363 Bankruptcy Sales

The Bankruptcy Code provides for a transparent and rules-based system of administering a debtor’s assets and distributing any proceeds to creditors through a plan of reorganization under Chapters 11, 13 and 12 or through a liquidation in Chapter 7. Section 363 of the U.S. Bankruptcy Code allows debtors or the trustee to sell – and buyers to purchase – a debtor’s assets free and clear of liens, claims and encumbrances in a bankruptcy sale process. Section 363 sales provide interested buyers with an opportunity to purchase valuable assets at a substantial discount to replacement value or to the fair market non-bankruptcy price. By virtue of their deep experience and expertise in the bankruptcy process, Thomas H. Curran Associates’s lawyers have successfully assisted purchasers and sellers of real property, equipment and other assets in section 363 sales.

Bankruptcy 363 sales involve several steps. First, the court must approve the debtor’s or the trustee’s terms of sale provided in a proposed sale order, which are sometimes contested by the trustee, debtor or creditors, and usually contain multiple provisions whose purpose is to ensure a transparent and fair bidding process that results in the highest sale price. The asset is then marketed and advertised, typically through a broker or auctioneer but sometimes directly by the debtor or trustee in a negotiated initial process. The sale process usually involves a stalking horse bidder with whom the trustee or debtor has negotiated a floor on the purchase. After the sale is conducted or the purchase agreement is approved, court approval is required to make the sale final. Depending upon the terms of the order authorizing the sale and the type of asset, the court may allow final counterbids. Upon entry of the sale order, a final 14 day appeal period follows before title is fully vested in the acquirer.

The bankruptcy attorneys at Thomas H. Curran Associates have the skills and experience necessary to guide clients through a Section 363 sale process, including performing due diligence, negotiating with the trustee or debtor and their counsel and navigating the other complexities of the 363 sale process. For clients seeking to bid at a Section 363 sale, our attorneys will take all of the steps necessary to ensure a productive and successful bid process that increases the likelihood of a winning bid on a distressed asset.