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Sale Free and Clear

Not Necessarily Free and Clear I: Purchasing Real Estate Property in a Section 363 Sale

Just Because A 363 Sale Says Free and Clear, Does Not Mean It Is Free and Clear 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, […]


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 […]


Foreign Buyers of US Assets in Section 363 Sale: National Security Regulatory Review

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 […]


Section 363 Sale: Free and Clear of Claims That Are Backed By Strong Public Policies (Including Protecting Union Pensions)

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 recent Ormet[i] case illustrates that the “free and clear” quality of assets in the hands of the purchaser after a section 363 sale […]


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