State court receiverships have become a popular alternative to federal bankruptcy proceedings for the sale of distressed businesses.[1] In Wisconsin, Wis. Stats.
Committees
It is no secret that restaurants and bars have high mortality rates. When these businesses fail, liquor licenses are frequently the only remaining valuable asset. Liquor licenses are crucial to restaurants and other hospitality venues’ ongoing operations and can be worth a lot of money.
After a bankruptcy case closed, a third party (CVC) sued the purchaser (ADM) of property acquired from the debtors in a bankruptcy sale. CVC claimed that it had a right of first refusal (ROFR) with respect to the property. In response, ADM contended that the ROFR did not survive the “free and clear” bankruptcy sale.
What happens when property of the estate that a trustee or debtor-in-possession proposes to sell “free and clear” is subject to unexpired lease interests? The resolution of this question requires the reconciliation of two separate provisions of the Bankruptcy Code that most often operate independently and in isolation. The first provision, 11 U.S.C.
Buyers of distressed companies typically prefer to conduct their acquisitions through bankruptcy. Various provisions of the Bankruptcy Code and Rules allow a buyer to acquire assets free and clear of a wide array of liabilities.
Bidding procedures establish a road map for the sale of a debtor’s assets in bankruptcy. This article examines certain key provisions a potential bidder on such assets will want included as part of the bidding procedures. While this list is not intended to be exhaustive, it serves as a good starting point for advancing the goals of a potential bidder.
During 2016, the Asset Sales Committee leadership has strived to provide committee members with access to helpful content and the opportunity to engage in discussions on relevant issues.
Conference Programs:
Bankruptcy Code § 363(e) requires that when property is sold free and clear of an interest in property, the court shall prohibit or condition such sale as is necessary to provide adequate protection of such interest.
In our current bankruptcy regime, sales under § 363 of the Bankruptcy Code are by far the norm, followed by conversion or dismissal, and sometimes, instead, a liquidating plan. Liquidating plans can be a favorable way to wrap up a bankruptcy case, freeing the debtor from many of the filing, procedural and disclosure burdens of the Bankruptcy Code and simplifying the wind-down process.
[1]Chapter 11 has largely become the sale chapter of the Bankruptcy Code. If the case is not a quick sale case, then it probably is a debt-for-equity swap. A traditional chapter 11 reorganization is expensive and, because of its relatively low success rate, is viewed by many lenders as not worth it.
Mr. Matthew J. LoCascio
Co-Chair
SC&H Capital
Ellicott City, MD
(443) 951-4846
Co-Chair
SC&H Capital
Ellicott City, MD
(443) 951-4846
Ms. Randye B. Soref
Co-Chair
Polsinelli
Los Angeles, CA
(310) 556-1801
Co-Chair
Polsinelli
Los Angeles, CA
(310) 556-1801
Mrs. Hayley G. Harrison
Communications Manager
Wernick Law PLLC
Miami, FL
(561) 961-0922
Communications Manager
Wernick Law PLLC
Miami, FL
(561) 961-0922
Ms. Jane Kim
Education Director
Keller Benvenutti Kim LLP
San Francisco, CA
(415) 364-6793
Education Director
Keller Benvenutti Kim LLP
San Francisco, CA
(415) 364-6793
Mr. William Hao
Membership Relations Director
Alston & Bird LLP
New York, NY
(212) 210-9417
Membership Relations Director
Alston & Bird LLP
New York, NY
(212) 210-9417
Mr. Christopher M. Candon
Newsletter Editor
Sheehan Phinney
Manchester, NH
(603) 627-8168
Newsletter Editor
Sheehan Phinney
Manchester, NH
(603) 627-8168
Mr. Steven L. Victor
Special Projects Leader
Development Specialists, Inc.
Chicago, IL
(312) 263-4141
Special Projects Leader
Development Specialists, Inc.
Chicago, IL
(312) 263-4141