Sale Order May Not Protect You From Everything

Law360, New York (December 14, 2011, 12:42 PM EST) -- The power of bankruptcy courts to enter orders granting motions to sell some, substantially all, or all of a debtor’s assets “free and clear” of any claims or interests pursuant to Bankruptcy Code Section 363(f), or to approve such sales under Bankruptcy Code Section 1141(c) as part of a plan of reorganization (or liquidation) is well known.

Buyers of such assets often rely on language in sale orders or plans to insulate themselves from liability connected with the purchased assets, including potential successor liability claims. Two...
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