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The Metamorphosis of Assignment Clauses in Bankruptcy

Last month, we discussed "The Debtor's Nightmare," explaining how the Fourth Circuit joined the Ninth, Third and Eleventh Circuits in adopting the "hypothetical test" in denying a debtor in possession's assumption of an executory contract under section 365 (c) of the Bankruptcy Code despite an express assignability provision in the contract. <i>RCI Tech. v. Sunterra Corp.</i> (<i>In re Sunterra Corp</i>), 361 F.3d 257 (4th Cir. 2004). This month, we continue with "the debtor's paradox."

10 minute read May 24, 2005 at 09:06 AM
By
Robbin L. Itkin And Katherine C. Piper
The Metamorphosis of Assignment Clauses in Bankruptcy

Last month, we discussed “The Debtor's Nightmare,” explaining how the Fourth Circuit joined the Ninth, Third and Eleventh Circuits in adopting the “hypothetical test” in denying a debtor in possession's assumption of an executory contract under section 365 (c) of the Bankruptcy Code despite an express assignability provision in the contract.

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