Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

BankruptcyFeaturesEmployment LawLitigationThe Bankruptcy Strategist

Bankruptcy Court Authorizes Rejection of Employment Separation Agreements

By Francis J. Lawall and Michael J. Custer
February 01, 2018

The Bankruptcy Code can be an effective tool for reducing liabilities and enhancing asset value for the benefit of creditors. One of the more important tools is the right not only to assume favorable contracts pursuant to Section 365, but also to reject those that are not. Section 365 allows a debtor to pick and choose those agreements that it believes provide the best opportunity to reorganize or alternatively, sell its assets. However, any agreement subject to assumption or rejection must be executory, i.e., both parties must have material unperformed obligations on the date of the bankruptcy filing.

A recent decision from the U.S. Bankruptcy Court for the District of Delaware, which found two pre-petition employment separation agreements to be executory and subject to rejection, serves as a useful reminder to practitioners of this threshold requirement about the need to carefully identify and provide evidence of the ongoing obligations, or lack thereof, under any pre-petition contract. In re Rupari Holding, 2017 Bankr. LEXIS 4095 (Bankr. D. Del. Nov. 28, 2017).

This premium content is locked for The Bankruptcy Strategist subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
The DOJ's Corporate Enforcement Policy: One Year Later Image

The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.

The DOJ's New Parameters for Evaluating Corporate Compliance Programs Image

The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.

Use of Deferred Prosecution Agreements In White Collar Investigations Image

This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.

Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability Image

This article explores legal developments over the past year that may impact compliance officer personal liability.