Bankruptcy 363 Sales and Successor Liability: Limits to Selling "Free and Clear" of All Claims and Interests
Structuring, Documenting, and Noticing Bankruptcy Sales to Avoid Post-Closing Claims Against the Purchaser
Course Details
- smart_display Format
On-Demand
- signal_cellular_alt Difficulty Level
- work Practice Area
Bankruptcy
- event Date
Wednesday, May 13, 2020
- schedule Time
1:00 p.m. ET./10:00 a.m. PT
- timer Program Length
90 minutes
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This 90-minute webinar is eligible in most states for 1.5 CLE credits.
This CLE course will discuss when a Bankruptcy Code Section 363(f) sale may not be as "free and clear" as the parties intended and the best options for averting any post-sale claims.
Mr. Reynolds is a corporate restructuring lawyer who represents major constituencies involved in distressed transactions. This includes companies both in and out of bankruptcy, as well as unsecured creditors' committees and other major stakeholders.
Mr. Hoffmann's practice focuses primarily on bankruptcy and insolvency-related matters. He has represented debtors, lenders, strategic investors, and various other parties in financially distressed situations, including both in-court and out-of-court restructurings.
Mr. Wilson advises corporate, financial, and municipal clients in insolvency and restructuring situations across a variety of industries. These industries include automotive, mining, gaming, energy, retail, manufacturing, and financial services, with particular experience in municipal bankruptcy and the liquidation of complex corporate enterprises. Mr. Wilson played a key role in the successful resolution in the historic chapter 9 case of the City of Detroit, Michigan. He regularly counsels clients in all aspects of bankruptcy and restructuring matters, including distressed asset transactions, supplier issues, fraudulent conveyance, preference and fiduciary duty actions, environmental and mass tort liability, post-petition financing, and jurisdictional issues arising in bankruptcy. Mr. Wilson's clients span the spectrum of interested parties in restructuring matters, including debtors and potential debtors, prepetition secured creditors, creditors' committees, parents of insolvent subsidiaries, avoidance actions defendants, and sellers and purchasers of assets.
Bankruptcy Code Section 363(f) sale orders include language to avoid saddling the purchaser with post-sale claims based on principles of successor liability. Orders typically decree that the purchaser cannot be deemed a legal successor of the debtor, to have merged with the debtor, or to be continuing the debtor's business. These broad provisions are no perfect assurance against post-closing claims, however.
Counsel must decide the best way to effectuate the sale to maximize the protections available to the buyer, including picking the best structure, best types of notice to potential claimants, and decide whether to proceed under Section 363, under a plan of reorganization, or some other process.
Counsel must also anticipate that courts other than bankruptcy courts may interpret these orders.
Listen as our authoritative panel of seasoned bankruptcy practitioners guides you through the issues that may limit "free and clear" sales under Section 363 and the best drafting and structuring options to ensure that the purchaser's reality meets its expectations.
- Overview of Section 363 sales and "free and clear" protections: in rem and in personam perspectives
- Overview of "successor liability" under non-bankruptcy law
- Recent decisions limiting free and clear protections for Section 363 buyers facing successor liability claims
- Practice tips: negotiating and litigating the scope of Section 363 sale orders
- Practice tips: litigating claims against Section 363 buyers in non-bankruptcy courts
The panel will review these and other vital questions:
- How do the goals and policies underlying Section 363 and principles of successor liability clash?
- Whan can Section 363 buyers do to reduce the risk of unexpected successor liability claims?
- What types of assets are more likely to generate post-sale claims?
- What risks cannot be addressed or mitigated by Section 363?
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