diff --git a/dlc-manager/src/sub_channel_manager.rs b/dlc-manager/src/sub_channel_manager.rs
index 6a0292a4..79173b19 100644
--- a/dlc-manager/src/sub_channel_manager.rs
+++ b/dlc-manager/src/sub_channel_manager.rs
@@ -340,7 +340,7 @@ where
                 .get_sub_channel(channel_details.channel_id)?
             {
                 Some(mut s) => match s.state {
-                    SubChannelState::OffChainClosed => {
+                    SubChannelState::OffChainClosed | SubChannelState::Rejected => {
                         s.is_offer = true;
                         s.update_idx -= 1;
 
@@ -1585,7 +1585,7 @@ where
                 .get_sub_channel(channel_details.channel_id)?
             {
                 Some(mut s) => match s.state {
-                    SubChannelState::OffChainClosed => {
+                    SubChannelState::OffChainClosed | SubChannelState::Rejected => {
                         s.is_offer = false;
                         s.update_idx -= 1;
                         Some(s)
diff --git a/dlc-manager/tests/ln_dlc_channel_execution_tests.rs b/dlc-manager/tests/ln_dlc_channel_execution_tests.rs
index d9ba0b4c..1cbf0614 100644
--- a/dlc-manager/tests/ln_dlc_channel_execution_tests.rs
+++ b/dlc-manager/tests/ln_dlc_channel_execution_tests.rs
@@ -951,6 +951,29 @@ fn ln_dlc_rejected_offer() {
     reject_offer(&test_params);
 }
 
+
+#[test]
+#[ignore]
+fn ln_dlc_rejected_offer_then_new_offer_and_accept_offer() {
+    let test_params = test_init();
+    make_ln_payment(&test_params.alice_node, &test_params.bob_node, 900000);
+
+    reject_offer(&test_params);
+
+    offer_sub_channel_internal(&test_params, false);
+
+    assert_sub_channel_state!(
+        test_params.alice_node.sub_channel_manager,
+        &test_params.channel_id,
+        Signed
+    );
+    assert_sub_channel_state!(
+        test_params.bob_node.sub_channel_manager,
+        &test_params.channel_id,
+        Signed
+    );
+}
+
 #[test]
 #[ignore]
 fn ln_dlc_rejected_close() {