- Instructor: Attorney Bob Schaller
- Lectures: 7
Schedule G: Executory Contracts and Unexpired Leases.
Every Chapter 7 debtor must file a schedule of executory contracts and unexpired leases. Bankruptcy Rule 1007(b)(1)(C). This chapter focuses on the listing of debtor’s executory contracts and unexpired leases.
What makes a contract an “executory” contract? An executory contract in the bankruptcy context has a special meaning. A contract is deemed executory when both parties to the contract have continuing obligations on the date the bankruptcy petition is filed. In other words, both parties are required to make further performance. For example, a roofer’s contract to replace roofing shingles on a debtor’s home is executory if the roofer has not completed the job and the debtor has not paid the contractual price. In contrast, a roofer’s contract to replace roofing shingles on a debtor’s home is NOT executory if the roofer has completed the job but the debtor has not yet paid the contractual price. In that case, the contract would not be an executory contract and would not be listed in Schedule G; but the unpaid debt owed to the roofer would be listed in Schedule E/F.
The concept of unexpired leases is much easier to comprehend. A lease is a contract where the lessor grants the lessee the right to temporarily possess or use lands, tenements, vehicles, personal property, intangible property, intellectual property, or other assets in return for compensation or other consideration. However, the debtor must recognize that some business agreements crafted as leases will be disregarded by the bankruptcy court and reclassified as a disguised financing agreement – especially when the lessee/debtor has the right to “buy” the property leased for $1 or some nominal sum at the conclusion of the lease term.
Like the other schedules, Bankruptcy Rule 9009 requires a debtor to use a specific national form prescribed by the Judicial Conference of the United States when listing the debtor’s executory contracts and unexpired leases. Bankruptcy Rule 9009(a). These rules are strictly enforced. The schedule’s form may not be changed as to affect wording or the order of presenting information. Id.
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