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Investing in Distressed Businesses

Section 363 Sale: Free and Clear of Claims That Are Backed By Strong Public Policies

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 […]

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