Option To Executory Contracts By Bankruptcy Trustee

Executory contract system is an important part of the bankruptcy law system. Only if the problem of the executory contracts has been solved successfully, the interests of bankruptcy creditors can be protected effectively and the insolvent debtors can withdrawn from the market smoothly or get chance to revive. The solution on problem of executory contracts relies on bankruptcy trustee who exercises the right of option. Only if bankruptcy trustee exercises the right of option legally and reasonably, the maximum value of insolvency estate can be guaranteed, and the interests of subjects in bankruptcy proceeding can be balanced, and the efficiency of market subjects to withdraw from the market can be improved, and at last social stability can be realized. The article focusing on option to executory contracts by bankruptcy trustee uses many kinds of researches methods, such as literature research method, case analysis, comparative research on law and qualitative analysis method. In order to make contributions to improving our legislation in bankruptcy, the article mainly discusses the legal basis, manners of exercise and legal effect of the option to executory contracts by bankruptcy trustee.The article consists of three parts:the preface, main body and conclusion.In the beginning of preface, the author cites a case about executory contracts. Then the author introduces the current legislation and theory research in our country.The main body consists of five chapters:Chapter one is about the definition on executory contracts, basing on studies on judging criteria of executory contracts both in America and in China. Then the author makes researches on special properties of the executory contracts and points out that the executory contracts must conform to Contract Law and the value object of Bankruptcy Law.Chapter two mainly discusses the legal basis on which bankruptcy trustee exercises the right to option the executory contracts. There are two problems. The first one is why bankruptcy trustee exercises the right to option. The author analysis several theories about the legal status of bankruptcy trustee and gets the conclusion that bankruptcy trustee is the trustee of insolvency estate with advantages of neutrality, professionalism and independence. The second problem is why Bankruptcy Law authorizes the right to option to bankruptcy trustee while the interests of non-breaching party are sacrificed. The author analyzes the statutory lift system and views option to executory contracts as a special statutory release.In chapter three, the author suggests that the court review the option by bankruptcy trustee with Business Judgment Rule.The chapter four is about the conditions and legal consequences when bankruptcy trustee chooses to go on performing the contracts. In addition, the author also discusses the necessarily, conditions and legal consequences when bankruptcy trustee chooses to transfer the contracts.In chapter five, the author mainly discusses the subject, restriction, legal consequences and the amount of creditor’s rights when bankruptcy trustee chooses to terminate the executory contracts.In the conclusion, the author affirms the importance of option by bankruptcy trustee and points out the disadvantages of this article. At last, the author expresses the hope to make contribution to the research on executory contracts.