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First American - Option or Right of First Refusal: Which Is It? (5222 words) |
 | If such alternative rights must be inserted in the agreement, the partiesâ counsel should be careful to clearly and conspicuously spell out in detail the terms of each of such rights and the circumstances under which one or the other will prevail (to avoid an ambiguity that must be decided by a court). |
| M.D. Carolina 2003), the bankruptcy court held that, based on the facts and circumstances of the case, the landlordâs right of first refusal to purchase the buildings and permanent improvements constructed on the leased land by the debtor-tenant was enforceable and would not be excised by the court. |
| The court also noted that the majority of courts hold that a right of first refusal is an executory contract, but stated that â[w]hether the right of first refusal is part of a larger executory contract or lease, or stands alone, should not alter the treatment of that right. |
| Jones Day - Publications - Right Of First Refusal Not Invalid Restriction On Assignment (1804 words) |
| First, it generally invalidates contract provisions (or laws) that operate to terminate or modify the debtor’s rights as a consequence of its bankruptcy filing or financial condition. |
| Some courts hold that a right of first refusal is an invalid restriction on assignment, generally because it chills bidding on a debtor’s leases by removing any incentive for a prospective assignor to bid on a contract that it has little chance of obtaining. |
| Next, the district court examined whether the right of first refusal was an invalid restriction or condition on the debtor’s ability to assign the operating agreement. |
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