Authority of Debtor in Possession Regarding Executory Contracts

The video tutorial discusses the process of accepting or rejecting contracts during bankruptcy. It explains the powers of a debtor in possession, who can choose which contracts to accept or reject. The court may impose limitations on these decisions, requiring adequate assurance for accepted contracts and possibly restricting the transfer of contract rights. In some cases, the court allows modification of contract terms to aid in the debtor's reorganization, helping them emerge successfully from bankruptcy.

What type of contracts can a debtor in possession choose to accept or reject?

• Expired contracts

• Verbal agreements

• Executory contracts

• Completed contracts

What power does the debtor in possession have regarding contracts?

• They can only reject all contracts

• They have no power over contracts

• They can choose to accept or reject specific contracts

• They can only accept all contracts

What might the court require for contracts that are accepted?

• Termination of the contract

• Transfer of contract rights

• Adequate assurance of performance

• Immediate payment in full

How can the court assist in the debtor's reorganization regarding contracts?

• By ignoring contract issues

• By enforcing all contract terms

• By modifying contract terms

• By terminating all contracts

What is the purpose of modifying contract terms during reorganization?

• To support the debtor's successful emergence from bankruptcy

• To hinder the reorganization process

• To eliminate all contracts

• To increase contractual obligations