Bankruptcy Code empowers debtors to assume, reject, or assign contracts/leases under § 365, even if contracts state otherwise. Mandelbaum Barrett PC Bankruptcy Partner Vincent J. Roldan, Esq. and Lewis Brisbois Bisgaard & Smith LLP Partner Minyao Wang, Esq. look at the recent Ninth Circuit BAP decision “In re Svenhard’s Swedish Bakery” where the court ruled a pre-petition settlement agreement wasn’t executory, limiting debtor’s ability to escape liability. This decision impacts creditors dealing with deferred settlement agreements in bankruptcy, and it strengthens creditor positions, impacting bankruptcy strategies.
Their American Bankruptcy Institute Journal article looks at executory contracts, § 365, and implications for future settlement agreements in bankruptcy.