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and Medicare was required to remit the disputed amount to the debtor for use in the reorganization.
3.3 Providing Adequate Assurance of Future Performance.
Section 365(b)(1) triggers the debtor's obligation only when there has been a default under the executory contract or unexpired lease. If there was no default, the non-debtor party is not entitled to more protection under § 365(b)(1)(C) than the contract provides.
The statute does not tell how to determine if the assurance of future performance is "adequate." Where the assignee's financial strength is greater than the debtor's on the inception of the lease, the debtor may convince the court that the lessor is not entitled to more certainty of performance than it required when the contract was originally made.
An unsecured creditor objected to a distribution provision in a confirmed chapter 11 plan of reorganization that enforced a "double dividend" right in favor of senior indebtedness. In effect, the senior debt was entitled to double payment upon, among other triggers, the debtor's bankruptcy. The creditor, a landlord, argued that this was the kind of provision that § 365(e)(1) was intended to invalidate. The circuit court disagreed finding that the prohibition against ipso facto provisions in executory contracts was intended to protect the rights of the debtors under contract, not to affect claims between creditors and their rights to distribution. Accordingly,
