In re Trak Auto Corporation

Trak Auto Corporation (plaintiff), a 196-store auto-parts retailer in Chapter 11, obtained court permission to close stores and sought to assign the lease for one closed location — restricted to retail sale of auto parts and accessories — at the West Town Center shopping center; after soliciting bids with no interest from any auto-parts retailer, the highest bid came from discount-clothing retailer A & E Stores, and the bankruptcy court approved the assignment over West Town's (defendant) objection, reasoning § 365(f)(1) authorized assignment despite the lease's use restriction and that West Town had not proven the assignment would disrupt its tenant mix. The district court affirmed, and West Town appealed.