Executory Contract Rejection in Bankruptcy: Leveraging the Rights of Contract Counterparties Under Tempnology
Recording of a 90-minute CLE video webinar with Q&A
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. We will give particular consideration to how recent U.S. Supreme Court authority on this question has affected leverage and negotiating positions. We will also consider how creative counsel structure and draft agreements to maximize leverage in the event of a future insolvency or bankruptcy by one of the parties to the contract.
Outline
- Overview of statutory framework for contract rejection under Section 365(g)
- Tempnology decision and rationale
- Tempnology as applied in different types of agreements
- Options
- Oil & gas
- Debtor as licensee or grantee
- Debtor's post-rejection obligations
- Strategies for counterparties
Benefits
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 using the Tempnology rationale?
- 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, or as in Tempnology, is the licensee and not the licensor?
Faculty
Jonathan W. Young
Partner, Chair Bankruptcy and Restructuring Practice Group
Locke Lord
Mr. Young’s practice encompasses out-of-court restructuring, distressed lending and M&A, governance of... | Read More
Mr. Young’s practice encompasses out-of-court restructuring, distressed lending and M&A, governance of financially stressed and distressed entities, and complex bankruptcy and insolvency proceedings in the U.S. and internationally. He advises investors, lenders, noteholders, directors, equity sponsors, and portfolio companies across multiple industries and jurisdictions. Mr. Young also represents trustees, receivers, and other fiduciaries in reorganizing, restructuring, or liquidating financially distressed entities. When consensus and restructuring are not achievable, his practice also extends to complex litigation, focusing on governance disputes, avoidance, and insolvency-related claims, and secured lending and related intercreditor issues. With substantial experience in restructuring and, when necessary, winding down private equity-sponsored portfolio companies, Mr. Young’s practice bridges restructuring and bankruptcy, debt finance, private equity, and governance.
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Chelsey R. List
Attorney
Locke Lord
Ms. Rosenbloom's practice focuses on corporate restructuring, insolvency, bankruptcy and related litigation... | Read More
Ms. Rosenbloom's practice focuses on corporate restructuring, insolvency, bankruptcy and related litigation matters. She represents a wide spectrum of clients, including secured and unsecured creditors, corporate debtors, indenture trustees and other interested parties in bankruptcy-related transactions and out-of-court workouts. Ms. Rosenbloom advises clients on creditors' rights, distressed acquisitions and dispositions, debtor-in-possession financing, loan-to-own strategies, and other matters.
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