United States Court of Appeals for the Fifth Circuit United States Court of Appeals Fifth Circuit

FILED ____________ October 27, 2023 No. 22-30757 Lyle W. Cayce ____________ Clerk

In the Matter of Thornhill Brothers Fitness, L.L.C.,

Debtor,

Anytime Fitness, L.L.C.,

Appellant,

versus

Thornhill Brothers Fitness, L.L.C.; William Flynn; Billie Flynn,

Appellees. ______________________________

Appeal from the United States District Court for the Western District of Louisiana USDC No. 3:22-CV-2074 ______________________________

Before Richman, Chief Judge, and Southwick and Oldham, Circuit Judges. Per Curiam: The question presented is whether 11 U.S.C. § 365(f), or any other portion of Title 11, authorizes a bankruptcy court’s approval of a debtor’s partial assignment of an executory contract. It does not. We reverse the Case: 22-30757 Document: 00516946579 Page: 2 Date Filed: 10/27/2023

No. 22-30757

bankruptcy court’s contrary order and remand for further proceedings consistent with this opinion. I. In November 2019, William Flynn attempted to use an “inversion table” located at an Anytime Fitness franchise location in Port Allen, Louisiana. The equipment allegedly failed, and Flynn suffered neuromuscular injuries. In February 2020, Flynn filed a personal injury suit in Louisiana court against the franchise owner, Thornhill Brothers Fitness, LLC (“Thornhill”). An amended complaint named an additional defendant, franchisor Anytime Fitness, LLC (“Anytime”). Anytime fought the complaint, arguing that the presence of the inversion table at the Thornhill location was unauthorized by the Thornhill- Anytime franchise agreement and that Anytime was, for other various other reasons, not liable for Flynn’s injuries. A Louisiana trial court dismissed Anytime with prejudice. An intermediate Louisiana appellate court affirmed. See Flynn v. Anytime Fitness, LLC, 360 So.3d 860 (La. App. 1st Cir. 2022). But Flynn’s case against Thornhill continued. A Louisiana district court announced that a multi-day jury trial would begin on March 21, 2022. Five days beforehand, at 3:15 PM on March 16, 2022, Thornhill filed a voluntary petition for bankruptcy. The petition disclosed only one significant non-insider liability—Flynn’s litigation claim—in an “unknown” amount above $1 million. Events thereafter moved quickly. By 2:00 PM on Friday, March 18, 2022, or less than 48 hours after the predicate bankruptcy, Thornhill’s counsel emailed the bankruptcy court announcing that “much negotiation” had produced a settlement. Counsel requested “a wet signature” from the bankruptcy judge to approve the settlement. That afternoon, the bankruptcy judge sent Thornhill’s counsel an SMS message with a photograph of the

2 Case: 22-30757 Document: 00516946579 Page: 3 Date Filed: 10/27/2023

No. 22-30757

signed draft order approving the settlement. See Fed.