Ordinary Course of Business

The term is used several times in the Bankruptcy Code, including in §§ 363, 546, and 547. While not defined in the Bankruptcy Code, the term is very important and thus has been interpreted by a legion of case law because it is so significant.

In summary, what constitutes ordinary course of business is a function of both what is ordinary for the debtor and what is ordinary for businesses like the debtor. For example, a retail debtor can sell its inventory to retail customers without court approval, but if it wants to sell whole stores or enter into major new leases, it will require court approval.

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