The Processing Rules Of Real Property Leases Of Executory Contracts In Bankruptcy Law

The process of executory contracts is important for the insolvency proceedings. At present, “Bankruptcy Law” of China provides the processing rules of executory contracts, but those rules are too simple, all types of executory contracts even adopt the same rules, which results in lots of disputes. Real property leases of executory contracts are prevail but special in insolvency proceedings. The defects of applying processing rules to them has aroused extensive attentions in the theoretic and practical fields. I think the process of executory contracts shall not only maximize the debtor’s estate, but also balance the interest of participants in insolvency proceedings. To achieve those objects mentioned above, real property leases of executory contracts shall apply special processing rules due to their specialty.The paper consists of four parts, the main idea of each part is summarized as follows:The first part is about the basic theory of real property leases of executory contracts. It mainly include three parts.First,it defines the scope of real property leases of executory contracts.The scope of real property leases of executory contracts is controversial. This paper argues that all the unexpired real property leases in insolvency proceedings are executory contracts. Second,it analyzes the particularity of real property leases in order to provide theoretical basis for the appliance of special rules. Real property leases is necessary to apply special processing rules because of its continuance, society and leasehold’s features of real right.Last,it introduces the principles processing the executory contracts shall follow,including maximizing the estate and balancing interest.By analysising these principles, we can conclude that the processing rules of executory contract stipulated in Bankruptcy Law is not suitable for real property leases,The second part mainly concentrates on the rules of executory contracts in China’s bankruptcy law. This article will analyze the defects in current legal provisions and judicial practices of the process of executory contracts and generalize views about those problems. At present, there is short of special processing rules of real property leases on China’s bankruptcy law, and disputes result from the process of real property leases of executory contracts have caused a lot of litigation. Discussions on the processing rule of real property leases are little but opinions have big differences. The focus of controversy is whether to provide special protection to the lessee.The third part focuses on the extra-territorial legislation of the processing rules of real property leases of executory contracts.The transfer rules of executory contracts in American Bankruptcy Law can effectivey solve the impossibility of fulfillment and the defect of remove.Besides of the common processing rules,many extra-territorial legislations provide special processing rules for real property leases,which distinguish the lessee bankruptcy and the lessor bankruptcy two circumstances. These extra-territorial legislations shall provide useful references to improve our legislation though they can not be applied mechanically.The fourth part attempts to provide suggestions for improvement of the processing rules of real property leases of executory contracts through referring to foreign legislation. This paper argues that China’s bankruptcy law should introduce transfer rules of executory contracts to solve the impossibility of fulfillment and the defect of remove, and adds special processing rules of real property leases of executory contracts. When the lessee goes bankrupt, the lessor shall not terminate the contract if the lease has been delivered. And when the lessor goes bankrupt, the lessee shall be given the right to refuse the decision of terminating the contract made by insolvency administrator.