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inding the insolvent company are automatically terminated. The administrator mayalso refuse further performance of certain executory agreements 29which theinsolvent company signed before the insolvency proceedings were opened. Thesecontracts might include financing arrangements, rent and lease contracts, contractsfor the purchase of goods subject to retention of title agreements, employmentcontracts, and service contracts. A claim arising out of the termination of thecontract might be a preferential claim or a general unsecured claim, depending onthe type of contract.In most cases, a solvent party to a contract may also exercise its rights to terminatethe contract when the other party opens an insolvency proceeding. If the only basisfor termination of the contract is the other party’s insolvency, however, that provisionof the contract might be deemed void if it conflicts with the Insolvency Code. 30b. FranceIn a redressement judiciaire, the company continues to operate its business duringthe observation period. Provided that the company complies with its undertakings,and notwithstanding any provision to the contrary, no contract in progress may beterminated by a third party without the prior consent of the administrateur judiciaire.However, all payment obligations by the company must be settled on a cash basis,unless otherwise agreed by the third party concerned.c. England and WalesContracts are unaffected by administration, and remain binding on the company (inthe absence of an insolvency termination clause). However, if a contract is not29 Agreements that have not been fully performed by both parties.30 Similar to the “ipso facto” clause in the U.S. Bankruptcy Code.21