# kaal:claim:3017612-027

**Claim.** A buy-sell agreement survives bankruptcy more reliably when it is not merely executory: because bankruptcy trustees may void executory agreements, an agreement that obliges both the shareholders and the entity to buy and sell is more likely to be enforced.

**Type.** mechanism  **Support.** argued

**Holds when.**

- shareholder becomes insolvent or enters bankruptcy

**Source quote.**

> Under US Law, bankruptcy trustees may void any agreement that is "executory," so to the extent a buy-sell agreement requires shareholders and the entity to buy and sell, it is more likely to survive bankruptcy.

**From.** Wulf A. Kaal, *Shareholder Agreements - National Report of the United States of America* (2017), III.4 Shareholders' Agreements in pre-insolvency situation, page 14

**Cite as.** Wulf A. Kaal, Shareholder Agreements - National Report of the United States of America (2017). SSRN: https://ssrn.com/abstract=3017612

**Verify.** sha256 of source PDF `33821db406f92efbe1698fbaed37687595c13b7ce5463b4a879df679fd4af1ac` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20-%202017%20-%20Shareholder%20Agreements%20-%20National%20Report%20of%20the%20United%20States%20of%20America.pdf

**Failure mode.** executory-buy-sell-avoided-in-bankruptcy  (family: enforcement-gap)

**Topics.** systemic-risk

**Keywords.** buy-sell-agreements, bankruptcy, executory-contracts, pre-insolvency

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