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I have an Executory contract. A 10 year license of software.

We are the Licensor. The...
I have an Executory contract. A 10 year license of software. We are the Licensor. The licensee has paid for the license with shares of its company (private). There are milestone payments. I believe that there might be an ABC or some sort of workout brewing. Or maybe even Bankruptcy. What law, other than the contract, governs this? It is a California contract. Seems as tho under bankruptcy the creditor can assume or reject an executor contract and under ABC the parties must agree? If under bankruptcy it says the assumption is governed by the "business judgment test" and needs to be court approved?
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Answered in 1 hour by:
8/24/2017
DrakeLAW
DrakeLAW, Attorney
Category: Bankruptcy Law
Satisfied Customers: 1,038
Experience: Attorney at Drake Law Firm PLC
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Hi, my name is ***** ***** I look forward to helping you, please give me a moment to review and possibly research answers to your question.

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In chapter 11, the debtor exclusively gets to decide whether to assume or reject the executory contract.

In chapter 7, the trustee exclusively gets to make that decision.

Creditors do not have to agree to this decision. It does not need to be court-approved in either scenario.

Please kindly rate the question so I may be credited. Thank you. You can still ask follow-up questions.

DrakeLAW
DrakeLAW, Attorney
Category: Bankruptcy Law
Satisfied Customers: 1,038
Experience: Attorney at Drake Law Firm PLC
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Customer reply replied 11 months ago
Thanks but an voluntary workout or what is called an "ABC", I think, for Assignment for the Benefit for Creditors.can not force the executory contract to be assumed? In this instance the original shares (milestone payments over 10 years) and the subsequent payments of shares are an issue. The original shares would be seemingly worthless and who would make the subsequent payments? I understand if court overseen the creditors don't have to agree but is the "business judgement test" used and can the specific creditor appear in court?

I am trying to zero in on your question. An ABC is not bankruptcy, so the answers are very different for ABC versus bankruptcy.

The business judgment rule applies to the sale of estate property, not to whether an executory contract is assumed or rejected. If a bankruptcy is filed, a specific creditor can absolutely be involved in the entire process and appear in court.

Whether the executory contract is assignable or not in an ABC would depend on the language of the contract and state law. And with that, if it is not clear, it would be up to a judge or jurys determination.

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Customer reply replied 11 months ago
Thanks, ***** ***** try and clear up my question (should have a reply out in 15 minutes). On another thread I asked a question about the assignment. The contract states California law. I started another question because I am not sure how you are paid and did not want to ask to much in a single instance.

Ok, I see that one and will pick it up. And you are doing it exactly correct. Each separate question is charged separately. I will be away for a little bit shortly but I will respond do not worry.

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Customer reply replied 11 months ago
Thanks. Sounds good. I may be offline for a while too.
Customer reply replied 11 months ago
I added another question. I was not able to see how I could ask you the question directly. Thanks
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