Asset Sales

Seventh Circuit Throws Potential Life Raft to Completely Underwater Junior Creditors by Leaving Open an Argument for Adequate Protection in a § 363 Sale

Adequate protection is one of the central protections provided to secured creditors by the Bankruptcy Code, and it is designed to protect against any diminution of the value of the secured creditor’s lien during the course of a debtor’s bankruptcy proceedings. Adequate protection must be provided when, among other circumstances, a debtor sells a secured creditor’s collateral pursuant to Bankruptcy Code § 363.

Chapter 15 Settlements and Sales: Noticing Foreign Creditors and the Three-Step Approval Process

Similar to domestic bankruptcy cases, in chapter 15 cases the sale or disposition of property located in the U.S. may be accomplished pursuant to asset sales under § 363 of the Bankruptcy Code, Rule 9019 settlements, or a combination of the two.[1] In a chapter 15 proceeding, the foreign representative must provide notice to all creditors regarding settlements and asset sales and obtain timely approval from the U.S.

Asset Sales July 2018

Asset Sales July 2018 

Asset Sales May 2018

Asset Sales May 2018

Spanish Peaks: What Happens When Leases Collide with a Bankruptcy Sale?

Editor’s Note: The following article, “Spanish Peaks’ Reinvigoration of the Precision Industries Debate: Rejection in the Context of a § 363 Sale Free and Clear of Commercial Leasehold Interests” won the prize for third place in the Tenth Annual ABI Bankruptcy Law Student Writing Competition. Mr.

Key Provisions in Bankruptcy Asset-Purchase Agreements

This article examines certain key provisions in asset-purchase agreements that practitioners will want to pay attention to when purchasing assets in bankruptcy sales.

Good-Faith Deposits

Interests and Good Faith Under 363: A New Decision Explores the Limits of Both

A recent decision from the U.S. Bankruptcy Court for the District of Montana highlights the limits of the term “interests” under § 363(f) of the Bankruptcy Code and the limits of “good faith” under § 363(m). In In re Mountain Divide LLC, Case No. 16-61015-11 (Bankr. D. Mont. 2016), the debtor filed a chapter 11 petition and, shortly thereafter, filed a motion to sell substantially all of its assets to Deep River Operating LLC and Future Acquisition North Dakota LLC (FAC). Deep River and FAC were considered a joint stalking-horse bidder.

Challenges to Finality of Sale Orders

Federal policy weighs heavily in favor of protecting the finality of sale orders in bankruptcy.[1] “It has been held that 11 U.S.C. § 363(m) ‘reflects the salutary policy of affording finality to judgments approving sales in bankruptcy by protecting good faith purchasers, the innocent third parties who rely on the finality of bankruptcy judgments….

In re Thane: If It Walks Like a Duck and Quacks Like Duck, It Still Might Not Be an Assumed Contract

On Feb. 21, 2018, the U.S. Bankruptcy Court for the District of Delaware issued its opinion in Stanley Jacobs Prod. Ltd. v. 9472541 Can. Inc. (In re Thane Int'l Inc.).[1] The issue was whether an executory contract that was neither affirmatively assumed nor rejected was assumed and assigned in a § 363 sale transaction.

Key Provisions in § 363 Sale Orders

Orders approving the sale of assets in bankruptcy provide the required authorization for the disposition of estate property outside of the ordinary course of the debtor’s business. Such orders may, among other things, allow for the sale of assets free and clear of interests held by third parties and offer good-faith purchasers protections from subsequent efforts to affect the validity of such sales, even in the event of reversal or modification on appeal.