Abstract

http://ssrn.com/abstract=999347
 


 



The Flip Side of Twist Cap: Letters of Credit as Executory Contracts in Bankruptcy


Stephen M. McJohn


Suffolk University Law School


Wayne Law Review, Vol. 38, p. 1379, 1992

Abstract:     
This article analyzes the treatment of letters of credit as executory contracts in bankruptcy. Some courts had stated that the bankruptcy of the beneficiary terminates a letter of credit. This article concludes that decisions were incorrect in treating a letter of credit as an executory contract to provide financial accommodations to the beneficiary. A letter of credit is not a means to provide credit to the beneficiary: it is a means to provide credit to the applicant (and thereby allowing the applicant and beneficiary to avoid extending credit to each other). The issuer is not dependent on the credit risk of the beneficiary, rather that of the applicant. So terminating the letter of credit due to the beneficiary's bankruptcy does not fit the executory contract framework in bankruptcy.

Number of Pages in PDF File: 40

Accepted Paper Series





Download This Paper

Date posted: July 12, 2007  

Suggested Citation

McJohn, Stephen M., The Flip Side of Twist Cap: Letters of Credit as Executory Contracts in Bankruptcy. Wayne Law Review, Vol. 38, p. 1379, 1992. Available at SSRN: http://ssrn.com/abstract=999347

Contact Information

Stephen M. McJohn (Contact Author)
Suffolk University Law School ( email )
120 Tremont Street
Boston, MA 02108-4977
United States
Feedback to SSRN


Paper statistics
Abstract Views: 1,320
Downloads: 187
Download Rank: 96,337

© 2014 Social Science Electronic Publishing, Inc. All Rights Reserved.  FAQ   Terms of Use   Privacy Policy   Copyright   Contact Us
This page was processed by apollo4 in 0.297 seconds