction. The Court holds that the counterparty did not violate the injunction. The injunction prohibited access to the letters of credit to collect "pre-petition invoices." Although the amount of those invoices were part of the plan debt owed to the counterparty, the invoice debt itself had been discharged and replaced by the (new) plan debt when the plan was confirmed. Thus, liquidation of the letters of credit was an act to collect plan debt, not the old "invoices."

The price achieved by an auction is ordinarily assumed to approximate market value when there is competition by an appropriate number of bidders. However, when competition is constrained, the price is less likely to be reliable and should be examined more carefully. The sale of a cause of action to a defendant in circumstances in which the plaintiff is the only competition is an example of constrained competition that warrants more scrutiny.

In the absence of any evidence indicating the good faith of a sale, bolierplate good faith findings are meaningless and erroneous. The absence of such findings eliminates an argument that the consummated sale is statutorily moot.