Follow Us

Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

Bankruptcy Litigation

Sixth Circuit: Section 363 Sale Not ‘Free and Clear’ of Creditor’s Claims

Buyers generally assume that the multi-page “free and clear” order, which typically follows the sale hearing, will insulate them from any of the seller’s current (and often) future liabilities. However, that is not always the case.

X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

The preferred method of acquiring distressed assets from an owner facing significant liabilities is often through a sale under Section 363 of the Bankruptcy Code. In fact, many practitioners today view Chapter 11 as more of a vehicle to convey assets rather than reorganizing around them. Buyers generally assume that the multi-page “free and clear” order, which typically follows the sale hearing, will insulate them from any of the seller’s current (and often) future liabilities. However, that is not always the case.

To continue reading,
become a free ALM digital reader

Benefits include:

*May exclude premium content

Read These Next