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by its terms. The insurer then sought payment of the deductible owed by the debtor for each claim, a total of about $2 million. The debtor opposed the request and argued that the insurer was entitled to administrative priority only for deductibles incurred on post-petition injuries, about $60,000. Judge Randolph Haines found that the worker compensation policy was not an executory contract, and thus could not be assumed, even though his prior order allowed assumption. Under Arizona law and the policy language, the insurer could not cancel the policy if the debtor failed to pay the deductible, so the parties' performance was not such that the failure of either to perform would excuse the other's performance. Only the debtor could terminate for breach under Arizona law. Accordingly, the insurer was entitled to compensation only for its post-petition performance.
Where the debtor's sole obligation is to indemnify the non-debtor party, the obligation is not an executory contract. An executory contract is one where obligations remain unperformed on both sides. Where the only obligation is one to pay money, the obligation is not an executory contract.
An assignment of the debtor's right to receive future alimony payments was not an executory contract that could be rejected by the debtor in a chapter 7 case, as the buyer of the alimony payments owed no further performance and the debtor lacked standing to seek rejection.
An investor agreed to contribute funds to a limited liability company in exchange for 25% of the members' interests and a priority over distributions to other members. The investor contributed the funds but the membership interest was never documented. The debtor LLC sought to reject the member's agreement to contribute funds to the LLC as an executory contract after the LLC filed its chapter 11 bankruptcy petition. The district court first affirmed the finding of fact that the
