Krafsur v. UOP (In re El Paso Refinery, L.P.)
U.S. Bankruptcy Court for the Western District of Texas
196 B.R. 58 (1996)
El Paso Refinery, L.P. (L.P.) operated a refinery under a licensing contract requiring it to pay UOP (defendant) $1.97 million in royalties for its refining technology. L.P. filed for bankruptcy, and the refinery was conveyed to Refinery Holding Company (RHC), which entered its own new licensing contract with UOP requiring RHC to pay $3.7 million in royalties for the same technology used at the same site. UOP filed a $4 million unpaid-royalty claim against L.P. in the bankruptcy, and bankruptcy trustee Krafsur (plaintiff) objected, arguing UOP's claim should be offset by the larger royalty payments UOP was now receiving from RHC. UOP argued it was a lost-volume seller entitled to both royalty streams.
Whether a lost-volume seller may recover the amount it would have received from the breaching buyer, even if the seller has resold those same goods to another party.