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Executory Contracts in Bankruptcy (United States)

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Most businesses with an ongoing business relationship with a debtor in bankruptcy will face issues involving prepetition "executory contracts" with the debtor. Under the Bankruptcy Code, debtors and bankruptcy trustees are authorized to assume or reject executory contracts (and unexpired leases) in bankruptcy. This reflects the underlying bankruptcy policy that debtors should have the ability to abandon burdensome contracts and retain beneficial contracts. This QuickCounsel will provide a brief overview of executor contracts in bankruptcy and the issues they present.

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What is an Executory Contract?

Most courts define an executory contract as an agreement where "the obligations of both the bankruptcy and the other party are so far unperformed that the failure of either to complete performance would constitute a material breach excusing performance of the other." N.L.R.B. v. Bildisco & Bildisco, 456 US 513 (1984) ; Countryman , Executory License Agreements in Bankruptcy, 57 Minn. L. Rev. 439, 460 (1973) . Courts of Appeal in the Third, Fourth, Seventh, Eighth and Ninth Circuits use this "material breach" test. Some courts in the First, Sixth and Eleventh Circuits have used a more fluid "functional test." A long-term supply agreement, a franchise agreement, or most intellectual property licenses would usually be considered to be an executory contract. A promissory note, a completed sale or assignment, an expired agreement, an agreement effectively and completely terminated prior to the bankruptcy filing, or a single purchase order would typically not be an executory contract. Exclusive and perpetual licenses are sometimes argued to be more like a completed assignment for the rights and/or territory covered than an executory contract. However, any ongoing obligations on both sides, if material, will still be examined as part of the analysis of whether it is an executory contract or not.

How are Executory Contracts Treated Upon a Bankruptcy Filing?

Property interests of the entity or person filing bankruptcy becomes property of the bankruptcy estate upon a bankruptcy filing. An executory contract is property of the bankruptcy estate. Property of the bankruptcy estate is generally protected by the automatic stay . The automatic stay is a broad injunction which arises upon the filing of a bankruptcy petition that protects the property of the bankruptcy estate from the exercise of remedies by a creditor (e.g., proceeding to judgment or seizing assets) or a contract counterparty (e.g., termination or changing terms), absent obtaining relief from the automatic stay from the Bankruptcy Court. Section 365 of the Bankruptcy Code provides that clauses terminating an executory contract upon a bankruptcy filing or insolvency (so-called "ipso facto" clauses) are generally unenforceable.

Bankruptcy Cases Filed After Termination Notice Given but Before Cure or Termination Period has Expired

Executory contracts that are terminated prior to the filing of the bankruptcy petition do not become property of the estate. Moody v. Amoco Oil Co. , 734 F.2d 1200 (7th Cir. 1984) . But the termination "must be complete and not subject to reversal, either under the terms of the contract or under state law." Id. , at 1212. Thus, in situations where the nondebtor party to the contract has given its termination notice for the contract, and the debtor subsequently files for bankruptcy protection but before the cure or termination period has expired, courts may treat the underlying contract as an executory contract. In re Masterworks , Inc., 100 B.R. 149 (Bankr.D.Conn. 1989); In re C.W. Mining Co. , 422 B.R. 746 (10th Cir. BAP 2010) . Whether the default under the contract can be cured after the expiration of the cure period depends on the nature of the default, the phrasing of the notice of the default, and sometimes the court hearing the matter.

Limbo Period During Bankruptcy Case and Timing of Decision

The nondebtor counterparty to an executory contract is obligated to perform its obligations under the contract pending assumption, assignment, or rejection of that contract by the debtor (discussed below). In re Leslie Fay Companies, Inc. , 166 B.R. 802 (Bankr.S.D.N.Y. 1994) . If both parties owe each other money or credits, the nondebtor counterparty may have set-off, recoupment, and/or administrative freeze rights. A counterparty can file a motion to seek to compel an assumption or rejection of the contract but such relief is extremely difficult to obtain. 11 U.S.C. § 365(d)(2) ; In re Physicians Health Corp. , 262 B.R. 290 (Bankr.D.Del. 2001). Moreover, the counterparty's desire for certainty or for payment of unpaid prepetition amounts as a "cure cost" is generally not compelling to a bankruptcy court, which is typically more focused on the bankruptcy estate's attempt to reorganize or sell its assets.

In a Chapter 7 liquidation, executory contracts are generally rejected 60 days into the bankruptcy case absent special relief from the bankruptcy court. In a Chapter 11 case, there is no set time period to make the decision to reject or assume a general executory contract. Instead, absent an earlier rejection of an executory contract, which is burdensome and disfavorable to the bankruptcy estate, decisions on whether to assume or reject typically do not occur until a Chapter 11 plan is confirmed or until the division, assets or entity, which the contract relates to, is sold or liquidated generally.

A debtor may assume an executory contract by:

• Obtaining an order from the bankruptcy court permitting assumption of such contract after notice and an opportunity for the nondebtor counterparty to be heard in the bankruptcy court, or Confirming a plan of reorganization, which provides for assumption of such contract upon the effective date of the confirmed plan.

The debtor must assume the executory contract in its entirety. Upon assumption, the bankruptcy estate becomes bound by the contract, and all amounts thereafter owed by the debtor under the contract will constitute administrative expense claims, which are generally entitled to be paid in full. If an executory contract is in default at the time the debtor seeks to assume the contract, assumption will not be permitted unless all monetary defaults are promptly cured, and adequate assurance of future performance of the debtor's obligations under the contract is provided. Section 365(c) of the Bankruptcy Code prohibits the assumption of an executory contract by the debtor without the consent of the nondebtor counterparty for contracts with respect to which applicable law excuses the nondebtor party from accepting performance from, or rendering performance to, a third party, such as certain personal services contracts, certain non-assignable governmental contracts and certain intellectual property licenses.

Upon assumption, the debtor may assign an executory contract to a third party provided there is adequate assurance of future performance by the assignee of the executory contract. It is the bankruptcy court that ultimately determines whether the proposed assignee meets the standards, not the nondebtor counterparty. Contractual limitations on the assignment of an executory contract are generally not enforceable in bankruptcy, with some exceptions. One such exception arises in contracts that are not assignable to third parties under applicable law and the party does not consent to such assumption or assignment. Otherwise, debtors sometimes are able to assign under market or otherwise favorable executory contracts at a profit.

Rejection of an executory contract is essentially the debtor's declaration that it will not perform its remaining obligations under a contract under which performance remains due from each party. Upon rejection, the debtor no longer can be compelled to perform the debtor's unperformed remaining obligations under the contract, leaving the counterparty with the sole remedy of a breach of contract damage claim against the bankruptcy estate, which ordinarily will constitute a general unsecured claim as of the petition date, which often is paid only cents on the dollar. Rejection of the executory contract by the debtor does not reverse or undo any transactions completed before the point of rejection. In addition, an executory contract cannot be rejected in parts and assumed in parts. In situations where the executory contract is found to form a part of a series of related agreements (which may be difficult to prove), all the agreements will be deemed to constitute a single integrated transaction, requiring that all of such agreements either be assumed or rejected as a group. In re Atlantic Computer Systems, Inc. , 173 B.R. 844 (S.D.N.Y. 1994); In re Grede Foundries, Inc. , 440 B.R. 497 (Bankr.W.D.Wis. 2010). Bankruptcy courts review the debtor's decision to reject an executory contract under the business judgment standard and generally do not consider the fact that rejection is damaging to the nondebtor counterparty to the contract.

Rights Against Persons or Entities Who are not Part of Bankruptcy Filing

The automatic stay and other bankruptcy protections are generally specific to the entity in bankruptcy. If your agreement has a broad insolvency clause, which includes bankruptcy filings and/or insolvency by affiliates as an event of default or termination of the agreement, and the particular counterparty to the agreement does not immediately file for bankruptcy, it may be possible to terminate the license based on the parent's or affiliate's insolvency or bankruptcy filing.

Section 365 of the Bankruptcy Code sets out the bankruptcy trustee's duties and powers with regard to executory contracts. It is a lengthy section with many details, subtleties and gaps. The Bankruptcy Code attempts to empower the trustee to take advantage of the rights and assets of the estate while affording some protection to the countervailing interests of the counterparty. Given the complexity of the section and the numerous possible outcomes of executory contracts in bankruptcy, effective advocacy can make a large difference in achieving optimal results. This QuickCounsel provides in-house counsel with a brief overview of the issues and considerations involved in executor contracts in bankruptcy.

Additional Resources

• Executory Contracts in Bankruptcy: Navigating the Legal Ambiguities ( McKenna Long & Aldridge 2012) The Assumption Or Rejection of Executory Contracts in Bankruptcy - Are Commodity Contracts Within A Safe Harbor? ( Iowa State University Center for Agricultural Law and Taxation 2009) Executory Contracts -- What Are They And Why Do They Matter In Bankruptcy? ( Cooley LLP 2006) Executory Contracts And Unexpired Leases ( Bernstein-Burkley PC )

Published on October 1, 2012

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III. ASSUMPTION

A. Mechanics. Assumption of an executory contract is accomplished by motion of the debtor-in-possession or trustee, subject to objection by other creditors and court approval. A motion to assume an executory contract is a summary proceeding; it is not the place for prolonged discovery or a lengthy trial with disputed issues. In re Orion Pictures Corp., 4 F.3d 1095, 1098-99 (2d Cir. 1993), cert. denied, 114 S. Ct. 1418 (1994); In re F.W. Restaurant Assocs., Inc., 190 B.R. 143, 148 (Bankr. D. Conn. 1995) ("[C]ourt reads Orion to establish a preliminary 'likelihood of success' standard" in deciding issues related to debtor's motion to assume a contract. Thus, the court makes preliminary determinations concerning defaults and claims arising therefrom, but these determinations are not final, rather they are "collapsed into the 'business judgment' analysis."). The debtor has the burden of persuasion that the contract is (1) subject to assumption and (2) all the requirements of § 365 have been met. Generally, courts then require the nondebtor party to prove any defaults, which then shifts the burden back to the debtor to prove adequate "cure" of those defaults. In re Diamond Mfg. Co., Inc., 164 B.R. 189, 199 (Bankr. S.D. Ga. 1994). Although a debtor may provide for assumption of a contract in its plan of reorganization, § 1123(b)(2), at least one court has refused to allow that to satisfy § 365(a)'s requirements for motion and notice. In re Golden Triangle Film Labs, Inc., 176 B.R. 608, 610 (Bankr. M.D. Fla. 1994) (court was "unwilling to accept the proposition that the entry of an Order" confirming the plan satisfied § 365's requirements). Finally, some courts have held that filing of a motion to sell a contract under § 363 satisfies the requirements of § 365. In re Specialty Foods, Inc., 91 B.R. 364 (Bankr. W.D.Pa. 1988) ("[T]he Trustee filed a motion to sell which of necessity incorporates an assumption of the asset to be sold to the extent that the Trustee cannot sell an asset which he has rejected or abandoned."); In re Zacherl Coal Co., Inc., 15 B.R. 1001 (Bankr. W.D.Pa. 1981) (same). Denial of a motion to assume does not result in rejection of the contract. In re F.W. Restaurant Assocs., Inc., 190 B.R. 143, 149 n.8 (Bankr. D. Conn. 1995).

B. Standard of Review By Bankruptcy Court. A debtor's decision to assume an executory contract is subject to review under the "business judgment standard." See, e.g., In re Orion Pictures Corp., 4 F.3d 1095, 1099 (2d Cir. 1993); In re Gardiner, Inc., 831 F.2d 974, 975 n.2 (11th Cir. 1987); In re Health Science Products, Inc., 191 B.R. 895, 909 n.15 (Bankr. N.D. Ala. 1995) (Bankruptcy courts must approve a debtor's decision to assume or reject an executory contract "unless there is bad faith or a gross abuse of discretion." In other words, the court must decide "whether the decision of the debtor is so manifestly unreasonable that it could not be based on sound business judgment, but only on bad faith, whim, or caprice.").

C. Assumption Through Conduct. Whether a debtor-in-possession can assume a contract by conduct, without court approval, is subject to controversy. Compare In re University Medical Ctr., 973 F.2d 1065, 1075-79 (3d Cir. 1992); In re Whitcomb & Keller Mortg. Co., 715 F.2d 375, 380 (7th Cir. 1983); NCL Corp. v. Lone Star Bldg. Ctrs., 144 B.R. 170, 179 (S.D. Fla. 1992); In re Houbigant, 188 B.R. 347, 355 (Bankr. S.D.N.Y. 1995); In re Broaddus Hosp. Ass'n, 159 B.R. 763, 771 (Bankr. N.D.W.V. 1993); and In re Drexel Burnham Lambert Group, Inc., 138 B.R. 687, 712 (Bankr. S.D.N.Y. 1992) (all holding that assumption of an executory contract is not effective unless and until the court approves) with In re Frontier Properties, 979 F.2d 1358, 1365 (9th Cir. 1992) (court approval of stipulation that specifically provided for assumption of contract satisfies requirement for court approval under § 365(a)); In re Schleifer, 170 B.R. 283, 285 (Bankr. D.V.I. 1994) (where debtor remains employee during bankruptcy he assumes contract of employment and is bound by the statutorily defined conditions of that employment); In re Audra-John Corp., 140 B.R. 752, 755 n.7 (Bankr. D. Minn. 1992); In re Carlisle Homes, 103 B.R. 524 Bankr. D.N.J. 1988) (both holding that the debtor can assume a contract by communication of unequivocal intent to assume); In re Hodgdon, 54 B.R. 688 (Bankr. W.D. Wis. 1985) (contract may be assumed through conduct; conduct must be either express declaration of assumption or specific, unequivocal action leading to no possible conclusion other than assumption).

D. Timing of Assumption [§ 365(d)].

A. Mechanics.

C. Effect of Rejection. See § 365(g) and (h); see generally Michael T. Andrew, Executory Contracts in Bankruptcy: Understanding "Rejection", 59 U. Colo. L. Rev. 845 (1988).

Rule 6006. Assumption, Rejection or Assignment of an Executory Contract or Unexpired Lease

Primary tabs.

(a) Proceeding To Assume, Reject, or Assign. A proceeding to assume, reject, or assign an executory contract or unexpired lease, other than as part of a plan, is governed by Rule 9014.

(b) Proceeding To Require Trustee To Act. A proceeding by a party to an executory contract or unexpired lease in a chapter 9 municipality case, chapter 11 reorganization case, chapter 12 family farmer's debt adjustment case, or chapter 13 individual's debt adjustment case, to require the trustee, debtor in possession, or debtor to determine whether to assume or reject the contract or lease is governed by Rule 9014.

(c) Notice. Notice of a motion made pursuant to subdivision (a) or (b) of this rule shall be given to the other party to the contract or lease, to other parties in interest as the court may direct, and, except in a chapter 9 municipality case, to the United States trustee.

(d) Stay of Order Authorizing Assignment. An order authorizing the trustee to assign an executory contract or unexpired lease under §365(f) is stayed until the expiration of 14 days after the entry of the order, unless the court orders otherwise.

(e) Limitations. The trustee shall not seek authority to assume or assign multiple executory contracts or unexpired leases in one motion unless: (1) all executory contracts or unexpired leases to be assumed or assigned are between the same parties or are to be assigned to the same assignee; (2) the trustee seeks to assume, but not assign to more than one assignee, unexpired leases of real property; or (3) the court otherwise authorizes the motion to be filed. Subject to subdivision (f), the trustee may join requests for authority to reject multiple executory contracts or unexpired leases in one motion.

(f) Omnibus Motions. A motion to reject or, if permitted under subdivision (e), a motion to assume or assign multiple executory contracts or unexpired leases that are not between the same parties shall:

(1) state in a conspicuous place that parties receiving the omnibus motion should locate their names and their contracts or leases listed in the motion;

(2) list parties alphabetically and identify the corresponding contract or lease;

(3) specify the terms, including the curing of defaults, for each requested assumption or assignment;

(4) specify the terms, including the identity of each assignee and the adequate assurance of future performance by each assignee, for each requested assignment;

(5) be numbered consecutively with other omnibus motions to assume, assign, or reject executory contracts or unexpired leases; and

(6) be limited to no more than 100 executory contracts or unexpired leases.

(g) Finality of Determination. The finality of any order respecting an executory contract or unexpired lease included in an omnibus motion shall be determined as though such contract or lease had been the subject of a separate motion.

(As amended Mar. 30, 1987, eff. Aug. 1, 1987; Apr. 30, 1991, eff. Aug. 1, 1991; Apr. 22, 1993, eff. Aug. 1, 1993; Apr. 26, 1999, eff. Dec. 1, 1999; Apr. 30 2007, eff. Dec. 1, 2007; Mar. 26, 2009, eff. Dec. 1, 2009.)

Notes of Advisory Committee on Rules—1983

Section 365(a) of the Code requires court approval for the assumption or rejection of an executory contract by the trustee or debtor in possession. The trustee or debtor in possession may also assign an executory contract, §365(f)(1), but must first assume the contract, §365(f)(2). Rule 6006 provides a procedure for obtaining court approval. It does not apply to the automatic rejection of contracts which are not assumed in chapter 7 liquidation cases within 60 days after the order for relief, or to the assumption or rejection of contracts in a plan pursuant to §1123(b)(2) or §1322(b)(7).

Subdivision (a) by referring to Rule 9014 requires a motion to be brought for the assumption, rejection, or assignment of an executory contract. Normally, the motion will be brought by the trustee, debtor in possession or debtor in a chapter 9 or chapter 13 case. The authorization to assume a contract and to assign it may be sought in a single motion and determined by a single order.

Subdivision (b) makes applicable the same motion procedure when the other party to the contract seeks to require the chapter officer to take some action. Section 365(d)(2) recognizes that this procedure is available to these contractual parties. This provision of the Code and subdivision of the rule apply only in chapter 9, 11 and 13 cases. A motion is not necessary in chapter 7 cases because in those cases a contract is deemed rejected if the trustee does not timely assume it.

Subdivision (c) provides for the court to set a hearing on a motion made under subdivision (a) or (b). The other party to the contract should be given appropriate notice of the hearing and the court may order that other parties in interest, such as a creditors’ committee, also be given notice.

Notes of Advisory Committee on Rules—1987 Amendment

Subdivisions (a) and (b) are amended to conform to the 1984 amendment to §365 of the Code, which governs assumption or rejection of time share interests.

Section 1113, governing collective bargaining agreements, was added to the Code in 1984. It sets out requirements that must be met before a collective bargaining agreement may be rejected. The application to reject a collective bargaining agreement referred to in §1113 shall be made by motion. The motion to reject creates a contested matter under Rule 9014, and service is made pursuant to Rule 7004 on the representative of the employees. The time periods set forth in §1113(d) govern the scheduling of the hearing and disposition of a motion to reject the agreement.

Notes of Advisory Committee on Rules—1991 Amendment

References to time share interests are deleted as unnecessary. Time share interests are within the scope of this rule to the extent that they are governed by §365 of the Code.

Subdivision (b) is amended to include chapter 12 cases.

Subdivision (c) is amended to enable the United States trustee to appear and be heard on the issues relating to the assumption or rejection of executory contracts and unexpired leases. See §§307, 365, and 1113 of the Code.

Notes of Advisory Committee on Rules—1993 Amendment

This rule is amended to delete the requirement for an actual hearing when no request for a hearing is made. See Rule 9014.

Committee Notes on Rules—1999 Amendment

Subdivision (d) is added to provide sufficient time for a party to request a stay pending appeal of an order authorizing the assignment of an executory contract or unexpired lease under §365(f) of the Code before the assignment is consummated. The stay under subdivision (d) does not affect the time for filing a notice of appeal in accordance with Rule 8002.

The court may, in its discretion, order that Rule 6006(d) is not applicable so that the executory contract or unexpired lease may be assigned immediately in accordance with the order entered by the court. Alternatively, the court may order that the stay under Rule 6006(d) is for a fixed period less than 10 days.

GAP Report on Rule 6006 . No changes since publication.

Committee Notes on Rules—2007 Amendment

The rule is amended to authorize the use of omnibus motions to reject multiple executory contracts and unexpired leases. In some cases there may be numerous executory contracts and unexpired leases, and this rule permits the combining of up to one hundred of these contracts and leases in a single motion to initiate the contested matter.

The rule also is amended to authorize the use of a single motion to assume or assign executory contracts and unexpired leases (i) when such contracts and leases are with a single nondebtor party, (ii) when such contracts and leases are being assigned to the same assignee, (iii) when the trustee proposes to assume, but not assign to more than one assignee, real property leases, or (iv) the court authorizes the filing of a joint motion to assume or to assume and assign executory contracts and unexpired leases under other circumstances that are not specifically recognized in the rule.

An omnibus motion to assume, assign, or reject multiple executory contracts and unexpired leases must comply with the procedural requirements set forth in subdivision (f) of the rule, unless the court orders otherwise. These requirements are intended to ensure that the nondebtor parties to the contracts and leases receive effective notice of the motion. Among those requirements is the requirement in subdivision (f)(5) that these motions be consecutively numbered ( e.g., Debtor in Possession's First Omnibus Motion for Authority to Assume Executory Contracts and Unexpired Leases, Debtor in Possession's Second Omnibus Motion for Authority to Assume Executory Contracts and Unexpired Leases, etc.). There may be a need for several of these motions in a particular case. Numbering the motions consecutively is essential to keep track of these motions on the court's docket and should avoid confusion that might otherwise result from similar or identically-titled motions.

Subdivision (g) of the rule provides that the finality of any order respecting an executory contract or unexpired lease included in an omnibus motion shall be determined as though such contract or lease had been the subject of a separate motion. A party seeking to appeal any such order is neither required, nor permitted, to await the court's resolution of all other contracts or leases included in the omnibus motion to obtain appellate review of the order. The rule permits the listing of multiple contracts or leases for convenience, and that convenience should not impede timely review of the court's decision with respect to each contract or lease.

Changes After Publication . Subdivision (e) of the proposed rule was amended as suggested by the NBC to insert a third category of requests that the trustee may make under an omnibus motion. The list of categories was numbered, and the new category is set out in (e)(2).

Committee Notes on Rules—2009 Amendment

The rule is amended to implement changes in connection with the amendment to Rule 9006(a) and the manner by which time is computed under the rules. The deadline in the rule is amended to substitute a deadline that is a multiple of seven days. Throughout the rules, deadlines are amended in the following manner:

• 5-day periods become 7-day periods

• 10-day periods become 14-day periods

• 15-day periods become 14-day periods

• 20-day periods become 21-day periods

• 25-day periods become 28-day periods

What Is An Executory Contract: Everything You Need to Know

An executory contract holds people to duties they've been assigned to a specific date laid out in the contract. 3 min read updated on February 01, 2023

An executory contract holds people to duties they've been assigned to a specific date laid out in the contract. It goes into effect when someone files for bankruptcy and stipulates that the two people that signed still have an obligation to meet. If the obligations are not met, it's a breach of contract. These types of contract are usually between a borrower, debtor, and another party. 

Types of Executory Contracts

• Most licenses dealing with intellectual property, supply agreements that are long-term, and franchise agreements are executory contracts.
• A completed assignment or sale, an agreement that's completely terminated, an expired agreement, or anything of the like that's done prior to bankruptcy is usually not considered to be an executory contract. 
• Licenses that are perpetual and exclusive are sometimes an executory contract, but you can make a case that they're a completed assignment for territory or rights. You have to examine other materials to determine whether the ongoing agreement fits the bill.  
• Real estate leases are executory contracts, as tenants have to pay rent and, in exchange, the landlord provides them with a place to live.
• Equipment leases are executory contracts. Someone provides equipment and someone pays rent for that equipment. 
• Development contracts where development work is requested and payment is given upon the completion of milestones are also executory contracts.
• Leases on vehicles and furniture that is rent-to-own are both kinds of executory contracts.
• Timeshare contracts and utility contracts, including internet and telephone service, are both executory contracts.
• Employment contracts and service and supply contracts are also executory contracts.

How Executory Contracts Work 

When you enter into an agreement like a lease, you're paying for the right to use an item or property for an agreed-upon amount of time. It's a cheaper alternative to buying the property. While the lease is in effect, it's considered an executory contract.

The debtor, otherwise known as a bankruptcy trustee , in the agreement is the person who decides whether they “assume” (agree) or “reject” (refuse) to fulfill the obligations set out in an executory contract. The non-debtor party of the contract has to continue on as though bankruptcy has not been filed. If the debtor assumes the contract, then they have to pay their payments and other defaults in full and show that they can pay in the future.

If they choose, the debtor can assume the contract but assign it to someone else. That someone else is typically a buyer of the debtor's assets. If the debtor chooses to do this, they have to pay any defaults. The buyer then has to prove that they can perform the obligations of the contract in the future. 

With the exception of leases for commercial real estate , you have 60 days from the filing of bankruptcy to reject or assume an executory contract. The only way to change the deadline is to go to the bankruptcy court. The rules of bankruptcy that govern executory contracts are pretty complex. If you're unsure whether your agreement is an executory contract, consult a bankruptcy attorney when the debtor files bankruptcy. 

Issues You Can Face with an Executory Contract

Businesses that have an ongoing agreement with a debtor could deal with issues pertaining to prepetition executory contracts with the debtor. The Bankruptcy Code authorizes debtors to assume or reject contracts for bankruptcy, meaning they have the ability to retain contracts that are beneficial and abandon contracts that are burdensome.  

The majority of courts will define an executory contract as an agreement where both parties need to complete unperformed obligations. If either party fails to meet these obligations, then it would constitute a material breach, which excuses the performance of the other. 

Before anyone signs an executory contract, they need to read and thoroughly understand all terms and obligations contained in the contract. The terms and other legal jargon in such a contract can be confusing. You should talk to an experienced attorney in cases where you're having trouble understanding the intent of the contract. You don't want to enter into a contract that you don't understand or are unwilling to fulfill.

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Ignorance Is Not Bliss: Demystifying Executory Contracts in Bankruptcy Cases

An executory contract can create havoc for the unsuspecting counterparty.

Most businesses are (reluctantly) required to deal with customers, suppliers and counterparties to agreements that enter bankruptcy proceedings, yet there is a great lack of knowledge as to how the concept of an executory contract can create havoc for the unsuspecting creditor/counterparty. Recent litigation in Delaware involving the sporting goods retailer Eastern Outfitters LLC (Eastern Mountain Sports and Bob’s Stores) points to some of the issues.

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There is no statutory definition for an executory contract. Most courts use the definition created by the late Professor Vern Countryman of Harvard Law School, which defines an executory contract as an agreement, including leases, where performance is remaining on all parties to the agreement—and can be enforced by a court. Besides leases, employment agreements, franchise agreements, sales and purchase agreements, supply agreements and the like are considered executory contracts.

What is so significant about executory contracts in a bankruptcy proceeding is that the Bankruptcy Code authorizes a bankruptcy trustee, and in the case of a Chapter 11 proceeding the debtor-in-possession, to reject any executory contract or lease where it is in the best business judgment of the trustee or debtor-in-possession to do so. Provisions in executory contracts and leases that prohibit or restrict such rejections are unenforceable. Some of the traps and pitfalls for counterparties to executory contracts and leases, where one party is in a bankruptcy proceeding, include:

• Businesses in financial difficulty will sometimes try to gain a strategic advantage by entering into an executory contract or lease with an unsuspecting counterparty. Then, after there has been some significant performance or action taken by the unsuspecting non-debtor counterparty, a Chapter 11 proceeding is filed, and the debtor-in-possession is able to extract significant modifications to benefit the debtor-in-possession as an alternative to rejection.
• If an executory contract or lease is rejected in a bankruptcy proceeding, the non-debtor counterparty is left with only the right to file an unsecured claim for damages that arise as a result of the rejection. Additionally, with respect to leases of real property, the extent of the future rent damages that can be claimed is severely limited by the Bankruptcy Code.
• Generally, except for leases of real estate in shopping centers, until the bankruptcy court enters an order setting a deadline, a Chapter 11 debtor in possession has a protracted period of time in which to decide whether or not to assume or reject an executory contract or lease. This places the counterparty at a significant disadvantage. However, steps can be taken by the counterparty to obtain an order from the bankruptcy court compelling the debtor-in-possession to make a decision as to whether or not the executory contract or lease will be assumed or rejected.
• If a debtor-in-possession or trustee decides to assume an executory contract or lease, all pre-bankruptcy defaults must be cured at the time of the assumption or shortly thereafter, and the debtor-in-possession or trustee must provide adequate assurance of future performance of the executory contract or lease.
• If a debtor-in-possession or trustee decides to assume an executory contract or lease, that executory contract or lease can be assigned or sold to a third party. Except in special circumstances and those dealing with personal service contracts, a prohibition against assignment or transfer in an executory contract or lease is unenforceable in a bankruptcy situation. Counterparties to executory contracts and lessors need to be extremely vigilant when a debtor-in-possession or trustee seeks to assume an executory contract or lease if it is tied with a transfer, sale or assignment to a third party.
• With respect to a lease of real property where the tenant goes into a bankruptcy proceeding, the Bankruptcy Code has strict requirements for the payment of rent once the bankruptcy proceeding has been filed. Pre-bankruptcy rent does not have to be paid until there is an assumption of the lease, assuming there is one.
• The assumption of an executory contract or real estate lease acts to cure all non-monetary defaults, so that the lessor or counterparty can take no action to terminate the executory contract or lease once the financial defaults have been cured.
• If an executory contract or lease is rejected, the bankruptcy court will enter an order setting a usually short deadline by which the counterparty or lessor must file a rejection damage proof of claim. Failure to file such a claim by the deadline extinguishes the right to do so.
• With respect to leases of personal property such as computers, copiers, and telephone systems, rejection and return of the equipment can render their salvage or resale value to be negligible. This forces the lessor to agree to a modification of lease terms in order to forestall a rejection.

The above is a simplification of many of the rules, problems and pitfalls involved with executory contracts and leases when one of the parties enters a bankruptcy proceeding. However, it is crucial that businesses affected seek immediate legal advice and take steps to protect their interests, as delay can be disastrous.

Charles M. Tatelbaum is a Director of Tripp Scott, PA and chair of the bankruptcy and creditors’ rights department.

• SEE ALSO : What Melinda French Gates’s Philanthropy Could Look Like Post-Gates Foundation

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Executory Contracts: Assumption and Assignment

Key Background Facts:

From Executory Contracts and Unexpired Leases :

• An executory contract is one in which neither party to the contract has fulfilled its obligations.
• Either the trustee or the debtor in possession ( DIP ) can either assume or reject an executory contract.
• An executory contract not assumed is deemed rejected.
• A contract cannot be enforced against the bankruptcy estate until it is assumed.
• Assumption requires court approval.
• An executory contract will be assumed if it has a net benefit for the bankruptcy estate; otherwise, it will be rejected.
• ipso facto clauses , which stipulates the termination of the contract because of the party's financial condition or its filing of bankruptcy,
• the payment of penalties for failure to comply with a non-monetary provision under the contract,
• and default clauses due to failure to perform by a deadline, since the trustee needs enough time to evaluate the contract.
• If the contract is in default, then the default must be cured and adequate assurance of future performance must be provided to the non-debtor party.
• contracts that are not assignable under nonbankruptcy law,
• contracts for loans or other extensions of credit,
• and commercial leases that were terminated under nonbankruptcy law before the order for relief.
• A trustee may decide to assign an assumed contract to a 3 rd party for money.
• Because a contract must be assumed before it can be assigned, anything that bars assumption will also bar assignment.
• The assigned party acquires both the rights of the debtor under the contract and the delegation of its duties.
• Hence, the trustee must provide adequate assurance that the assigned party is reasonably likely to be able to perform under the contract.

The bankruptcy estate does not automatically assume the contracts of the debtor; therefore the contracts are not enforceable against the bankruptcy estate until they are assumed. The trustee or the debtor in possession ( DIP ) under Chapter 11 either assumes the contract, or rejects it. Under Chapter 7 , the trustee has 60 days after the order for relief (which, for voluntary petitions, is the bankruptcy filing date) to assume an executory contract. Under Chapter 13 , 12 , and 11 , contracts have to be assumed by the confirmation of the debtor's payment plan. In any case, the court can grant more time, if necessary. However, if the trustee does not assume a contract in the required time, then the contract is deemed rejected.

A contract will only be assumed if it has a net benefit to the bankruptcy estate and only with court approval. If the contract is assumed, then the bankruptcy estate takes the place of the debtor as a party to the contract. Consequentially, the bankruptcy estate must perform the obligations of the contract, but also receives its benefits.

However, the contract must be assumed cum onere , as they say — with all the burdens. The contract must be accepted in its totality except for ipso facto clauses (aka bankruptcy termination clauses ), which are clauses that are conditional on the party's financial status or bankruptcy. Most of these ipso facto clauses stipulate that the contract will be terminated if the party becomes either insolvent or files for bankruptcy. Ipso facto clauses are not enforced under bankruptcy, so the trustee still has the option of assuming a contract with an ipso facto clause.

Because the non-debtor party of an assumed contract has priority over other unsecured creditors of the estate, the decision to assume is generally postponed as long as possible, especially since the non-debtor party is required to perform until the decision to assume or reject is made. Postponing the decision allows the trustee to better assess whether assuming the contract will have a net benefit to the bankruptcy estate. However, the non-debtor party can petition the court to force an earlier decision.

Hence, another element of contracts that is modified are clauses requiring specific performance by a deadline. Bankruptcy extends some deadlines so that the trustee is given more time to evaluate the contracts. The non-debtor party cannot terminate the contract as a result of the delay.

Contracts in Default

A requirement for the assumption of defaulted contracts in is that the bankruptcy estate must cure any defaults of the contract, usually by making up for any missed payments by the debtor.

The estate must also compensate the non-debtor party for any damages resulting from the debtor's default. Any payments for damages or for performance under the contract have administrative priority . There is no limit on the amount of the claim except for real estate commercial leases for which a claim is limited to 2 years rent. Moreover, any payments received by the non-debtor party prior to the bankruptcy will not be treated as preferences .

To assume a contract in default, §365(b)(1) of the Bankruptcy Code requires that the trustee cure the default, remunerate the non-debtor party for any losses suffered because of the default, and provide adequate assurance of future performance under the contract.

However, §365(b)(2) stipulates that there are 2 types of default that do not have to be cured:

• ipso facto clauses discussed above.
• the failure to pay penalties that arose because the debtor failed to perform nonmonetary obligations under the contract, such as maintaining certain store hours.

Except for shopping centers, there is little guidance in the Bankruptcy Code about what constitutes adequate assurance of future performance . Generally, the courts will decide if the trustee has presented enough evidence of such assurance. However, the trustee does not have to provide adequate assurance if there is no default.

Non-Assumable Contracts

There are 3 types of contracts, specified by §365(c) , that are not assumable:

If a contract cannot be assigned, then it is not assumable. This provision does not depend on the terms of the contract but rather on its nature. For instance, if the contract called for the debtor to sing at a wedding, then obviously, the trustee cannot assume such a contract, since such a contract was agreed to because of the debtor's singing ability and not the trustee's.

But what if the bankruptcy administrator is a debtor in possession rather than a trustee? The courts have divided over the issue. Some courts stressed that the debtor in possession is a different legal entity than the debtor, hence, the contract was not assumable. The courts' reasoning has rested on a hypothetical test that asks not whether the debtor in possession can perform under the contract, but whether nonbankruptcy law would allow the assignment of the contract to a hypothetical 3 rd party. If not, then these courts have ruled that the contract is not assumable. Other courts have adopted the commonsensical approach that since the debtor and the debtor in possession are the same actual entity, then there should be no problem in allowing the contract to be assumed if it would benefit the estate.

To protect the unsecured creditors of the bankruptcy estate, the trustee or the DIP cannot assume any loans or other financing contracts for the debtor, even if the lender agrees to it. However, certain contracts whose primary purpose is other than giving a loan, such as leases or credit sales of goods or services, are assumable even though there is some extension of credit.

Sometimes the trustee wants to assume a valuable contract, but does not want to perform under it. In this case, the trustee may assume the contract, but then assign it to a 3 rd party for a fee. The assigned party acquires both the rights of the debtor under the contract and the delegation of its duties.

Because the trustee must assume the contract before assigning it, any limitation that applies to assumption also applies to assignment. The trustee may be able to assign the contract even if there are provisions in the contract against assignment unless it is clear that the contract requires something that only the debtor could uniquely supply, as noted above.

Furthermore, the trustee must provide adequate assurance that the assigned party is reasonably likely to be able to perform under the contract. This requirement is to reduce the likelihood that the assigned party will breach the contract, since, once assigned, §365(k) relieves the bankruptcy estate of all liability for any breaches by the assigned party.

B.C. court rules on condo purchase dispute that ended long-term friendship

A Vancouver condo owner was right to keep more than $300,000 her former friend paid her toward the purchase of the property before backing out of an assignment sale agreement, the B.C. Supreme Court has ruled.

Wei-Jen Wang and Weiqin Li were "longtime friends," according to the decision issued May 10 and posted online earlier this week . Their relationship "ended acrimoniously" after an agreement for Li to take over Wang's purchase of an under-development condo unit fell apart. 

Li sued Wang, alleging that no such agreement existed and the $340,188 she paid towards the purchase should be returned. Li also accused Wang of fraudulent misrepresentation, but withdrew that claim at the start of the trial.

Wang countersued, arguing that Li had repudiated the contract and was not entitled to a refund. She also claimed more than $200,000 worth of damages had allegedly resulted from the breach of contract, and sought to have the court order Li to pay her that amount.

B.C. Supreme Court Justice Nitya Iyer found largely in Wang's favour, dismissing Li's allegations and allowing Wang to keep her former friend's deposits. Iyer also awarded special costs to Wang because of Li's baseless fraud accusation, but the judge declined to award the damages Wang was seeking, ruling that Wang had failed to take any action to mitigate those damages.

The property and the purchase agreement

The condo in question is a unit in a building at 458 W. 63rd Ave. in Vancouver's Cambie Corridor, according to the court decision. The development at that address is known as "Reside." Developer Marcon completed construction in late 2019. 

Wang's unit, according to BC Assessment, has three bedrooms and two bathrooms, with 1,258 square feet of living space. The assessed value for 2024 was just over $1.6 million.

The agreement for Li to take over the purchase came about in late 2017, while the building was still under construction. It took the form of an "assignment sale," a term that describes a buyer entering a contract to purchase a piece of real estate, then transferring (or "assigning") their rights under the contract to a different buyer before the transaction is completed.

The court decision explains that Wang and Li both have families in Shanghai and have resided there in the past. While Wang was in that city caring for her mother in 2017, Li paid them a visit, and Wang mentioned that she had just acquired the pre-sale unit in Vancouver.

While the decision uses the term "acquired," it makes clear that Wang was not actually the person who signed the pre-sale contract. Rather, Wang's nephew Haw Wang was the purchaser, and his mother Lily Hui Hua Hsiao paid the deposits stipulated under the contract.

"The pre-sale contract expressly gave Mr. Wang the right to assign the pre-sale unit to Ms. Wang upon completion at no additional cost," the decision reads. "Ms. Wang had asked Mr. Wang to make the purchase on her behalf and asked Ms. Hsiao to make the payments to the developer stipulated in the pre-sale contract because they were both in Vancouver and she was in China."

When Li expressed interest in buying the property during the Shanghai meeting, Wei-Jen Wang agreed to assign the contract to her without taking an assignment fee "because they were friends," according to the decision.

What followed was an arrangement in which Hsiao made payments to Marcon on behalf of Wang, and was repaid by Li – again, on behalf of Wang, who was the only person of the three who had a contracted interest in the property, through her nephew.

"Sometime between September 2018 and January 2019, Ms. Li decided not to proceed further with acquiring the pre-sale unit," the decision reads. "In November 2018, Ms. Hsiao informed Ms. Li that the third deposit would be due in December. There were some communications about this. Ultimately, Ms. Li did not pay the third deposit. Ms. Hsiao paid it on Ms. Wang’s behalf."

In January 2019, Li visited Wang's home in Shanghai and the two had a "heated argument," according to the decision.

Li demanded that Wang return the money she had already paid toward the purchase, and Wang refused.

"This event marked the end of the friendship," the decision reads. "Ms. Li and Ms. Wang did not communicate again for about a year."

Who repudiated the contract?

The primary arguments in Li's claim were that there was never a contract for her to take over the purchase of the condo or, if there was, Wang was the one who breached it.

A review of WeChat messages between the parties helped Iyer conclude that the parties did have a binding agreement, even if it was never formalized as a single written document.

"In the context of their longstanding friendship, Ms. Li’s unequivocal statement on March 2, 2018, that she wanted the property and was agreeable to any payment terms created a binding agreement," the decision reads.

"The essential terms were the identity of the parties, identification of the pre-sale unit as the property and the purchase price. Ms. Li’s reimbursement of Ms. Hsiao for the March and June deposits is subsequent conduct that supports the conclusion that the parties objectively intended to enter into a binding contract."

Having reached this conclusion, the judge determined that Li had "repudiated" the contract.

In legal terms, "repudiating" a contract means breaching it in a way that "substantially defeats its objective," according to the decision.

Li argued that Wang had repudiated the contract by failing to assign it to her in a timely manner, but Iyer found there was insufficient evidence indicating that the timing of the assignment was a key term of the agreement.

"Even if assignment before the due date of the third deposit was a term of the assignment agreement, it was not a term sufficiently material that its breach could constitute repudiation," the decision reads.

Instead, Iyer found that Li had repudiated the agreement by refusing to make any further payments and demanding her money back. Wang's refusal to give her the money back constituted an "acceptance" of the repudiation.

"Where a purchaser makes partial payments towards the purchase of property, including through an assignment agreement, but then repudiates the contract, the vendor is entitled to keep those payment upon acceptance of the repudiation," the decision reads.

Thus, Iyer ruled, Wang was entitled to keep the $340,188 in payments Li made toward the purchase.

The judge dismissed Wang's claims for $233,749 in damages allegedly caused by Li backing out of the assignment agreement, concluding that she had not made any efforts to offset those costs – such as by renting out the unit.

"Ms. Wang has not established that the costs she claims in relation to mortgage interest, strata fees, property taxes, home insurance premiums and loss of interest on investment income were not recoverable by her from the rental income she could have received," the decision reads. 

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MLB Trade Rumors

Astros Trade Brandon Bielak To Athletics

By Steve Adams | May 16, 2024 at 11:22am CDT

The Astros traded right-hander Brandon Bielak to the Athletics in exchange for cash, per a team announcement. Houston designated him for assignment last week. The A’s designated left-hander Easton Lucas for assignment to open a spot on the 40-man roster.

Bielak, 28, struggled with the ’Stros this season, posting a 5.71 earned run average in ten appearances (17 1/3 innings). His 10.8% strikeout rate and 5.5% swinging-strike rate both stand as career-low marks.

That said, Bielak was a solid swingman in three prior seasons with Houston. From 2021-23, he notched a 4.05 ERA over the life of 142 1/3 innings, fanning a combined 19.2% of his opponents against a 9.8% walk rate. The former 11th-round pick made 15 starts and tallied another 33 relief appearances during that time. He’s not a flamethrower, but Bielak averaged 93.4 mph on his heater during that three-year stint and kept the ball on the ground at a strong 48.1% clip. He’s posted similar numbers in parts of four Triple-A campaigns, recording a 3.98 ERA with a 24.3% strikeout rate and 9.6% walk rate through 246 2/3 frames.

Bielak is out of minor league options, so he’ll jump right onto the Oakland staff. The A’s have placed starters Joe Boyle (back strain), Paul Blackburn (stress reaction in foot) and Alex Wood (shoulder tendinitis) on the injured list this month. They also announced that injured lefty Ken Waldichuk is done for the season due to elbow surgery. The addition of Bielak will help replenish some of that depth, whether he steps right into the rotation or provides a long-relief option. Rule 5 righty Mitch Spence has been Oakland’s primary long man this year, but he’s pitched well and could feasibly step into the rotation himself.

Because he has just 2.110 years of big league service, Bielak can be controlled for three more years beyond the current season. He’ll need to carve out a role for himself on the Athletics’ roster and get back to his 2021-23 form if that’s to even become a factor, but there’s potential for him to be a multi-year acquisition if Bielak can get back on track. He’ll be arbitration-eligible for the first time this winter and shouldn’t see an especially large raise, given his role as a low-leverage swingman and occasional back-end starter.

The addition of Bielak to the roster comes at the expense of the 27-year-old Lucas, who made his big league debut with the A’s last year but has only seen 10 1/3 total innings in the majors. It’s been a struggle in that small sample, to say the least. Lucas has been charged with a dozen earned runs (10.45 ERA) on 18 hits and a dozen walks with 13 strikeouts. A massive .459 average on balls in play has contributed to his ugly numbers, but Lucas hasn’t done himself any favors by walking just over 12% of his opponents.

As one would expect, things have gone better in the upper minors. Lucas split the 2023 season between Double-A and Triple-A, posting a combined 3.86 ERA in 46 2/3 innings. He punched out 25.8% of opponents against an 8.6% walk rate. The southpaw posted a 2.87 ERA in 15 2/3 innings of Triple-A work this year as well — albeit with just 13 strikeouts against six unintentional walks. The A’s acquired Lucas from the Orioles last July in the trade sending righty Shintaro Fujinami back to Baltimore.

Oakland selected Lucas to the 40-man roster last summer but passed him unclaimed through outright waivers just a couple months later, in November. Because of that prior outright assignment, he’ll have the right to reject a minor league assignment in favor of free agency even if he goes unclaimed a second time. As such, there’s a chance that today’s DFA ends his time with the A’s organization less than a year after he was acquired in a deadline swap.

49 Comments

Is it a trade or was he sold when cash is being exchanged back? Also, old fashioned cash and not a wire transfer? Lol. I’m having a bad work day and needed to vent without getting fired…

24 hours ago

Astros traded for cash trying to recover/recoup some of that 95 million they should not have paid Hader.

Bielak is so bad the Astros should be paying the A’s to take him haha, instant WIN!

He’s a month and a half into the contract and looks like he turned a corner. Hyperbole is not your friend.

Sorry. I hope he does turn it around and it looks like the team as a whole is actually in the process now of turning it around. So Bravo to them and I’m a Mariners fan.

If they traded him to the Athletics for cash it couldn’t have been more than 5 bucks or this is propaganda.

23 hours ago

George Kirby is my most favorite non Astros pitcher. Guy has a Cy Young in his future

He was great as the lead character in Topper, too.

22 hours ago

Mariners starting pitching is mind-bendingly elite. We have four guys who could be #1 starters on many teams and a fifth starter who could be a lot of team’s #2. Just praying for good luck on injuries and that the offense starts clicking with the warmer weather. Jerry will likely pick up a guy or two as well. I agree with you about Kirby (5 walks all season, he may have more HBP than BB lol) and I think Logan Gilbert could do the same thing. Cheers…hang in there Astros are definitely on the upswing, can feel their momentum up here…Rangers might actually be the team that stagnates this year.

20 hours ago

I agree with you re: elite, was just thinking about Mariners pitching last night. My fave non-Astro pitchers are Gerrit Cole, then Bradish, but next two are Gilbert & Kirby.

I *think* Astros are still the team to beat in the Division, that they are, at worst, same team as last year, and PROBABLY, actually, better than they showed last year. I’ll tell you what, though, last two weeks of last season, if we had NOT won every game we won, and you and the Rangers had not lost each of the games y’all lost, …… we squeeked in by the BAREST of margins.

Hopefully, y’all will notice us getting closer & closer behind you in the next week!

18 hours ago

I have total respect for the Astros due to their domination of the AL West over the last seven years. Regardless of where they are in the standings, they are the team the Mariners have to beat to get to the next level. It was encouraging to see the Mariners actually win the season series from them last year, after all the one-sided domination over the years…so baby steps. And yeah, the last two weeks of 2023 was indeed a roller coaster ride of emotions as we just missed out. It was so close there at the end, games hinging on one play or one pitch that the way the teams ended up was a roll of the dice. I appreciate you mentioning how nip and tuck things were, an admission that I never hear from Rangers or Astros fans. See your team here in Seattle soon for a 4 game set, cheers.

Some guy named Guido with a broken nose delivers a suitcase full of cash before they let the player get on a plane.

Helps a lot now that Bally isn’t paying anybody.

Smart that they wait until they have a series against a team to make a trade with them, that way the player(s) only have to walk across the field to a different dugout.

Wonder what they see in him, because his track record is that he walks alot, gives up hits, and does not strike out much, so he seems to pitch himself into jams

Most underrated stadium/history/team/fanbase/city/culture in MLB and Manfred owes them a huge apology and how dare he call it a piece of metal.

They got punished how they did because they embarrassed Manfred and MLB for how crude and moronic and blatant their cheating mechanism was…BANG BANG BANG is as caveman as it gets. So of course Manfred had to do something.

said this 50 minutes ago in a previous discussion, and now I’m sad

“I REALLY like having Bielak around; there are FAR worse options out there, and most teams are having to make do with those – he WILL get picked up by somebody, and provide some MLB value. Hope we get SOMETHING out of it, but I’d rather he stay here. It is comforting to have 10 or 11 viable MLBstarters around the org”

He’s just not a good enough pitcher. He can provide innings if you are desperate for a starter but he is not bullpen worthy. The Astros are getting healthy in their rotation so he became obsolete. The fact he was traded for cash shows what teams valued him at. Even the white Sox considered corey julks more valuable.

Have you ever watched baseball before?

Is this worse than being demoted to AAA?

Given that the Stros and A’s are essentially tied for 3rd place, seems like a wash. Both 6.5 games from the WC and 5.5 from 1st in the West.

And if you think the Astros and A’s are going to finish the year with essentially the same record you might need to find a new hobby.

Astros going nowhere this year. They’ll be a .500 ball club and miss the playoffs.

The A’s are making moves while the Cardinals are hard at work putting together the list of 2025 Cardinal Hall of Fame candidates and accompanying highlight video.

“If you can’t beat ’em, try to distract everyone with memories of when you could beat ’em!”

17 hours ago

Don’t worry the Cincinnati Reds are here to save Cardinal fans the indignity of finishing last in the NL Central.

Dumpster diving

Let the Houston fire sale begin…

They are like 2 players away from being a good playoff team, Old Dork

@Liberalsteve

You’re so mean, calling me a Dork. Now I’ll go cry to my mommy…

Pics of mom?

Who’s?

Trading Bielak actually makes the Astros better lol, new to baseball?

Yes, first time ever watching baseball in my whole life. I watched the Chicago Bears play the Yankees of New York City just recently. Great game, great game!

The A’s have a better bullpen than the Cubs, despite a more than 150MM difference in payrolls.

Yeah but that’s all they have that’s better than the Cubs. At least until some people start healing anyway. Then they won’t have that either.

Alzolay can heal all he wants, but he will never be Mason Miller.

Alzolay wasn’t even in my plans before the season started. Giving him the Closers job was a big mistake. Was really talking about Merryweather, Smyly and Palencia. That would solidify the pen and leave the kids for emergencies and let them hone their craft a bit at AAA.

has this writer never heard of Kyle Muller? He has had a better year in long relief than Spence

Bielak did an admirable job this season with all of the starter issues in Houston. There was a couple of stretches where he would pitch several days a week for multi innings when the starter self cumbusted. With all of the pitcher injuries this year, I’m surprised he was not one of them.

He did a REMARKABLE job last year, to keep us in it, in the face of a bunch of injuries too!

21 hours ago

Easton back to Marlins? If they’re sellers, they’re gonna need arms.

That’s the start of the Astros fire sale. Next up Verlander and Bregman to the Tigers

Julks – tick, Bielak – tick, Meyers – Anyone ?

Sometimes it Bielak that.

12 hours ago

Seems like the As already Stock up their pen with random Dudes for when they will trade away their “A” side of the pen.

Not sure if they trade miller (probably would take an absolute haul) but erceq certainly will be gone and maybe more guys.

7 hours ago

Why wouldn’t they trade Miller? He’s likely at the absolute max value this season. Whether he can convert into a starter is a huge unknown. If they keep him and he doesn’t pitch well as a starter or gets injured next season his value takes a huge hit. AJ Puk is example #1 of why this strategy carries massive risk. Ultimately, the A’s will take the biggest haul they’re offered at the deadline.

I think for the right haul they would trade him but only if it is massive.

When there isn’t a big enough offer they will roll the dice.

We will see how the market will be. I think the starter kit is 2 top100 prospect plus an organizational top15 prospect.

43 seconds ago

If he has a couple bad outings and his ERA blooms to 6.00 or if gets hurt then all of the sudden it’s a missed opportunity for the travelin’ As.

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