§58‑30‑35. Executory contracts and unexpired leases.
(a) Except as providedin subsections (b), (c), and (d) of this section, the receiver, subject to theCourt's approval, may assume or reject any executory contract or unexpiredlease of the insurer.
(b) (1) Ifthere has been a default in an executory contract or unexpired lease of theinsurer, the receiver may not assume such contract or lease unless, at the timeof assumption of such contract or lease, the receiver:
a. Cures, or providesadequate assurance that the receiver will promptly cure, such default;
b. Compensates, orprovides adequate assurance that the receiver will promptly compensate, aparty, other than the insurer to such contract or lease, for any actualpecuniary loss to such party resulting from such default; and
c. Provides adequateassurance of future performance under such contract or lease.
(2) Subdivision (1) ofthis subsection does not apply to a default that is a breach of a provisionrelating to;
a. The insolvency orfinancial condition of the insurer at any time before the closing of the case;
b. The commencement ofa proceeding under this Article; or
c. The appointment ofor taking possession by a receiver in a proceeding under this Article or acustodian before such commencement.
(3) Notwithstanding anyother provision of this section, if there has been a default in an unexpiredlease of the insurer, other than a default of a kind specified in subdivision(2) of this subsection, the receiver may not require a lessor to provide servicesor supplies incidental to such lease before assumption of such lease unless thelessor is compensated under the terms of such lease for any services andsupplies provided under such lease before assumption of such lease.
(c) The receiver maynot assume or assign an executory contract or unexpired lease of the insurer,whether or not such contract or lease prohibits or restricts assignment ofrights or delegation of duties, if:
(1) a. Applicablelaw excuses a party, other than the insurer, to such contract or lease fromaccepting performance from or rendering performance to the receiver or anassignee of such contract or lease, whether or not such contract or leaseprohibits or restricts assignment of rights or delegation of duties; and
b. Such party does notconsent to such assumption or assignment; or
(2) Such contract is acontract to make a loan, or extend other debt financing or financialaccommodations, to or for the benefit of the insurer, or to issue a security ofthe insurer.
(d) (1) Ina proceeding under G.S. 58‑30‑105, if the receiver does not assumeor reject an executory contract or unexpired lease of the insurer within 60days after the order for liquidation, or within such additional time as theCourt, for cause, within such 60‑day period, fixes, then such contract orlease is deemed to be rejected.
(2) In a proceedingunder G.S. 58‑30‑80 the receiver may assume or reject an executorycontract or unexpired lease of the insurer at any time before the order for aplan of rehabilitation, but the Court, on request of any party to such contractor lease, may order the receiver to determine within a specified period of timewhether to assume or reject such contract or lease.
(e) (1) Notwithstandinga provision in an executory contract or unexpired lease, or in applicable law,an executory contract or unexpired lease of the insurer may not be terminatedor modified, and any right or obligation under such contract or lease may notbe terminated or modified, at any time after the commencement of the proceedingsolely because of a provision in such contract or lease that is conditioned on:
a. The insolvency orfinancial condition of the insurer at any time before the closing of theproceeding;
b. The commencement ofa proceeding under this Article; or
c. The appointment ofor taking possession by a receiver in a proceeding under this Article or acustodian before such commencement.
(2) Subdivision (1) ofthis subsection does not apply to an executory contract or unexpired lease ofthe insurer, whether or not such contract or lease prohibits or restrictsassignment of rights or delegation of duties, if:
a. Applicable lawexcused a party, other than the insurer, to such contract or lease fromaccepting performance from or rendering performance to the receiver or to anassignee of such contract or lease, whether or not such contract or leaseprohibits or restricts assignment of rights or delegation of duties and suchparty does not consent to such assumption or assignment; or
b. Such contract is acontract to make a loan, or extend other debt financing or financialaccommodations, to or for the benefit of the insurer, or to issue a security ofthe insurer.
(f) (1) Exceptas provided in subsection (c) of this section, notwithstanding a provision inan executory contract or unexpired lease of the insurer, or in applicable law,that prohibits, restricts, or conditions the assignment of such contract orlease, the receiver may assign such contract or lease under subdivision (2) ofthis subsection.
(2) The receiver mayassign an executory contract or unexpired lease of the insurer only if:
a. The receiver assumessuch contract or lease in accordance with the provisions of this section; and
b. Adequate assuranceof future performance by the assignee of such contract or lease is provided,whether or not there has been a default in such contract or lease.
(3) Notwithstanding aprovision in an executory contract or unexpired lease of the insurer, or inapplicable law that terminates or modifies, or permits a party other than theinsurer to terminate or modify, such contract or lease or a right or obligationunder such contract or lease on account of an assignment of such contract orlease, such contract, lease, right, or obligation may not be terminated ormodified under such provision because of the assumption or assignment of suchcontract or lease by the receiver.
(g) Except as providedin subdivisions (h)(2) and (i)(2) of this section, the rejection of anexecutory contract or unexpired lease of the insurer constitutes a breach ofsuch contract or lease:
(1) If such contract orlease has not been assumed under this section or under a plan of rehabilitationunder G.S. 58‑30‑80, immediately before the date of the filing ofthe petition; or
(2) If such contract orlease has been assumed under this section or under a plan of rehabilitationunder G.S. 58‑30‑80:
a. If before suchrejection the proceeding has not been converted to a proceeding under G.S. 58‑30‑105at the time of such rejection; or
b. If before suchrejection the case has been converted to a proceeding under G.S. 58‑30‑105: (i) immediately before the date of such conversion, if such contract or leasewas assumed before such conversion; or (ii) at the time of such rejection, ifsuch contract or lease was assumed after such conversion.
(h) (1) Ifthe receiver rejects an unexpired lease of real property of the insurer underwhich the insurer is the lessor, the lessee under such lease may treat thelease as terminated by such rejection, or, in the alternative, may remain inpossession for the balance of the term of such lease and any renewal orextension of such term that is enforceable by such lessee under applicableprovision of law outside of this Article.
(2) If such lesseeremains in possession, such lessee may offset against the rent reserved undersuch lease for the balance of the term after the date of the rejection of suchlease, and any such renewal or extension, any damages occurring after such datecaused by the nonperformance of any obligation of the insurer after such date,but such lessee does not have any rights against the estate on account of anydamages arising after such date from such rejection, other than such offset.
(i) (1) Ifthe receiver rejects an executory contract of the insurer for the sale of realproperty under which the purchaser is in possession, such purchaser may treatsuch contract as terminated, or, in the alternative, may remain in possessionof such real property.
(2) If such purchaserremains in possession:
a. Such purchaser shallcontinue to make all payments due under such contract but may offset againstsuch payments any damages occurring after the date of the rejection of suchcontract caused by the nonperformance of any obligation of the insurer aftersuch date, but such purchaser does not have any rights against the estate onaccount of any damages arising after such date from such rejection, other thansuch offset; and
b. The receiver shalldeliver title to such purchaser in accordance with the provisions of suchcontract, but is relieved of all other obligations to perform under suchcontract.
(j) A purchaser thattreats an executory contract as terminated under subsection (i) of thissection, or a party whose executory contract to purchase real property from theinsurer is rejected and under which such party is not in possession, has a lienon the interest of the insurer in such property for the recovery of any portionof the purchase price that such purchaser or party has paid.
(k) Assignment by thereceiver to a person of a contract or lease assumed under this section relievesthe receiver and the estate from any liability for any breach of such contractor lease occurring after such assignment. (1989, c. 452, s. 1.)
§58‑30‑35. Executory contracts and unexpired leases.
(a) Except as providedin subsections (b), (c), and (d) of this section, the receiver, subject to theCourt's approval, may assume or reject any executory contract or unexpiredlease of the insurer.
(b) (1) Ifthere has been a default in an executory contract or unexpired lease of theinsurer, the receiver may not assume such contract or lease unless, at the timeof assumption of such contract or lease, the receiver:
a. Cures, or providesadequate assurance that the receiver will promptly cure, such default;
b. Compensates, orprovides adequate assurance that the receiver will promptly compensate, aparty, other than the insurer to such contract or lease, for any actualpecuniary loss to such party resulting from such default; and
c. Provides adequateassurance of future performance under such contract or lease.
(2) Subdivision (1) ofthis subsection does not apply to a default that is a breach of a provisionrelating to;
a. The insolvency orfinancial condition of the insurer at any time before the closing of the case;
b. The commencement ofa proceeding under this Article; or
c. The appointment ofor taking possession by a receiver in a proceeding under this Article or acustodian before such commencement.
(3) Notwithstanding anyother provision of this section, if there has been a default in an unexpiredlease of the insurer, other than a default of a kind specified in subdivision(2) of this subsection, the receiver may not require a lessor to provide servicesor supplies incidental to such lease before assumption of such lease unless thelessor is compensated under the terms of such lease for any services andsupplies provided under such lease before assumption of such lease.
(c) The receiver maynot assume or assign an executory contract or unexpired lease of the insurer,whether or not such contract or lease prohibits or restricts assignment ofrights or delegation of duties, if:
(1) a. Applicablelaw excuses a party, other than the insurer, to such contract or lease fromaccepting performance from or rendering performance to the receiver or anassignee of such contract or lease, whether or not such contract or leaseprohibits or restricts assignment of rights or delegation of duties; and
b. Such party does notconsent to such assumption or assignment; or
(2) Such contract is acontract to make a loan, or extend other debt financing or financialaccommodations, to or for the benefit of the insurer, or to issue a security ofthe insurer.
(d) (1) Ina proceeding under G.S. 58‑30‑105, if the receiver does not assumeor reject an executory contract or unexpired lease of the insurer within 60days after the order for liquidation, or within such additional time as theCourt, for cause, within such 60‑day period, fixes, then such contract orlease is deemed to be rejected.
(2) In a proceedingunder G.S. 58‑30‑80 the receiver may assume or reject an executorycontract or unexpired lease of the insurer at any time before the order for aplan of rehabilitation, but the Court, on request of any party to such contractor lease, may order the receiver to determine within a specified period of timewhether to assume or reject such contract or lease.
(e) (1) Notwithstandinga provision in an executory contract or unexpired lease, or in applicable law,an executory contract or unexpired lease of the insurer may not be terminatedor modified, and any right or obligation under such contract or lease may notbe terminated or modified, at any time after the commencement of the proceedingsolely because of a provision in such contract or lease that is conditioned on:
a. The insolvency orfinancial condition of the insurer at any time before the closing of theproceeding;
b. The commencement ofa proceeding under this Article; or
c. The appointment ofor taking possession by a receiver in a proceeding under this Article or acustodian before such commencement.
(2) Subdivision (1) ofthis subsection does not apply to an executory contract or unexpired lease ofthe insurer, whether or not such contract or lease prohibits or restrictsassignment of rights or delegation of duties, if:
a. Applicable lawexcused a party, other than the insurer, to such contract or lease fromaccepting performance from or rendering performance to the receiver or to anassignee of such contract or lease, whether or not such contract or leaseprohibits or restricts assignment of rights or delegation of duties and suchparty does not consent to such assumption or assignment; or
b. Such contract is acontract to make a loan, or extend other debt financing or financialaccommodations, to or for the benefit of the insurer, or to issue a security ofthe insurer.
(f) (1) Exceptas provided in subsection (c) of this section, notwithstanding a provision inan executory contract or unexpired lease of the insurer, or in applicable law,that prohibits, restricts, or conditions the assignment of such contract orlease, the receiver may assign such contract or lease under subdivision (2) ofthis subsection.
(2) The receiver mayassign an executory contract or unexpired lease of the insurer only if:
a. The receiver assumessuch contract or lease in accordance with the provisions of this section; and
b. Adequate assuranceof future performance by the assignee of such contract or lease is provided,whether or not there has been a default in such contract or lease.
(3) Notwithstanding aprovision in an executory contract or unexpired lease of the insurer, or inapplicable law that terminates or modifies, or permits a party other than theinsurer to terminate or modify, such contract or lease or a right or obligationunder such contract or lease on account of an assignment of such contract orlease, such contract, lease, right, or obligation may not be terminated ormodified under such provision because of the assumption or assignment of suchcontract or lease by the receiver.
(g) Except as providedin subdivisions (h)(2) and (i)(2) of this section, the rejection of anexecutory contract or unexpired lease of the insurer constitutes a breach ofsuch contract or lease:
(1) If such contract orlease has not been assumed under this section or under a plan of rehabilitationunder G.S. 58‑30‑80, immediately before the date of the filing ofthe petition; or
(2) If such contract orlease has been assumed under this section or under a plan of rehabilitationunder G.S. 58‑30‑80:
a. If before suchrejection the proceeding has not been converted to a proceeding under G.S. 58‑30‑105at the time of such rejection; or
b. If before suchrejection the case has been converted to a proceeding under G.S. 58‑30‑105: (i) immediately before the date of such conversion, if such contract or leasewas assumed before such conversion; or (ii) at the time of such rejection, ifsuch contract or lease was assumed after such conversion.
(h) (1) Ifthe receiver rejects an unexpired lease of real property of the insurer underwhich the insurer is the lessor, the lessee under such lease may treat thelease as terminated by such rejection, or, in the alternative, may remain inpossession for the balance of the term of such lease and any renewal orextension of such term that is enforceable by such lessee under applicableprovision of law outside of this Article.
(2) If such lesseeremains in possession, such lessee may offset against the rent reserved undersuch lease for the balance of the term after the date of the rejection of suchlease, and any such renewal or extension, any damages occurring after such datecaused by the nonperformance of any obligation of the insurer after such date,but such lessee does not have any rights against the estate on account of anydamages arising after such date from such rejection, other than such offset.
(i) (1) Ifthe receiver rejects an executory contract of the insurer for the sale of realproperty under which the purchaser is in possession, such purchaser may treatsuch contract as terminated, or, in the alternative, may remain in possessionof such real property.
(2) If such purchaserremains in possession:
a. Such purchaser shallcontinue to make all payments due under such contract but may offset againstsuch payments any damages occurring after the date of the rejection of suchcontract caused by the nonperformance of any obligation of the insurer aftersuch date, but such purchaser does not have any rights against the estate onaccount of any damages arising after such date from such rejection, other thansuch offset; and
b. The receiver shalldeliver title to such purchaser in accordance with the provisions of suchcontract, but is relieved of all other obligations to perform under suchcontract.
(j) A purchaser thattreats an executory contract as terminated under subsection (i) of thissection, or a party whose executory contract to purchase real property from theinsurer is rejected and under which such party is not in possession, has a lienon the interest of the insurer in such property for the recovery of any portionof the purchase price that such purchaser or party has paid.
(k) Assignment by thereceiver to a person of a contract or lease assumed under this section relievesthe receiver and the estate from any liability for any breach of such contractor lease occurring after such assignment. (1989, c. 452, s. 1.)
§58‑30‑35. Executory contracts and unexpired leases.
(a) Except as providedin subsections (b), (c), and (d) of this section, the receiver, subject to theCourt's approval, may assume or reject any executory contract or unexpiredlease of the insurer.
(b) (1) Ifthere has been a default in an executory contract or unexpired lease of theinsurer, the receiver may not assume such contract or lease unless, at the timeof assumption of such contract or lease, the receiver:
a. Cures, or providesadequate assurance that the receiver will promptly cure, such default;
b. Compensates, orprovides adequate assurance that the receiver will promptly compensate, aparty, other than the insurer to such contract or lease, for any actualpecuniary loss to such party resulting from such default; and
c. Provides adequateassurance of future performance under such contract or lease.
(2) Subdivision (1) ofthis subsection does not apply to a default that is a breach of a provisionrelating to;
a. The insolvency orfinancial condition of the insurer at any time before the closing of the case;
b. The commencement ofa proceeding under this Article; or
c. The appointment ofor taking possession by a receiver in a proceeding under this Article or acustodian before such commencement.
(3) Notwithstanding anyother provision of this section, if there has been a default in an unexpiredlease of the insurer, other than a default of a kind specified in subdivision(2) of this subsection, the receiver may not require a lessor to provide servicesor supplies incidental to such lease before assumption of such lease unless thelessor is compensated under the terms of such lease for any services andsupplies provided under such lease before assumption of such lease.
(c) The receiver maynot assume or assign an executory contract or unexpired lease of the insurer,whether or not such contract or lease prohibits or restricts assignment ofrights or delegation of duties, if:
(1) a. Applicablelaw excuses a party, other than the insurer, to such contract or lease fromaccepting performance from or rendering performance to the receiver or anassignee of such contract or lease, whether or not such contract or leaseprohibits or restricts assignment of rights or delegation of duties; and
b. Such party does notconsent to such assumption or assignment; or
(2) Such contract is acontract to make a loan, or extend other debt financing or financialaccommodations, to or for the benefit of the insurer, or to issue a security ofthe insurer.
(d) (1) Ina proceeding under G.S. 58‑30‑105, if the receiver does not assumeor reject an executory contract or unexpired lease of the insurer within 60days after the order for liquidation, or within such additional time as theCourt, for cause, within such 60‑day period, fixes, then such contract orlease is deemed to be rejected.
(2) In a proceedingunder G.S. 58‑30‑80 the receiver may assume or reject an executorycontract or unexpired lease of the insurer at any time before the order for aplan of rehabilitation, but the Court, on request of any party to such contractor lease, may order the receiver to determine within a specified period of timewhether to assume or reject such contract or lease.
(e) (1) Notwithstandinga provision in an executory contract or unexpired lease, or in applicable law,an executory contract or unexpired lease of the insurer may not be terminatedor modified, and any right or obligation under such contract or lease may notbe terminated or modified, at any time after the commencement of the proceedingsolely because of a provision in such contract or lease that is conditioned on:
a. The insolvency orfinancial condition of the insurer at any time before the closing of theproceeding;
b. The commencement ofa proceeding under this Article; or
c. The appointment ofor taking possession by a receiver in a proceeding under this Article or acustodian before such commencement.
(2) Subdivision (1) ofthis subsection does not apply to an executory contract or unexpired lease ofthe insurer, whether or not such contract or lease prohibits or restrictsassignment of rights or delegation of duties, if:
a. Applicable lawexcused a party, other than the insurer, to such contract or lease fromaccepting performance from or rendering performance to the receiver or to anassignee of such contract or lease, whether or not such contract or leaseprohibits or restricts assignment of rights or delegation of duties and suchparty does not consent to such assumption or assignment; or
b. Such contract is acontract to make a loan, or extend other debt financing or financialaccommodations, to or for the benefit of the insurer, or to issue a security ofthe insurer.
(f) (1) Exceptas provided in subsection (c) of this section, notwithstanding a provision inan executory contract or unexpired lease of the insurer, or in applicable law,that prohibits, restricts, or conditions the assignment of such contract orlease, the receiver may assign such contract or lease under subdivision (2) ofthis subsection.
(2) The receiver mayassign an executory contract or unexpired lease of the insurer only if:
a. The receiver assumessuch contract or lease in accordance with the provisions of this section; and
b. Adequate assuranceof future performance by the assignee of such contract or lease is provided,whether or not there has been a default in such contract or lease.
(3) Notwithstanding aprovision in an executory contract or unexpired lease of the insurer, or inapplicable law that terminates or modifies, or permits a party other than theinsurer to terminate or modify, such contract or lease or a right or obligationunder such contract or lease on account of an assignment of such contract orlease, such contract, lease, right, or obligation may not be terminated ormodified under such provision because of the assumption or assignment of suchcontract or lease by the receiver.
(g) Except as providedin subdivisions (h)(2) and (i)(2) of this section, the rejection of anexecutory contract or unexpired lease of the insurer constitutes a breach ofsuch contract or lease:
(1) If such contract orlease has not been assumed under this section or under a plan of rehabilitationunder G.S. 58‑30‑80, immediately before the date of the filing ofthe petition; or
(2) If such contract orlease has been assumed under this section or under a plan of rehabilitationunder G.S. 58‑30‑80:
a. If before suchrejection the proceeding has not been converted to a proceeding under G.S. 58‑30‑105at the time of such rejection; or
b. If before suchrejection the case has been converted to a proceeding under G.S. 58‑30‑105: (i) immediately before the date of such conversion, if such contract or leasewas assumed before such conversion; or (ii) at the time of such rejection, ifsuch contract or lease was assumed after such conversion.
(h) (1) Ifthe receiver rejects an unexpired lease of real property of the insurer underwhich the insurer is the lessor, the lessee under such lease may treat thelease as terminated by such rejection, or, in the alternative, may remain inpossession for the balance of the term of such lease and any renewal orextension of such term that is enforceable by such lessee under applicableprovision of law outside of this Article.
(2) If such lesseeremains in possession, such lessee may offset against the rent reserved undersuch lease for the balance of the term after the date of the rejection of suchlease, and any such renewal or extension, any damages occurring after such datecaused by the nonperformance of any obligation of the insurer after such date,but such lessee does not have any rights against the estate on account of anydamages arising after such date from such rejection, other than such offset.
(i) (1) Ifthe receiver rejects an executory contract of the insurer for the sale of realproperty under which the purchaser is in possession, such purchaser may treatsuch contract as terminated, or, in the alternative, may remain in possessionof such real property.
(2) If such purchaserremains in possession:
a. Such purchaser shallcontinue to make all payments due under such contract but may offset againstsuch payments any damages occurring after the date of the rejection of suchcontract caused by the nonperformance of any obligation of the insurer aftersuch date, but such purchaser does not have any rights against the estate onaccount of any damages arising after such date from such rejection, other thansuch offset; and
b. The receiver shalldeliver title to such purchaser in accordance with the provisions of suchcontract, but is relieved of all other obligations to perform under suchcontract.
(j) A purchaser thattreats an executory contract as terminated under subsection (i) of thissection, or a party whose executory contract to purchase real property from theinsurer is rejected and under which such party is not in possession, has a lienon the interest of the insurer in such property for the recovery of any portionof the purchase price that such purchaser or party has paid.
(k) Assignment by thereceiver to a person of a contract or lease assumed under this section relievesthe receiver and the estate from any liability for any breach of such contractor lease occurring after such assignment. (1989, c. 452, s. 1.)
