Bankruptcy 363 Sales and Successor Liability: Navigating Limitations on "Free and Clear" of Liens and Other Interests

Maximizing Available Protections For a Buyer, Negotiating and Litigating the Scope of 363 Sale Orders

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


Conducted on Wednesday, February 15, 2017

Recorded event now available

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Program Materials

This CLE webinar will discuss the doctrine of successor liability and an analysis of why that doctrine does not fit squarely with the doctrine of “free and clear” sales under Section 363(f) of the Bankruptcy Code. The program will analyze other examples of where the language in a “free and clear” sale order may not match the reality of whether a buyer will be insulated from future claims, and provide guidance on how to maximize the available protections for a buyer in the Section 363 sales process.

Description

Many Bankruptcy Court orders approving sales under Section 363(f) of the Bankruptcy Code include provisions purporting to make the sales “free and clear” of successor liability. However, it is not always clear that these provisions will be enforced in later actions by third parties against the buyers.

There are circumstances where the language of a “free and clear” sale order may not match the reality of whether a buyer will be insulated from future claims, and counsel must be able to structure the transaction to maximize the available protections for a buyer in the Section 363 sales process.

The limitations on sales free and clear of claims was illustrated by the Second Circuit’s decision in In re Motors Liquidation Co., where the court did not enforce part of the sale order because some claimants were not afforded adequate notice of the sale. The court’s ruling is instructive for future reliance on the Code’s free-and-clear provisions.

Listen as our authoritative panel of bankruptcy practitioners guides you through the limitations on “free and clear” sales and discusses how language of a “free and clear” sale order may not match the reality of whether a buyer will be insulated from future claims.

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Outline

  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

Benefits

The panel will address these and other key questions:

  • How should bankruptcy law and policy be applied to the doctrine of successor liability of Section 363 buyers?
  • Are there things that Section 363 buyers can do to reduce certain types of successor liability risk?
  • Are there risks for Section 363 buyers that are outside the scope of what bankruptcy can address?

Faculty

Benjamin W. Loveland
Benjamin W. Loveland

Counsel
Wilmer Cutler Pickering Hale and Dorr

Mr. Loveland is a member of the Firm's Bankruptcy and Financial Restructuring Practice Group. His practice focuses...  |  Read More

George W. Shuster, Jr.
George W. Shuster, Jr.

Partner
Wilmer Cutler Pickering Hale and Dorr

Mr. Shuster's practice focuses on bankruptcy, insolvency risk mitigation, out-of-court restructurings and debt...  |  Read More

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