About the Course
Introduction
This CLE course will consider the rights, obligations, and negotiating posture of a contract counterparty following the rejection of that contract under Bankruptcy Code Section 365. The panel will also offer practical guidance for structuring and drafting agreements to maximize leverage in the event of a future insolvency or bankruptcy by one of the parties to the contract.
Description
It is not always clear whether a contract is in fact executory for purposes of Section 365. Although the Countryman test predominates, it is not the only way to determine "executoriness." Settlement agreements and options can be particularly thorny. In re Svenhard's Swedish Bakery, 154 F.4th 1100 (9th Cir. 2025), expanded the definition of the statutory exclusion for "financial accommodations." Applying these tests may produce unexpected results.
It is now well-settled that the debtor's rejection of an executory contract under Bankruptcy Code Section 365 operates as a breach, not a termination, of the contract and that "all the rights that would ordinarily survive a contract breach ... remain in place." Mission Prod. Holdings Inc. v. Tempnology L.L.C., 139 S. Ct. 1652 (2019). The non-debtor contracting counterparty can decide whether to continue performing and maintain the vested property rights granted under that contract, or stop performing and give up or return to the debtor those vested property rights. How this plays out in IP-related contracts, options, oil and gas leases that convey real property rights, contracts involving restrictive covenants, and more is not always straightforward.
Listen as this experienced panel reviews how Section 365 operates when the non-debtor party has vested rights and strategies for maximizing them.
Presented By
Mr. Tractenberg is a litigator who centers his practice on domestic and international disputes and corporate revitalizations. His cases have been recognized by the Turnaround Management Association, the ABA Forum Committee on Franchising, the International Franchise Association and cited by industry publications. Mr. Tractenberg is experienced in tracing and recovering assets, when possible, domestically and overseas. He is Co-Chair of the firm’s Franchise & Distribution practice group, as well as Co-Chair of the International Arbitration practice group. Mr. Tractenberg is an active arbitrator, judge pro tempore and expert witness, with a long history of involvement with the International Franchise Association, the International Bar Association, various local bar associations and pro bono clients.
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
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Date + Time
- event
Wednesday, July 8, 2026
- schedule
1:00 PM ET/10:00 AM PT
I. Overview of statutory framework for contract rejection under Section 365(g)
II. How the principle of “rejection as breach" operates
A. Options
B. Oil and gas
C. Debtor as licensee or grantee
D. Debtor's post-rejection obligations
III. Strategies for counterparties
The panel will review these and other pivotal issues:
- What types of vested rights and options do counterparties have?
- How can counterparties improve their positions in bankruptcy?
- Could the breaching party (the debtor) use "rejection as a breach" to enable the debtor to retain benefits without assuming contracts?
- Does the analysis change if the debtor is the party that holds the vested right, such as being the licensee and not the licensor?
Related Courses
Executory Contract Rejection in Bankruptcy: Leveraging the Rights of Contract Counterparties
Wednesday, July 8, 2026
1:00 PM ET/10:00 AM PT
Mass Torts in Bankruptcy: Confirmation Strategies and the Role of Insurance
Available On-Demand
