Aureal, Inc. v. I/O Magic Corp. (In Re Aureal, Inc.)

MEMORANDUM OF DECISION

LESLIE J. TCHAIKOVSKY, Bankruptcy Judge.

Plaintiff Aureal, Inc. (“Aureal”), the above-captioned chapter 11 debtor, moves for summary judgment in the above-captioned adversary proceeding. Defendant I/O Magic Corporation (“Magic”) seeks leave to amend its answer (the “Answer”) to add an affirmative defense of recoupment. For the reasons stated below, the Court grants Magic’s motion to amend the Answer and grants in part and denies in party AureaFs motion for summary judgment.

SUMMARY OF FACTS

Prior to the commencement of this chapter 11 case, Aureal sold digital audio imaging…