EXECUTORY CONTRACTS AND UNEXPIRED LEASES – Amended August 1, 2013
(a) Motion to Assume, Reject, or Assign Executory Contract or Unexpired Lease. A motion to assume, reject, or assign an executory contract or unexpired lease shall be served in accordance with the time limits set forth in Local Bankruptcy Rule 9006-1(b), which may be waived or modified upon the written consent of all parties entitled to notice of the motion. In the event that a nonconsensual order is sought on less than fourteen (14) days' notice, Local Bankruptcy Rule 9077-1 shall govern and an actual hearing shall be held.
(b) Assumption of Executory Contract or Unexpired Lease in Chapter 7 Case.
(1) Unless the Court orders otherwise, in a chapter 7 case, a trustee moving to assume an executory contract or unexpired lease of residential real property or personal property of the debtor shall seek to obtain a return date for the hearing on the motion that is within sixty (60) days after the order for relief or, if the time to assume has been extended, before the expiration of such extended period. If the trustee files a motion to assume or to extend the time to assume or reject an executory contract or unexpired lease of residential real property or personal property, and the motion is filed not later than sixty (60) days after the order for relief (or, if the time to assume or reject the executory contract or unexpired lease has been extended previously by order of the Court, before the expiration of the extended time) with a return date no later than fourteen (14) days from the date of such filing, the time to assume or reject the executory contract or unexpired lease shall be extended automatically and without court order until the entry of the order resolving the motion.
(2) The assumption by an individual debtor of a lease of personal property that is no longer property of the estate pursuant to Section 365(p)(2)(A) of the Bankruptcy Code shall not require the approval of the Court. Any party in interest that request an order of the Court approving such an assumption shall in its request prominently state the reasons for seeking such an order notwithstanding its knowledge that an order of the Court is not required for such assumption.
(c) Motion to Assume Unexpired Lease of Nonresidential Real Property. Unless the Court orders otherwise, in a case under any chapter, a debtor, debtor in possession or trustee moving to assume an unexpired lease of nonresidential real property under which the debtor is the lessee shall seek to obtain a return date for the hearing on the motion that is within one hundred twenty (120) days after the order for relief or, if the time to assume has been extended, before the expiration of such extended period. If the debtor, debtor in possession or trustee files a motion to assume or to extend the time to assume or reject an unexpired lease of nonresidential real property, and the motion is filed not later than one hundred-twenty (120) days after the order for relief (or, if the time to assume or reject the unexpired lease has been extended previously by order of the Court, before the expiration of the extended time) with a return date no later than fourteen (14) days from the date of such filing or, if the Court is unable to schedule a return date within such fourteen (14) day period, as soon thereafter as the return date may be scheduled by the Court, the time to assume or reject the unexpired lease will be extended automatically and without court order until the entry of the order resolving the motion, except that the time for the debtor, debtor in possession or trustee to assume or reject such unexpired lease shall not be extended beyond the date that is two hundred ten (210) days after the entry of the order for relief without the prior written consent of the landlord.
(d) Aircraft Equipment and Vessels. Unless the Court orders otherwise, a debtor in possession or trustee moving for approval of an agreement to perform all obligations of the debtor pursuant to section 1110(a)(1)(A) of the Bankruptcy Code shall seek to obtain a return date for the hearing on the motion that is within sixty (60) days after the order for relief or, if the time to assume has been extended by order of the Court, before the expiration of such extended period.
(e) Rolling Stock Equipment. Unless the Court orders otherwise, a trustee moving for approval of an agreement to perform all obligations of the debtor pursuant to section 1168(a)(1)(A) of the Bankruptcy Code shall seek to obtain a return date for the hearing on the motion that is within sixty (60) days after the date of commencement of the case or, if the time to assume has been extended by order of the Court, before the expiration of such extended period.
Comment
Subdivision (a) of this rule is derived from former Standing Order M-118. Subdivisions (b) and (c) of this rule are derived from Former Local Bankruptcy Rule 44(b) and (c). Subdivisions (d) and (e) of this rule, added in 1996, are derived from sections 1110 and 1168 of the Bankruptcy Code.
Section 365(d)(1) of the Bankruptcy Code contemplates that a hearing on a motion by a chapter 7 trustee to assume an executory contract or unexpired lease of residential real property or personal property of the debtor ordinarily will take place within sixty (60) days from the date of the order for relief. In addition, section 365(d)(4) of the Bankruptcy Code contemplates that a final hearing on a motion by a debtor, debtor in possession or trustee to assume an unexpired lease of nonresidential real property of the debtor ordinarily will take place within one hundred twenty (120) days from the date of the order for relief.
Under section 365(d)(1) of the Bankruptcy Code, in a chapter 7 case, the Court may, for cause, extend the sixty (60)-day time period for assuming or rejecting an executory contract or unexpired lease of residential real property or personal property. Similarly, under section 365(d)(4), the Court may, for cause, extend the one hundred twenty (120)-day time period for assuming or rejecting an unexpired lease of nonresidential real property. In 2004, subdivisions (b) and (c) of this rule were amended to avoid the necessity of obtaining a “bridge order” extending these time periods in the event that a timely motion to assume or a timely motion to extend the time was filed but not resolved by the Court before the expiration of the time to assume or reject the contract or lease. Adequate cause for an extension of time to assume or reject the executory contract or unexpired lease until the Court rules on the motion exists by virtue of the fact that a motion to assume or to extend the time was filed in a timely manner. Any party in interest objecting to the extension of time may request a hearing on an expedited basis. To prevent abuse of the automatic extension, the return date of the motion must be no later than fourteen (14) days after the motion is filed.
Subdivision (a) of this rule was amended in 2009 to change the time period from ten (10) to fourteen (14) days. The purpose of the amendment was to conform the time period in this rule to the 2009 time-related amendments to the Federal Rules of Bankruptcy Procedure. Throughout the Bankruptcy Rules, as well as the Local Bankruptcy Rules, most time periods that are shorter than thirty (30) days were changed so that the number of days is in multiples of seven (7), thereby reducing the likelihood that time periods will end on a Saturday or Sunday.
This rule was amended in 2013 to include in the new paragraph (2) of subdivision (b) the provisions of General Order M-415, which relates to an individual debtor’s assumption of a lease of personal property under section 365(p) of the Bankruptcy Code. General Order M-415 was abrogated and replaced by this local rule in 2013.
Subdivision (c) was amended in 2013 so that the automatic extension of time would apply if the Court is unable to schedule a return date within fourteen (14) days after the motion is filed, provided that the return date is as soon thereafter as it may be scheduled by the Court. Subdivision (d) was amended in 2013 to update the Bankruptcy Code cross reference to reflect Bankruptcy Code amendments subsequent to this local rule’s promulgation.