Source: https://www.sagarialaw.com/section-365-executory-contracts-and-unexpired-leases.html
Timestamp: 2018-04-23 05:44:12
Document Index: 1783037

Matched Legal Cases: ['§ 365', '§ 765', '§ 701', '§ 901', '§ 365', '§ 503', '§ 365', '§ 1101', '§ 503', '§ 901', '§ 901', '§ 1112', '§ 1112', '§ 365', '§ 541', '§ 503', '§ 1101', '§ 507', '§ 507', '§ 362', '§ 701', '§ 362', '§ 524', '§ 1101', '§ 1301', '§ 362', '§ 1301']

Section 365 - Executory Contracts and Unexpired Leases :: San Jose Bankruptcy Attorney SagariaLaw
Chapter 3 of the Bankruptcy Code: Subchapter 4
Section 365 - Executory Contracts and Unexpired Leases
Executory Contracts and Unexpired Leases - Section 365
11 USCS § 365
(a) Except as provided in sections 765 and 766 of this title [11 USCS §§ 765 and 766] and in subsections (b), (c), and (d) of this section, the trustee, subject to the court's approval, may assume or reject any executory contract or unexpired lease of the debtor.
(2) Paragraph (1) of this subsection does not apply to a default that is a breach of a provision relating to--
(3) For the purposes of paragraph (1) of this subsection and paragraph (2)(B) of subsection (f), adequate assurance of future performance of a lease of real property in a shopping center includes adequate assurance--
(c) The trustee may not assume or assign any executory contract or unexpired lease of the debtor, whether or not such contract or lease prohibits or restricts assignment of rights or delegation of duties, if--
(1) (A) applicable law excuses a party, other than the debtor, to such contract or lease from accepting performance from or rendering performance to an entity other than the debtor or the debtor in possession, whether or not such contract or lease prohibits or restricts assignment of rights or delegation of duties; and
(d) (1) In a case under chapter 7 of this title [11 USCS §§ 701 et seq.], if the trustee does not assume or reject an executory contract or unexpired lease of residential real property or of personal property of the debtor within 60 days after the order for relief, or within such additional time as the court, for cause, within such 60-day period, fixes, then such contract or lease is deemed rejected.
(2) In a case under chapter 9, 11, 12, or 13 of this title [11 USCS §§ 901 et seq., 1101 et seq., 1201 et seq., or 1301 et seq.], the trustee may assume or reject an executory contract or unexpired lease of residential real property or of personal property of the debtor at any time before the confirmation of a plan but the court, on the request of any party to such contract or lease, may order the trustee to determine within a specified period of time whether to assume or reject such contract or lease.
(3) The trustee shall timely perform all the obligations of the debtor, except those specified in section 365(b)(2) [11 USCS § 365(b)(2)] [subsec. (b)(2) of this section], arising from and after the order for relief under any unexpired lease of nonresidential real property, until such lease is assumed or rejected, notwithstanding section 503(b)(1) of this title [11 USCS § 503(b)(1)]. The court may extend, for cause, the time for performance of any such obligation that arises within 60 days after the date of the order for relief, but the time for performance shall not be extended beyond such 60-day period. This subsection shall not be deemed to affect the trustee's obligations under the provisions of subsection (b) or (f) of this section. Acceptance of any such performance does not constitute waiver or relinquishment of the lessor's rights under such lease or under this title.
(4) (A) Subject to subparagraph (B), an unexpired lease of nonresidential real property under which the debtor is the lessee shall be deemed rejected, and the trustee shall immediately surrender that nonresidential real property to the lessor, if the trustee does not assume or reject the unexpired lease by the earlier of--
(5) The trustee shall timely perform all of the obligations of the debtor, except those specified in section 365(b)(2) [11 USCS § 365(b)(2)], first arising from or after 60 days after the order for relief in a case under chapter 11 of this title [11 USCS §§ 1101 et seq.] under an unexpired lease of personal property (other than personal property leased to an individual primarily for personal, family, or household purposes), until such lease is assumed or rejected notwithstanding section 503(b)(1) of this title [11 USCS § 503(b)(1)], unless the court, after notice and a hearing and based on the equities of the case, orders otherwise with respect to the obligations or timely performance thereof. This subsection shall not be deemed to affect the trustee's obligations under the provisions of subsection (b) or (f). Acceptance of any such performance does not constitute waiver or relinquishment of the lessor's rights under such lease or under this title.
(e) (1) Notwithstanding a provision in an executory contract or unexpired lease, or in applicable law, an executory contract or unexpired lease of the debtor may not be terminated or modified, and any right or obligation under such contract or lease may not be terminated or modified, at any time after the commencement of the case solely because of a provision in such contract or lease that is conditioned on--
(2) Paragraph (1) of this subsection does not apply to an executory contract or unexpired lease of the debtor, whether or not such contract or lease prohibits or restricts assignment of rights or delegation of duties, if--
(A) (i) applicable law excuses a party, other than the debtor, to such contract or lease from accepting performance from or rendering performance to the trustee or to an assignee of such contract or lease, whether or not such contract or lease prohibits or restricts assignment of rights or delegation of duties; and
(f) (1) Except as provided in subsections (b) and (c) of this section, notwithstanding a provision in an executory contract or unexpired lease of the debtor, or in applicable law, that prohibits, restricts, or conditions the assignment of such contract or lease, the trustee may assign such contract or lease under paragraph (2) of this subsection.
(2) The trustee may assign an executory contract or unexpired lease of the debtor only if--
(g) Except as provided in subsections (h)(2) and (i)(2) of this section, the rejection of an executory contract or unexpired lease of the debtor constitutes a breach of such contract or lease--
(1) if such contract or lease has not been assumed under this section or under a plan confirmed under chapter 9, 11, 12, or 13 of this title [11 USCS §§ 901 et seq., 1101 et seq., 1201 et seq., or 1301 et seq.], immediately before the date of the filing of the petition; or
(2) if such contract or lease has been assumed under this section or under a plan confirmed under chapter 9, 11, 12, or 13 of this title [11 USCS §§ 901 et seq., 1101 et seq., 1201 et seq., or 1301 et seq.]--
(A) if before such rejection the case has not been converted under section 1112, 1208, or 1307 of this title [11 USCS § 1112, 1208, or 1307], at the time of such rejection; or
(B) if before such rejection the case has been converted under section 1112, 1208, or 1307 of this title [11 USCS § 1112, 1208, or 1307]--
(h) (1) (A) If the trustee rejects an unexpired lease of real property under which the debtor is the lessor and--
(D) In this paragraph, "lessee" includes any successor, assign, or mortgagee permitted under the terms of such lease.
(2) (A) If the trustee rejects a timeshare interest under a timeshare plan under which the debtor is the timeshare interest seller and--
(i) (1) If the trustee rejects an executory contract of the debtor for the sale of real property or for the sale of a timeshare interest under a timeshare plan, under which the purchaser is in possession, such purchaser may treat such contract as terminated, or, in the alternative, may remain in possession of such real property or timeshare interest.
(2) If such purchaser remains in possession--
(l) If an unexpired lease under which the debtor is the lessee is assigned pursuant to this section, the lessor of the property may require a deposit or other security for the performance of the debtor's obligations under the lease substantially the same as would have been required by the landlord upon the initial leasing to a similar tenant.
(m) For purposes of this section 365 [11 USCS § 365] and sections 541(b)(2) and 362(b)(10) [11 USCS §§ 541(b)(2) and 362(b)(10)], leases of real property shall include any rental agreement to use real property.
(n) (1) If the trustee rejects an executory contract under which the debtor is a licensor of a right to intellectual property, the licensee under such contract may elect--
(B) to retain its rights (including a right to [to] enforce any exclusivity provision of such contract, but excluding any other right under applicable nonbankruptcy law to specific performance of such contract) under such contract and under any agreement supplementary to such contract, to such intellectual property (including any embodiment of such intellectual property to the extent protected by applicable nonbankruptcy law), as such rights existed immediately before the case commenced, for--
(2) If the licensee elects to retain its rights, as described in paragraph (1)(B) of this subsection, under such contract--
(C) the licensee shall be deemed to waive--
(ii) any claim allowable under section 503(b) of this title [11 USCS § 503(b)] arising from the performance of such contract.
(3) If the licensee elects to retain its rights, as described in paragraph (1)(B) of this subsection, then on the written request of the licensee the trustee shall--
(4) Unless and until the trustee rejects such contract, on the written request of the licensee the trustee shall--
(A) to the extent provided in such contract or any agreement supplementary to such contract--
(o) In a case under chapter 11 of this title [11 USCS §§ 1101 et seq.], the trustee shall be deemed to have assumed (consistent with the debtor's other obligations under section 507 [11 USCS § 507]), and shall immediately cure any deficit under, any commitment by the debtor to a Federal depository institutions regulatory agency (or predecessor to such agency) to maintain the capital of an insured depository institution, and any claim for a subsequent breach of the obligations thereunder shall be entitled to priority under section 507 [11 USCS § 507]. This subsection shall not extend any commitment that would otherwise be terminated by any act of such an agency.
(p) (1) If a lease of personal property is rejected or not timely assumed by the trustee under subsection (d), the leased property is no longer property of the estate and the stay under section 362(a) [11 USCS § 362(a)] is automatically terminated.
(2) (A) If the debtor in a case under chapter 7 [11 USCS §§ 701 et seq.] is an individual, the debtor may notify the creditor in writing that the debtor desires to assume the lease. Upon being so notified, the creditor may, at its option, notify the debtor that it is willing to have the lease assumed by the debtor and may condition such assumption on cure of any outstanding default on terms set by the contract.
(C) The stay under section 362 [11 USCS § 362] and the injunction under section 524(a)(2) [11 USCS § 524(a)(2)] shall not be violated by notification of the debtor and negotiation of cure under this subsection.
(3) In a case under chapter 11 [11 USCS §§ 1101 et seq.] in which the debtor is an individual and in a case under chapter 13 [11 USCS §§ 1301 et seq.], if the debtor is the lessee with respect to personal property and the lease is not assumed in the plan confirmed by the court, the lease is deemed rejected as of the conclusion of the hearing on confirmation. If the lease is rejected, the stay under section 362 [11 USCS § 362] and any stay under section 1301 [11 USCS § 1301] is automatically terminated with respect to the property subject to the lease.