When Is Assurance Of Future Performance Adequate?

Law360, New York (November 26, 2007, 12:00 AM EST) -- Most M&A transactions that are structured as asset sales and that involve the acquisition of a going concern contemplate the assignment to the buyer of the seller’s rights under key executory contracts.

Outside of bankruptcy, “anti-assignment” clauses in such contracts can put the non-seller parties in a powerful position, enabling them to negotiate concessions for their consent to the desired assignments or to withhold their consent altogether.

When an asset sale is effected under the Bankruptcy Code, Section 365(f) permits a debtor to assume and assign...
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