Pursuant to 11 U.S.C. § 365, a debtor or bankruptcy trustee has the option, subject to court approval, of electing one of the following three alternatives with respect to an executory contract: (a) assuming the contract, (b) assuming and assigning the contract to a third party, or (c) rejecting the contract. Assumption of the contract, or assumption and assignment results in the agreement remaining in effect post-bankruptcy.

In a February 4, 2015 opinion, the bankruptcy judge presiding over Stockton, California's Chapter 9 municipal bankruptcy case approved Stockton's bankruptcy plan of adjustment.