Purchases and Sales


June 12, 2017
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An Introduction to Bankruptcy Claims Trading: Part 2

Timothy C. Bennett Seyfarth Shaw LLP 620 Eighth Avenue New York, New York 10018 212-218-3386 Tbennett@seyfarth.com   Documenting a Claims Trade   In our previous article, we discussed the claims trading marketplace, focusing on its characteristics, the motivations for its participants, some basics of documentation, key business and legal structuring considerations, as well as risks borne by sellers and purchasers in these types of transactions.  In this article, we will take a closer look at the...

November 7, 2016
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Limiting Credit Bidding “For Cause” After In re Aeropostale

Lucas S. Smith
Student
University of Tennessee College of Law
lucas.s.smith@gmail.com


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.”[2]   A court may limit this right “for cause.”[3]  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...

September 19, 2016
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Litigation Funder Monetizes Portion of Fraudulent Transfer Judgment in Cutting-Edge Transaction

Christopher B. Wick
Hahn Loeser & Parks, LLP
200 Public Square Suite 2800
Cleveland, OH 44114
(216) 274-2489
cwick@hahnlaw.com

http://www.hahnlaw.com/


Gerchen Keller purchases a portion of the interest in proceeds of $213 million fraudulent conveyance judgment in innovative public sale. An interesting transaction took place on September 8, 2016. The chapter 7 bankruptcy trustee for Magnesium Corporation of America (“MagCorp”) sold a $50 million share of a $213 million judgment it has against fraudulent conveyance transferee, Renco Group Inc. and former MagCorp owner, Ira Rennert. The buyer, Gerchen Keller Capital LLC paid $26.2 million transaction...

April 17, 2015
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The Rumors of Kanye West Buying Karmaloop Have Been Greatly Exaggerated

Jon Petersen
Distressed Debt/Equities Research Team
jpetersen@dailydac.com


There has been a lot of hot air blown in the past couple of weeks regarding Kanye West and Dame Dash being interested in buying the troubled e-commerce retailer Karmaloop. The two made a series of Instagram posts where they described with some bluster how they were purchasing the company. "We just about to do some new shit, you know, stick together culturally -- take over the world and create a whole new industry and...

April 7, 2015
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Not Necessarily Free and Clear IV: RECOMMENDED READING on Antitrust Exposure of Purchaser of Assets From 363 Sale by Direct Competitor

From the Editorial Staff of Commercial Bankruptcy Investor


Buying the assets of a competitor out of a section 363 bankruptcy sale?  This site has explained here and here how section 363(f) of the Bankruptcy Code empowers a court to order that assets sold under section 363(b) of the Code are, in the hands of the purchaser, “free and clear” of any “interests” in the property that may have existed while it was in the hands of the debtor (or to have inured at any time prior...

March 18, 2015
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Salus Capital Seeks to Limit Credit Bidding Rights in RadioShack's Bankruptcy

Breaking News Alerts from Chapter11Dockets.com


As we reported yesterday on sister site Commercial Bankruptcy Litigation, one of RadioShack's lenders (Salus Capital Partners) filed an adversary complaint against other of RadioShack's lenders.  Today, the other shoe dropped as Salus filed a motion in RadioShack's Chapter 11 bankruptcy cases asking the bankruptcy court to limit those lenders' right to credit bid their claims in sales of RadioShack's assets.  In the motion, Salus, acting as the agent for lenders referred to as the...

February 11, 2015
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Not Necessarily Free and Clear III: Imposing Debtor’s Unemployment Insurance Ratings Onto Purchaser?

Jon Petersen
Distressed Debt/Equities Research Team
jpetersen@dailydac.com


On April 30, 2009, Chrysler and 25 of its direct and indirect subsidiaries (collectively, “Old Chrysler”) commenced bankruptcy cases that became jointly administered.[i] Scarcely a month later, Old Chrysler sold its assets through a sale under section 363 of the Bankruptcy Code to a newly-formed entity that went on to do business as Chrysler (“New Chrysler”). As discussed in a previous article, a section 363 sale allows a purchaser to take the assets free and...

January 23, 2015
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Not Necessarily Free and Clear II: Successor Liability in General Motors

Jon Petersen
Distressed Debt/Equities Research Team
jpetersen@dailydac.com


The scene is Detroit, and the time is early 2009. General Motors is in a pickle. Years of multi-billion dollar losses and mounting pension obligations have taken their toll on GM, and it is looking in to filing a chapter 11 bankruptcy as a means of becoming solvent once again. By June, the U.S. Government will approve bankruptcy proceedings (In re General Motors, 407 B.R. 463, 503-04), and the creation of a completely new entity,...

September 11, 2014
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Foreign Buyers of US Assets in Section 363 Sale: National Security Regulatory Review

Christopher M. Cahill
Lowis & Gellen LLP
Chicago, Illinois
312 628 7193
ccahill@lowis-gellen.com


Foreign entities are not barred by the Bankruptcy Code from purchasing assets in section 363 sales in bankruptcy cases.  Usually, the debtor’s estate and creditors welcome anyone who may bid up the sale price and raise the return to the estate and creditors from the auction sale.  For the foreign purchaser, buying assets out of a bankruptcy sale under section 363(c) promises, among other things, a rapid process, assets at a good price, and the...

July 15, 2014
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RECOMMENDED READING: How Fisker and Free Lance Star-Publishing Did Not Alter Credit-Bidding

From the Editorial Staff of Commercial Bankruptcy Investor


The Editorial Staff of Commercial Bankruptcy Investor recently reviewed the seemingly earth-shaking Fisker and Free Lance Star-Publishing orders limiting credit bidding rights. The Editorial Staff concluded that much of the angst is misplaced and that credit bidders should try to be the least bit cool in credit bidding, in particular to avoid inequitable behavior in pressuring for quick sales to them in bankruptcy and to avoid credit bidding with problematic lien coverage of the property...

July 7, 2014
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Try to Be the Least Bit Cool: Credit-Bidding After Fisker and Free Lance Star-Publishing

From the Editorial Staff of Commercial Bankruptcy Investor


Holders of secured debt now have two cases to make them nervous as to whether they got all they paid for with respect to their right to credit bid at a sale of the collateral in a section 363 sale in bankruptcy.  It may appear that both courts chopped back credit bidding rights solely to encourage cash bids.  It turns out that verbiage used in the two orders is more alarming than the actual bases...

June 10, 2014
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RECOMMENDED READING: PACA Claims in Bankruptcy

From the Editorial Staff of Commercial Bankruptcy Investor


Certain suppliers of agricultural goods get paid ahead of secured party, both inside bankruptcy and outside bankruptcy. The suppliers benefit from a federal statutory trust imposed to protect them from nonpayment. The goods involved are “fresh fruit and fresh vegetables of every kind and character” – and regulations set the limits on what qualifies. Suppliers must meet some procedural requirements. For a great primer on this subject, see: Sean M. Monahan & Dallas N. Cruz, “PACA...

June 4, 2014
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Not Necessarily Free and Clear I: Purchasing Real Property in a Section 363 Sale

From the Editorial Staff of Commercial Bankruptcy Investor


Lou is considering purchasing commercial real property from a company in bankruptcy. Lou is skeptical that, as he has heard, a section 363(b) sale “cleans” the assets of all liens, claims, and encumbrances. Lou’s skepticism is well-founded. The Golf Course Case. Golf course land was sold via a section 363 sale, and the sale was authorized by the bankruptcy court in a sale order that provided that the sale was “free and clear of all...



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