The so-called "hypothetical test" adopted in cases such as Catapult and Sunterra has been widely criticized as potentially preventing a debtor-in-possession (DIP) from continuing to use certain unassignable contracts, such as its own patent and copyright licenses. This assumes that a debtor must elect either to assume or to reject its executory contracts at or before plan confirmation. If so, then an executory contract that is unassignable, and that is therefore unassumable under Catapult, can only be rejected.
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