This DLA Piper memorandum discusses In re Jennifer Convertibles, Inc. in the US Bankruptcy Court for the Southern District of New York. The court examined Sections 365(e) and 365(b)(2) of the Bankruptcy Code and held that a creditor's cross-default provision would violate federal bankruptcy policy if interpreted to require payment in full of all third party vendors to cure a default. Ultimately, the court held that the debtors could assume trademark license agreements with any payment default cured by the payments outlined in the reorganization plan.