Search Results for: "Section 363"
Don’t expect to challenge a 363 sale so easily. Find out why you should pursue other options for purchasing assets from a distressed seller.
Just Because a 363 Sale Says Free and Clear, Does Not Mean It’s True A bankruptcy debtor is offering commercial property in a section 363 sale. It is an attractive property and Lou is considering purchasing it. Lou has heard that a section 363(b) sale “cleans” the assets of all liens, claims, and encumbrances. However, he is skeptical that this is the case and is hesitating on making an offer to purchase the property. Lou’s skepticism is well-founded. There are cases where the property sold in a section 363 sale […]
Chilled Credit Bidding and the Section 363 Sale Section 363(k) of the Bankruptcy Code (the “Code”) allows a secured creditor to bid at a section 363 sale and use the amount of their claim to offset the purchase price at the sale, called “credit bidding.” A court may limit this right “for cause.” The “for cause” standard is not defined in the Code, and disagreement exists as to what constitutes “for cause.” Traditional bases for limiting credit bidding include challenges related to the lien itself, failure to correctly assert the […]
Under Section 363(f) Free and Clear Means Free and Clear: A Case Study Bankruptcy sales of assets under section 363(f) can bring more cash into the estate in part because the purchaser takes the assets “free and clear” of the liabilities of the debtor-seller. The Ormet[i] case illustrates that the “free and clear” quality of assets in the hands of the purchaser after a section 363 sale, trump claims against the seller that are supported by very strong Congressional policies. Using union labor in Ohio, the Ormet Corporation and related […]
(ASSETS SOLD FREE AND CLEAR OF LIENS) OVERVIEW Hot Shot HK, LLC (the “Company”) is a domestic wholesale supplier of apparel to retailers including specialty stores, department stores and off-price retailers marketing and selling fashion forward sportswear clothing under a number of trademarked names including: Hot Gal, Lemondrop, Double Click, Brat Star, Scream and Shout, Izzy and Me, Glamour and Co. The Company is selling its assets through an auction under bankruptcy court approved bidding procedures. Founded in 2011 and headquartered in the Garment district of New York City, the Company produces fashion forward women’s apparel, with all aspects of design and merchandising managed through their offices. The Company currently has the more than 50% of their manufacturing produced locally in NY to allow for quick lead time to meet orders shipping in the United Stated where more than approximately 95% of their customers are located. The Company leverages manufacturing […]
A sale conducted per section 363(b)(1) of the Bankruptcy Code outside of the ordinary course of the business of the debtor, and not under any plan of reorganization. By a section 363 sale, a debtor (as DIP or via a chapter 7 trustee) may sell substantially all of its assets, or any part of its assets (e.g., a business line, a machine, intellectual property, etc.). As occurred in the General Motors and Chrysler chapter 11 cases, a debtor may sell its business or part of it as a going concern. Very […]
The assets of TopPop, LLC dba TopPop Packaging (“TopPop”) will be sold in a Chapter 11 363 sale on November 29 th, with a bid deadline of November 20th . The company is a processor and packager of alcoholic and non-alcoholic beverages into single-serve soft containers for various private-label vendors throughout the United States and Canada. Professionals involved: Richard S. Feinsilver, Esq
Why would a secured creditor prefer to sell its collateral outside of bankruptcy? Here’s how time, money, and control differ in a 363 sale vs Article 9 sale.
A distressed business has a multitude of options to explore. Understand how Bankruptcy Code Section 363 works during a business bankruptcy.
Section 1111(b) Election: A Countermeasure for Undersecured, Secured Creditors Mathew 5:29 – And if thy right eye offend thee, pluck it out, and cast it from thee: for it is profitable for thee that one of thy members should perish, and not that thy whole body should be cast into hell. In a previous article about cram downs, in which a debtor can take steps to confirm a Chapter 11 plan despite rejection from creditors, I referred briefly to an undersecured, secured creditor’s countermeasure: the section 1111(b)(2) election. By […]