• Supply Contract Trumps Preference
  • June 13, 2012 | Author: David H. Conaway
  • Law Firm: Shumaker, Loop & Kendrick, LLP - Charlotte Office
  • Almond Products, Inc. A Supply contract may be an absolute defense to a preference claim. A supply contract is an “executory contract”, a bankruptcy term meaning a contract where both parties to the contract owe material performance obligations. In furtherance of the Chapter 11 policy of restructurings, the Bankruptcy Code provides that a debtor may, in its discretion, assume or reject an executory contract.