Research On The Solution Of The Executory Contracts In Bankruptcy Proceedings

Executory Contract refers to a contract which has been entered into before the acceptance of a bankruptcy petition but is not yet been fully executed by both parties after the acceptance of a bankruptcy petition.when an enterprise goes into bankrupt proceedings,especially in the reorganization procedure,the solution of the executory contracts will be directly concerned with whether the debtor can continue operating and will also affect the property value of the debtor.Bankruptcy procedure stablish it's own legal proceedings.To deal with the executory contract can reflect the particularity of bankruptcy procedure.The main body who made a decision in bankruptcy procedure is not the both parties to the contract but the bankruptcy administrator.The bankruptcy administrator enjoy the right of one-side selection without the agreement of the opposing party.This rule breaks through the relevant system of our Contract Law.There are several legal provisions in the Law of the People's Republic of China on Enterprise Bankruptcy concerning the executory contract,but there are some problems such as the simplification of the rules and the unclear operation.However,the present law are lack of the systematic or distinct discussion on how these bankruptcy administrator exercise their options in bankruptcy procedure.Furthermore,there is no difference between dealing with some special contracts and ordinary contract.In this paper,we discussed the problems of executory contracts in bankruptcy proceedings basing on comparative analysis.The main content include the following parts.The first part analyzes the relationship between the bankruptcy procedure and the executory contract.Think of the bankruptcy procedure fairness,justice and efficiency value pursuit,requirements of processing executory contracts to the professional neutral institution that bankruptcy administrator help creditor,and the legal right of cancellation given bankruptcy administrator: Terminate the contract does not increase the burden of the debtor but declare the creditor's rights,within the prescribed time limit does not make a decision as to improve lift efficiency.The principle of bankruptcy procedure requires that the bankruptcy administrator should have the right to choose to continue to fulfill the contract when the contract is to be performed,but the interests of the other party shall be fully protected and the court and the creditor shall be supervised.In the second part,discusses the option to the bankruptcy administrator.After the court accepted the bankruptcy petition,in addition to the bankruptcy reorganization procedures,the bankruptcy of the enterprise by the administrator to take over,also to executory contracts.The bankruptcy administrator has the right to continue to fulfill the contract and the right to terminate the contract,the contract shall be deemed to have been discharged within the time limit for the executory contracts.There are no standard for the the option to the bankruptcy administrator in the current law of our country.Although the bankruptcy law of the United States has three standards,such as business judgment,balance of interests and heavy burden,but there are some conflict between them,which is not conducive to the judge's judgment.In this paper,we should take the burden of bankrupt enterprises as the bottom line,and deal with some special types of contracts.The third part analyzes continue to fulfill contract.In the contract law,it is necessary to carry on.However,in the bankruptcy proceedings,the debtor has been insolvent,to continue to fulfill may be detrimental to creditors,it is necessary to deal with the performance of the contract to continue to set the conditions for the performance.If the bankruptcy administrator fails to report to the creditors Committee,notify the other party and provide security,it will result in the failure to continue to fulfill contract.Some special continue to fulfill the contract should be restricted,such as futures contract with uncertainty can not continue to perform;parties have the right of contract,should not break the right to terminate the compulsory requirements continue to perform.To continue to fulfill the contract for the performance of the contract for the common interest debt,but the legal effect of the part of the performance has not been specified,need to be clear.We should consider other creditors equitably as part of this contract can be divided,as ordinary creditor's rights declaration is more reasonable.The fourth part analyzes the terminate the contract.The administrator shall have the right to terminate the contract and do not require the consent of the other party.Although the right of rescission is legal but can not be made arbitrarily,it should be in accordance with the principle of maximizing the interests of the bankrupt property,the principle of balance of interests,the principle of efficiency,and the principle of the unification of non bankruptcy laws and regulations.To fulfill the contract has been fulfilled the legal effect after the termination of the part of our provisions are too simple,the scope of right of compensation for damage is not clearly defined,there is restitution,liability for breach of cognizance in practice.This paper argues that the executory contract provisions after the termination of the claim for damages should respect the law of contract contains interests,perform part elimination has been not retroactive without biological return,should not apply to the liability for breach of contract.According to exercise the right to terminate the principle should be restricted the right to terminate some special types of contracts,such as lease contract,license contract,intellectual property rights,ownership reservation contract for the sale of real estate sales contracts,contracts and other related to the public interest.Intellectual property licensing contract to the circulation in the market to make an inventory of assets of the contract,we think we can learn the American bankruptcy law practice management,let people enjoy the right of transfer,shorten liquidation time,improve efficiency.