| ID |
Name |
Group |
Other |
Code
Sec |
Cross
Ref |
Problem Referenced |
Proposed Solutions |
| NBRC-0223 |
Frank R. Kennedy |
Professor, Michigan Law School; former Executive
Director, Commission on the Bankruptcy Laws of the United States
(1973) |
Cover letter discussing various areas of
concern |
|
|
Author provides a list of 30 "Topics for
Consideration by Commission on Bankruptcy Laws." The recommended topic
relating to executory contracts was: Revision of treatment of executory
contracts and leases in light of NBC recommendations. |
None. |
| NBRC-0301 |
National Bankruptcy Conference |
National Bankruptcy Conference (NBC), Bernard Shapiro
- Chair |
|
|
|
National Bankruptcy Conference believes that the
following issue merits study by the NBRC: whether the law of executory
contracts should be "totally reconsidered." |
NBC concludes that executory contract law should be
"reconsidered." (No additional details are provided. The NBC Report,
however, which discusses this position more thoroughly, has been
"refined" and will be available to the NBRC.) |
| NBRC-0303 |
Commercial Law League of America |
Commercial Law League of America (CLLA) |
|
|
|
The Commerical Law League of America believes that
the following issue should be considered by the NBRC: Should § 365
be amended to clarify the effect of "rejection" Should the courts be
given specific authority to exercise more procedural control over
debtors' decisions to assume or reject contracts What duties should be
imposed on the non-debtor party to an executory contract pending
assumption or rejection |
The CLLA believes that these issues should receive
top priority (no additional details are provided). Discussion of these
issues should include clarification of § 365 as to the definiation
of an executory contract. |
| NBRC-0320 |
Robert M. Zinman, on behalf of the Bankruptcy
Institute |
American Bankruptcy Institute ("ABI") |
Numerous position papers, memoranda and research
material |
365 |
|
None. |
"Section 365 should be amended to clarify the effect
of rejection, which really means that the debtor has breached the
contract and the contract should be terminiated by the order approving
the rejection. The debtor should be allowed to reject the contract after
approval by the court. During the period pending the assumption of
rejection of the contract the non-debtor party can be assured of payment
for the goods or services provided during the case" (no additional
details provided). |
| NBRC-0357 |
David Epstein |
National Bankruptcy Conference |
|
365 |
|
In these preparatory materials for the December 18,
1996 plenary session on Chapter 11, the author outlines on behalf of the
National Bankruptcy Conference issues relating to the operation of 11
U.S.C. § 365. |
The author submits this issue outline for the NBRC's
consideration. |
| NBRC-0518 |
George A. Hahn |
Attorney |
|
|
|
Author discusses the need for the Code to be amended
to provide for temporary orders governing performance of prebankruptcy
contracts by the estate and the counter party during the period prior to
the estate's election to perform or breach the contract. |
Author "strongly endorse[s] the views expressed in
Professor Westbrook's memorandumof 2/27/97. "Temporary performance
orders would provide all counter parties with a dimensionof fairness and
certainty presently lacking by requiring a better balancing of the
interests of the parties." |
| NBRC-0545 |
Kurt F. Gwynne & Linda M. Zimmermann |
Attorneys |
|
365 |
362, 108 |
Authors submit a 47 page memorandum discussing
suggested areas of study for proposed amendments to § 365 of the
Bankruptcy Code regarding Executory Contracts and Unexpired
Leases. |
10 |
| NBRC-0633 |
Leslie J. Polt |
Attorney |
|
365(b)(2)(D) |
|
A question of interpretation exists with regard to
§ 365(b)(2)(D), which provides an exception to the need to cure
defaults in an executory contract before the debtor or trustee can
assume or assign an executory contract. The question is whether the
language of the provision exempts the debtor from having to perform only
"penalty provisions" or whether it relieves the debtor of the obligation
to cure all defaults that do not involve the payment of money. The
latter interpretation has been adopted by at least one court, and it is
this interpretation that the author objects to as being unfair, in that
it gives the debtor the right to resurrect a contract that was, for all
intents and purposes, cancelled prepetition due to the debtor's
nonmonetary, noncurable defaults. |
Author requests that the Commission give serious
consideration for a greater balancing of the equities between debtor and
non-debtor parties to executory contracts in the application of
§365(b)(2)(D). |
| NBRC-0668 |
International Council of Shopping Centers |
|
|
365 |
|
ICSC feels that the suggested deletion of
"executoriness" and the "material breach" tests would "completely
resontruct the fundamentals of bankruptcy contract law" and would not
help matters, but in fact cause further confusion. |
Do not delete the test of "executoriness" and
"material breach" from section 365. |
| NBRC-0668 |
International Council of Shopping Centers |
|
|
|
|
ICSC objects to the proposed substitution of the new
concept of "election to breach" in place of the concept of "rejection".
ICSC feels that such a change would not materially clarify the concept
expressed. Instead of reducing the amount and complexity involving a
debtor's decision to reject a prepetition contract, which at the present
plays out against a backdrop of fairly well-developed case law, the
suggested revieion will necessarily result in a glut of new litigation
as the courts struggle to delineate the consequences of a debtor's
election to breach. |
Do not substitute the concept of "election to breach"
for the current concept of "rejection". |
| NBRC-0668 |
International Council of Shopping Centers |
|
|
365 |
544, 547, 548 |
"Professor Westbrook rightly eschews a debtor's use
of the rejcetion power to avoid a pre-petition grant of "dominion over a
specific asset," where the avoidance of the transfer could not be
achieved under sections 544, 547 or 548 of the Bankruptcy Code, and
certainly most bankruptcy participants would agree that contract
rejection may not be employed in bankruptcy to avoid rights in property
created by the contract. ICSC believes, however, that the vast majority
of the opportunities to use rejection as an acoiding pposer have been
foreclosed by sections 365(h) and (n), and that any revision to clarify
that rejection is not an avoiding power should leave untouched such
"special interest" remedial provisions." |
"Rejection is clearly not an avoiding power and
section 365 might prudently be amended to so state but the "Special
Interest" provisions of that Section should not be deleted." |
| NBRC-0668 |
International Council of Shopping Centers |
|
|
|
|
"Although Professor Westbrook believes that temporary
performance and interim protectin orders will somehow make the
assumption/rejection process more"fair," it is clear that any such
orders will most surely involve the revision of contact [sic} terms to
the detriment of the non-debtor party. ICSC would object to any new
provision of the Bankruptcy Code which would undermine the protections
afforded non-debtor parties to executory contracts and unexpired leases
under sections 365(d) (3) and 365(d) (10) of the Bankruptcy
Code. |
|
| NBRC-0668 |
International Council of Shopping Centers |
|
|
|
|
ICSC has "no particularly strenuous objection" to
clarifying the option of "assumption" if the intent is to clarify that
an "election to perform" and subsequent assignment releases the debtor
of the continuing obligations under the assigned contract, or that the
"election to perform" is not contingent upon an additional finding that
the contract would be assignable under nonbankruptcy law. "ICSC does,
however, echo the concerns set forth in the "Competing Considerations"
section of the proposal that the concepts of "assumption" and
"assignment" have been less problematic than the concept of "rejection"
and that the change in terminology will almost inevitably result in
additional and unnecessary litigation." |
"ICSC submits that the concepts of "assumption" and
"assignment" are not so far broken as to compel a legislative fix at
this time." |
| NBRC-0712 |
Daniel H. Brunner |
Chapter 13 Trustee, Eastern District of
Washington |
|
365 |
1303, 1306, 1322(b)(7) |
There is a conflict between §365 which speaks of
the trustee assuming lease and executory contracts of the debtor, and
Chapter 13 provisions which give the debtor possession and the right to
use, sale and lease of the property of the estate, and which permit
executory contracts to be assumed, rejected or assigned in the debtor's
plan. This conflict leads to confusion. |
Add the provisions of §365 to §1303 and
grant the debtor the right, exclusive of the trustee, to assume or
reject leases. |
| NBRC-0838 |
Howard S. Harris |
Representative of American Automobile Manufacturers
Association from Ford |
Copy of In re Claremont Acquisition Corporation,
Inc., 1997 WL 236, 282 at p. 3 (9th Cir. Cal.) |
365 |
|
AAMA is not pleased with legislation proposed in the
House because they would allow the assumption of executory contracts
upon the cure of monetary defaults only. Contracts between automobile
manufacturers and their dealers include many other provisions, and
dealers may be in breach of non-monetary clauses which could render them
incapable of operating under law, or which could harm the reputation of
the manufacturer if they were allowed to continue doing business. AAMA
prefers the holding of the 9th Circuit Court of Appeals in In re
Claremont Acquisition Corporation that "in genreal, a debtor must cure
all defaults, both monetary and non-monetary, prior to the assumption
and assignment of an executory contract." |
The NBRC should: a) recommend at the earliest
possible date that Congress not take action on the changes to §
365(b)(2) that are currently pending before the House; and b) include in
its final recommendations to Congress a recommendation that in addition
to providing adequate assurances of future performance, a debtor must
cure all non-monetary defaults under an executory contract before that
contract can be assumed. |
| NBRC-1118 |
Jay L. Westbrook |
Benno C. Schmidt Chair of Business Law, The
University of Texas at Austin |
|
365 |
|
Author responds to request by Prof. Warren that he
look at the Commission proposal concerning compensation for interim
contract performance to consider if the proposal is properly stated. "At
the core of my analysis of the executory contract problem is the
conclusion that for most purposes state contract law should apply,
subject to the limitations on remedies imposed by the very nature of
insolvency. Compensation to a counterparty required to perform or to
prepare to perform on an interim basis should be calculated applying
ordinary contract principles." |
N/A |
| NBRC-1132 |
William J. Perlstein |
Attorney, Wilmer, Cutler & Pickering |
"The Progress of Executory Contracts in Bankruptcy:
Countryman to Andrew to Westbrook" |
|
|
Author is forwarding a short paper which he prepared
for a seminar he did in September, 1994, which discusses the evolution
of executory contract theories from Professor Countryman to Mike Andrew
to Professor Westbrook. |
N/A |
| NBRC-1174 |
Preston T. Towber |
Attorney, Hirsch & Westheimer |
|
365(d)(3) |
|
Author writes to Judge Jones to express his problem
with the proposed revisions to §365. Author is particularly
concerned with how it affects residential real property leases. "This
section has not been interpreted consistently by the bankrutpcy courts
and needs more teeth put into it." |
"I think the statute should be written as requiring
timely performance, specifically stating that the monthly rate is
presumed valid and requiring the Debtor to go to court to relieve it of
this requirement within ten days of the filing date." |
