Under a common Chapter 11 scenario, a debtor and its prepetition lender agree to the filing of a Chapter 11 proceeding with the goal of selling the lender's collateral (either to a third party or to the lender) pursuant to 11 U.S.C. Section 363.
Debtors Cannot Sell Unsecured Creditor's Collateral
Under Section 363(f) of the Bankruptcy Code, a debtor may sell property free and clear of a third-party's liens, claims and encumbrances only if that party "could be compelled, in a legal or equitable proceeding, to accept a money satisfaction" of that party's interest in the property. However, in a recent case, the judge was faced with a relatively rare scenario.
By
Michael R. LastowskiThis premium content is locked for The Bankruptcy Strategist subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN The Bankruptcy Strategist
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already have an account? Sign In Now
For enterprise-wide or corporate access, please contact Customer Service at [email protected] or call 1-877-256-2473.
