Cherry Picking (Financial Restructuring & Bankruptcy Glossary)

Summary

In bankruptcy, the process by which a debtor or trustee is permitted to assume favorable contracts and leases and to reject unfavorable contracts and leases. Cherry picking further means that as a general rule, a debtor cannot retain the benefits of a contract without accepting its burdens, but must assume or reject a contract in its entirety. However, if a single contract is comprised of multiple agreements, a debtor may assume certain parts of the a contract while rejecting others, as long as the contract is severable under applicable state law.