Essay: Bankruptcy Code

Sample Essay

In short, NO; the two main requirements of the bankruptcy code trigger this outcome.

• “Section 541(c) of the Bankruptcy Code provides that an interest of the debtor (the bankrupt company or person) in property becomes “property of the estate,” meaning that the debtor does not lose the property or contract right, despite a provision in an agreement
• A second Bankruptcy Code provision, Section 365(e)(1), governs ipso facto clauses in executory contracts, which are agreements under which both sides still have important performance remaining” (Kannel and K.).

One cause is that below the older Bankruptcy Act of 1898, reinstated in 1979, these clauses based on facts were implementable. Over the passing time, legal bodies and small businesses are used to counting them in their agreement forms and they have sustained to inscribe them into many agreements. Since it’s for all time probable that the Bankruptcy Code might be altered to re-establish the previous code, lawyers frequently observe slight motive to exclude them.

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