Section 365 of the Bankruptcy Code authorizes a debtor to assume or reject an executory contract.[1] An executory contract that has expired in accordance with its terms is generally not subject to assumption or rejection under the Code.

Once disfavored, non-compete agreements — contractual provisions prohibiting employees from competing with their former employers upon the relationship’s termination — have acquired new legitimacy in recent decades.

[1]A trustee for a bankrupt entity or a debtor has the power to bring an action to avoid and recover constructive or actual fraudulent transfers. Section 544(b) of the Bankruptcy Code specifically allows a trustee or debtor to step into the shoes of an actual creditor of the debtor, who could have avoided the transfer outside of bankruptcy using state law. The U.S. Court of Appeals for the Seventh Circuit recently analyzed a debtor’s power to bring a state law fraudulent-transfer action..

When a bank fails and is liquidated by the Federal Deposit Insurance Corporation (FDIC), and then the bank’s holding company files for bankruptcy, a dispute frequently arises regarding ownership of tax refunds issued to a consolidated group (including the bank and the bank holding company) pursuant to consolidated tax returns.