General Business Bankruptcy and Trustee Representation
Section 363 of the U.S. Bankruptcy Code is a powerful tool for trustees, restructuring debtors, and third party buyers alike. The attorneys at Lamberth, Cifelli, Ellis & Nason, P.A., are highly experienced in leveraging the benefits of this section of the Bankruptcy Code on behalf of a wide variety of entities and individuals seeking debt relief. We counsel businesses and individuals with regard to all facets of the sale (or purchase, as the case may be) of assets in bankruptcy and are prepared to tackle any issues as they may arise.
Contact our law office in Atlanta today to schedule an initial consultation.
Understanding 363 Sales
Pursuant to section 363 of the United States Bankruptcy Code, the Bankruptcy Court can authorize a trustee or debtor in possession to sell assets free and clear of any liens and encumbrances, which instead attach to the net proceeds of the sale.
Under certain circumstances, section 363 also authorizes the sale of assets co-owned by the debtor and nondebtor parties. By virtue of these provisions, in most instances, a higher value can be realized for the assets than if they remained encumbered.
Potential purchasers can also benefit by the provisions of section 363. Successor liability claims are greatly limited, and the Bankruptcy Court will make specific findings of fact and conclusions of law in the course of approving a section 363 sale intended to insulate the sale against collateral attack.
Assets that can be sold range from discrete pieces of equipment or property — to substantially all of the debtor’s assets. Many section 363 sales take the form of a semi-public auction, whereby the assets are broadly marketed and bidding procedures are established. In other instances, the debtor or trustee may already have a potential buyer in place, subject to higher and better bids. The scope, logistics, and mechanism of the sale are typically negotiated in advance, as the debtor in possession or trustee is required to exhaustively disclose to the Bankruptcy Court, creditors, and parties-in-interest, among other things, the identity of the assets being sold, terms of the sale, the identity of potential purchasers, and the procedures that will govern the sale.
For more information about the sale of assets in individual and business bankruptcy proceedings, contact our law office.