Executory Contracts

Abstract

The viability of a business depends on the continuation of its essential contracts at least as much as on a successful business idea. Without an essential licence, without energy and goods supply, without a work force, or a lease, the debtors’ business simply cannot continue. Without the prospect of contract continuation (in whatever form), any option to restructure, but also any value maximizing going-concern sale in a liquidation, is off the table. The termination of contracts—by force of law or based on a contractual clause—due to the commencement of restructuring or insolvency proceedings must, therefore, be carefully considered.