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The Rights and Treatment of Non-Debtor Contract Counterparties in Bankruptcy

This article discusses how counterparties, as well as courts, react to situations where a counterparty seeks protection from the risks inherent in continued performance under a Contract with a debtor in bankruptcy.

34 minute read January 30, 2013 at 03:50 PM
By
Adam L. Rosen and Christopher J. Rubino
The Rights and Treatment of Non-Debtor Contract Counterparties in Bankruptcy

Bankruptcy Code ' 365 primarily concerns whether a debtor-in-possession or trustee may assume or reject executory contracts and unexpired leases (collectively, the “Contracts”) for the benefit of the estate, but the section often places the counterparties to those Contracts in the precarious position of being required to perform while running the risk that a debtor or trustee might not do so.

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