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363 Sale

A Primer on the Chief Restructuring Officer (CRO)

A Brief History of the Chief Restructuring Officer The role of a Chief Restructuring Officer (“CRO”) is approximately four decades old.  While still a somewhat new role in the 1990s, CROs are now ubiquitous in the restructuring community.  Todd Zywicki, a George Mason law professor who specializes in bankruptcy law, traces the origin of the […]


Update on CFIUS National Security Review and the Section 363 Sale: Draper Athena as Stalking Horse for Assets of ATopTech, Inc.

A transaction in which a foreign company gains control of US assets can be hammered to sleep by the President acting upon the recommendation of the Committee on Foreign Investment in the United States (“CFIUS”).  The delay of CFIUS review and its potential draconian consequence affect the viability of foreign purchaser participation in asset sales […]


Limiting Credit Bidding “For Cause” After In re Aeropostale

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 […]


Do’s and Don’ts of Gifting in Bankruptcy: When a Court Will Look a Gift Horse in the Mouth  

The gifting doctrine in bankruptcy is not new and often is used to obtain creditor consensus to a debtor’s proposed exit – either through a chapter 11 plan or a 363 sale. A bankruptcy “gift” typically involves a structurally senior class voluntarily giving some of its property or distribution to a structurally junior class of […]


DOCKET BULLETIN: Court Overrules Chemours Objection / Approves Mississippi Phosphate’s Sale Motion

The United States Bankruptcy Court for the Southern District of Mississippi entered an Order last evening approving the amended sale motion of debtor Mississippi Phosphates Corporation (In re Mississippi Phosphates Corporation, et al., Case No. 14-51667-KMS, (the “Debtors”)), as well as separate settlements made between the Debtors and the Unsecured Creditors’ Committee (the “Committee”) and […]


Karmaloop Sale Approved Despite Committee Objection

A collection of Karmaloop’s creditors filed an objection in bankruptcy court to its proposed auction on Thursday, May14th. The objection was made as the Karmaloop auction was approaching, in which the company’s assets would be sold. This Official Committee of Unsecured Creditors felt that the sale, as proposed, would have allowed Karmaloop’s secured creditors to take the estate property and […]


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

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 […]


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

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 […]


Not Necessarily Free and Clear II: Successor Liability in General Motors

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 […]


LLC Membership Interests in Chapter 11 – Can They be Sold Over Other Members’ Objections?

When a chapter 11 debtor holds a membership interest in an LLC, it may be permissible for them to sell their membership interest in the LLC—or even force the sale of the entire LLC–over the objections of one or more other members. Or not. At the crux of the debate in various bankruptcy courts is […]


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