Will the court allow noah to sell the surfboards


Problem:

Noah cannot stand cold weather. Growing up in Hawaii, he was used to sun and sand all year round. Now that he has a boring corporate job in New York City, he can't believe it is only warm three months a year. Noah decides that his best bet is to take FULL advantage of the short east coast summer, so he opens a surf shop. He knows that this will be a seasonal business, so he finds a small retail space on the New York shoreline which he rents from May - September.

Noah meets Emma and they immediately strike up a friendship. Emma is a fellow water-lover and she has a small workshop where she makes custom surfboards. Noah starts to sell Emma's surfboards in his shop. They get a great reputation and pretty soon the shop has a decent following. Typically, Emma will drop off boards as soon as they are finished, and she sends Noah an invoice about once a month for the boards. He promises her that if he ever fails to pay, she can just have the surfboards back. Noah is good about paying all his bills on time and things are going great.

Unfortunately, in early June, a terrible hurricane hits the eastern shore and floods Noah's shop. Because of excellent early warning, he managed to save most of the inventory, but the shop is ruined. The beaches have also been hit very hard, and the he is rapidly losing business. By mid-July, Noah can no longer pay his bills. He wants to avoid liquidating his business, because he is hopeful that next summer will be better, so he files for Chapter 11.

Noah survives a flurry of first day motions that allow his business to continue operating before a reorganization plan is in place. He decides he wants to move the entire inventory quickly, so he comes up with a new plan. He hires about 20 high school students and has them head to beaches up and down the east coast. He loads their vans up with surfboards and tells them to sell, sell, sell. He makes up huge signs advertising major sales. He hopes to just sell all he can and store up some cash for the long cold winter.

When Emma hears of this plan, she thinks it is a terrible idea. She knows that the surfers on new beaches will not know the quality of her product and will not pay properly. She knows that Noah's "team" will undersell her product and she is worried she will not get paid for all her hard work. She wants to prevent him from selling his boards this way and wants to just have the boards back instead.

Noah is advised that since this is an unusual way for him to sell his products, he should file a motion for permission from the court. As soon as Emma learns about the motion she immediately calls Noah and objects. Noah promises that he will continue to pay her monthly, and that she will not lose any money on her surfboards.

Will the court allow Noah to sell the surfboards in this fashion? Please list the factors the court will look at in determining if this is proper. Please also discuss any objections that Emma may raise.

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