News & Analysis as of

Bankruptcy Code Section 363 Debtors

Troutman Pepper Locke

Should I Remain Employed by the Debtor? What to Know About KEIPs and KERPs - Creditor’s Rights Toolkit

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For a debtor in financial distress, having the right team in place to steward the company through a restructuring can mean the difference between success and failure. To incentivize top talent to stay with the debtor and...more

Mayer Brown

Section 363 Sales Considerations

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Distressed entities seeking to sell assets often encounter commercial and legal challenges related to existing claims or resistant constituents. One possible solution to those challenges is to sell assets in bankruptcy...more

Eversheds Sutherland (US) LLP

In re Urban Commons 2 West LLC (Bankr. SDNY Mar. 4, 2025)

Bankruptcy Court Elects to Follow Majority Interpretation of 11 U.S.C. § 363(f)(5) On March 4, 2025, the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy Court) issued a significant...more

Nelson Mullins Riley & Scarborough LLP

Purdue Does Not Bar Injunctions in Section 363 Sales, Says Recent Bankruptcy Decision

On January 24, 2025, the United States Bankruptcy Court for the Eastern District of Virginia entered an opinion denying a motion for a stay pending an appeal of a settlement motion in In re Hopeman Bros., Inc., No....more

Goodwin

Stalking Horse Bidders: What Bid Protections Can You Expect in a Section 363 Sale?

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Conducting an asset sale through a bankruptcy auction — a Section 363 sale — is an effective and common M&A tool for a distressed company. In anticipation of a 363 sale, a Chapter 11 debtor typically tries before its...more

Eversheds Sutherland (US) LLP

District Court affirms Bankruptcy Court’s denial of $21 million substantial contribution claim

On January 13, 2025, the United States District Court for the District of Delaware affirmed the decision by the Delaware Bankruptcy Court, holding that an unofficial committee representing tens of thousands of sexual abuse...more

Goodwin

Seven Success Factors for Winning Section 363 Acquisitions

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In the high-stakes world of bankruptcy asset acquisitions, Bankruptcy Code Section 363 provides a powerful mechanism for purchasing assets “free and clear” of most claims, liens, and encumbrances. Success in these...more

Jones Day

Ownership Dispute Regarding Foreign Debtor's U.S. Assets Must Be Resolved Before a U.S. Bankruptcy Court Can Approve Sale Under...

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As the enactment of chapter 15 of the Bankruptcy Code approaches its 20-year anniversary, U.S. bankruptcy courts are still grappling with some unresolved issues concerning how its provisions should be applied to best...more

Flaster Greenberg PC

Why Purchasing Commercial Assets in a Bankruptcy Sale May Be a Good Business Strategy

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Businesses generally file for bankruptcy because of financial challenges or operational issues. But, while their distressed business dissolves, there could be an opportunity for another business to acquire it through a...more

Jones Day

Fifth Circuit: Recent U.S. Supreme Court Ruling Did Not Alter Mootness Requirements for Unstayed Bankruptcy Sale Orders

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Section 363(m) of the Bankruptcy Code offers powerful protection for good-faith purchasers in bankruptcy sales because it limits appellate review of an approved sale, irrespective of the legal merits of the appeal....more

Troutman Pepper Locke

Should I Care That the Debtor Has Filed a Motion to Sell Its Assets? - Creditor’s Rights Toolkit

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Sales under Section 363 of the Bankruptcy Code have become commonplace in bankruptcy cases as a mechanism to liquidate a debtor's assets and maximize value for creditors. Selling the debtor's assets to a third party offers...more

Goodwin

Top 10 Questions About Bankruptcy Sales - A Primer on Sales Under Section 363 of the Bankruptcy Code

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A bankruptcy sale is an opportunity to potentially acquire assets at distressed pricing. A bankruptcy sale also presents prospective bidders with a level playing field to conduct due diligence, submit a bid, and compete...more

Nelson Mullins Riley & Scarborough LLP

The Fifth Circuit Joins the Eighth and Ninth Circuits in Holding that Avoidance Actions are Estate Property that may be Sold...

In an opinion on January 22nd, the Fifth Circuit Court of Appeals, in Matter of S. Coast Supply Co., 91 F.4th 376 (5th Cir. 2024), held that preference claims arising under 11 U.S.C. § 547 may be sold, reversing the dismissal...more

Fox Rothschild LLP

Assignments for the Benefit of Creditors – an often-overlooked state law alternative to Chapter 7 bankruptcy

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For some folks the three letters ABC are a reminder of elementary school and singing a song to learn the alphabet. For others, it is a throw back to the early 70’s when the Jackson Five and its lead singer Michael, still...more

Vinson & Elkins LLP

5th Circuit: Section 363(m) Mootness is Alive and Well

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On February 20, 2024, the United States Court of Appeals for the Fifth Circuit issued an Opinion, which held that challenges to “integral” aspects of a bankruptcy sale are statutorily moot under Bankruptcy Code § 363(m). In...more

Fox Rothschild LLP

How Safe Is Your 363(m) Sale? The Supreme Court’s Invalidation of Statutory Mootness is a Risk to Asset Purchasers Seeking...

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On April 19, 2023, Justice Ketangi Brown Jackson, writing for a unanimous Court in MOAC Mall Holdings LLC v. Transform Holdco LLC et.al., 598 U.S. ___ 143 S. Ct. 927 (2023), held that Bankruptcy Code section 363(m) is not...more

Levenfeld Pearlstein, LLC

Decision regarding Sears’ Retail Space in Mall of America Bankruptcy: Section 363(m) Is Not a Jurisdictional Statute

Section 363(m) of the Bankruptcy Code is one of the most important and well-known statutes to bankruptcy practitioners. This section of the Bankruptcy Code protects a good faith asset purchaser who purchases assets from a...more

Polsinelli

The MOAC Decision: Implications for DIP Lenders, Not Just for Asset Purchasers

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The Supreme Court’s April 19, 2023, decision in MOAC Mall Holdings, LLC v. Transform Holdco, LLC, 598 U.S.­­­___, ___S. Ct.___, 2023 WL 2992693 (April 19, 2023) resolved an existing circuit split by holding that section...more

Miller Canfield

Supreme Court Rules That Section 363(m) Protections for a Bankruptcy Sale Are Not Jurisdictional

Miller Canfield on

On April 19, 2023, the Supreme Court issued its opinion in MOAC Mall Holdings, LLC v. Transform Holdco, LLC. The decision has implications for sales of property in bankruptcy cases. Section 363(m) of the Bankruptcy Code...more

Jones Day

U.S. Supreme Court Rules Appellate Protection of Bankruptcy Property Sale Is Subject to Waiver and Estoppel

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In Short - The Situation: The U.S. Supreme Court considered whether § 363(m) of the Bankruptcy Code, which limits a party's ability to undo an asset transfer made to a good-faith purchaser in a bankruptcy case, is...more

Cadwalader, Wickersham & Taft LLP

United States Supreme Court Holds that Bankruptcy Code Section 363(m) Does Not Preclude Appellate Jurisdiction on Asset Sale...

In a ruling issued just yesterday, MOAC Mall Holdings LLC v. Transform Holdco LLC et al., 598 U.S. ----, 2023 WL 2992693 (2023) (“MOAC”), the United States Supreme Court (the “Supreme Court”) held that Bankruptcy Code section...more

Jones Day

Appeal of Unstayed Order Approving Bankruptcy Sale of Real Property Free and Clear of Lease and Related Settlement Agreement...

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To promote the finality of bankruptcy asset sales, section 363(m) of the Bankruptcy Code "moots" an appeal of an order approving a sale to a good-faith purchaser unless the party challenging the sale obtains a stay pending...more

Jones Day

Debtor Can Sell Assets Free and Clear of Successor Liability Claims Asserted by Union Pension Funds

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The ability of a bankruptcy trustee or chapter 11 debtor-in-possession to sell assets of the bankruptcy estate "free and clear" of "any interest in property" asserted by a non-debtor is an important tool designed to maximize...more

Jones Day

Texas District Court: Bankruptcy Sale Break-Up Fee Satisfied Both Business Judgment Test and Administrative Expense Standard

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Bankruptcy and appellate courts disagree over the standard that should apply to a request for payment of a break-up fee or expense reimbursement to the losing bidder in a sale of the debtor's assets outside the ordinary...more

Jones Day

Buyer's Bad Faith in Failing to Inform Court of Right of First Refusal Precludes Statutory Mootness of Bankruptcy Sale

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The finality of asset sales in bankruptcy is an indispensable feature of U.S. bankruptcy law designed to maximize the value of a bankruptcy estate as expeditiously as possible for the benefit of all stakeholders. To promote...more

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