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

Recording of a 90-minute CLE webinar with Q&A

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Conducted on Wednesday, May 13, 2020

Recorded event now available

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Course Materials

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.


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.



  1. Overview of Section 363 sales and "free and clear" protections: in rem and in personam perspectives
  2. Overview of "successor liability" under non-bankruptcy law
  3. Recent decisions limiting free and clear protections for Section 363 buyers facing successor liability claims
  4. Practice tips: negotiating and litigating the scope of Section 363 sale orders
  5. 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?


Hoffmann, Timothy
Timothy (Tim) Hoffmann

Jones Day

Mr. Hoffmann's practice focuses primarily on bankruptcy and insolvency-related matters. He has represented debtors,...  |  Read More

Wilson, Thomas
Thomas A. (Tom) Wilson

Jones Day

Mr. Wilson advises corporate, financial, and municipal clients in insolvency and restructuring situations across a...  |  Read More

Reynolds, T. Daniel
T. Daniel Reynolds

Jones Day

Mr. Reynolds is a corporate restructuring lawyer who represents major constituencies involved in distressed...  |  Read More

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