Committee Call: Gifting in 363 Sales and Plans

The Unsecured Trade Creditors' Committee's call discussed “gifting” and other recent developments regarding application of the absolute priority rule. In In re ICL Holding, the Third Circuit Court of Appeals recently held that “gifting” is permissible in section 363 sales. Conversely, in prior opinions, both the Second and Third Circuits have held that “gifting” is not permissible in the context of a chapter 11 plan.