Minutes of the January 18, 2013 Meeting

ABI Commission to Study Chapter 11 Reform

Advisory Committee on Executory Contracts and Leases

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Participants:Kevin Huennekens, Chair

Lisa Hill Fenning, Reporter

Berry Spears, Reporter

Ingrid Bagby

David Kuney

Mark Stingley

Jay Westbrook

Absent: Larry Ahern

David Epstein

Susan Freeman

Charles Tabb

Consultant: David Pollack

Commissioners:Richard Levin

ABI:Michelle Harner

I.Minutes/records

A.January 11, 2013 minutes were approved without comment.

B.Those minutes will be posted on the website.

II.Discussion of Topic #1 -- Definition of Contracts Eligible for Assumption or Rejection

A.Revised draft report was distributed to Committee January 17, incorporating suggestions from last meeting, further comments from Committee members, and format requirements of the Commission

B.Draft report’s main recommendation: elimination of the concept of “executoriness”

C.The Committee engaged in a robust discussion of a variety of topics, including:

1.Is some concept like “executoriness” needed to distinguish “claims” from “contracts”?

2.The original reasons for inclusion of “executory” in the Code

3.Whether the problematic “executory” case law discussions are actually distracting from appropriate consideration of underlying state law or other applicable nonbankruptcy law regarding the subject matter of the contract at issue

4.Whether, with respect to the examples of oil and gas leases and IP licenses, considerations of “executoriness” seem to cause courts to fail to grapple with the more fundamental question of whether the conveyance of a property interest is complete and cannot be undone as a matter of nonbankruptcy law

5.Whether part of the “executoriness problem” is really a question of what contract obligations are excused or abrogated by the bankruptcy discharge

D.The Committee recommended adding additional material to the “competing considerations” section:

1.Comments from the Committee’s discussion emails regarding possible adverse consequences of changing the current law (D. Kuney to assist in this portion of the revision)

2.Additional examples of types of problematic contracts and the interrelationship with discharge issues (J. Westbrook to include additional material, examples from the Committee’s discussion)

3.A few sentences identifying other problematic types of real estate-related contracts (D. Pollack to assist in this portion of the revision)

G.Revised draft to be circulated to the Committee by Thursday, January 24, 2013

H.The “final” version of the preliminary report on Topic #1 will be discussed at a further meeting on January 25 at 2 p.m. EST/11 a.m. PST, at which time the Committee will consider whether to adopt the principal recommendation and approve the submission of the preliminary report to the Commission

III.The revised Topic #1 report will be submitted as the first preliminary report for Commission -- due January 25, 2013

IV.Schedule for other topics remains the same:

A.Topic #2 -- Standards Governing Assumption and Assignment

B.To be presented at meeting on February 15, 2013 (2 p.m. EST/11 a.m. PST) (telephonic)

C.Draft reports on all other topics to be submitted to Committee by March 1, 2013

D.Discussion schedule for other topics to be established later

VI.Reminder: hearing on 365 before the Commission -- June 4, 2013 NYC

A.Topics to be determined

B.Committee participants will include: Huennekens, Fenning, Spears, Stingley

Meeting schedule: January 25, 2013 (2 p.m. EST/11 a.m. PST) (telephonic)

February 15, 2013 (2 p.m. EST/11 a.m. PST) (telephonic)

[every two weeks thereafter, TBD]

April [19], 2013 -- in person at ABI Annual Meeting in DC

Minutes prepared by Lisa Fenning

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