By: B. Scott Douglass, Dean Gloster, attorneys and partners at Farella Braun + Martel, and Gary Kaplan, attorney and special counsel at Farella Braun + Martel.
Spring 2013
As part of a bankruptcy, a city can assume or reject “executory contracts” — contracts under which material performance obligations remain such that a breach by a party would entitle the other party to terminate. However, if an executory contract is rejected by a city, the developer has no ability to enforce its terms and conditions.