Buyer, Beware: Pitfalls Of Purchasing Bankrupt Assets

Law360, New York (April 27, 2012, 1:35 PM EDT) -- If you are one of the lucky product manufacturers who weathered the recent economic downturn well and are looking to buy assets from those who did not survive ... beware!

Section 363(f) of the U.S. Bankruptcy Code permits the sale of property of a bankrupt estate “free and clear.” A bankruptcy sale order “is a judgment that is good as against the world, not merely as against parties to the proceeding.”[1]

Indeed, the Section 363(f) “free and clear” transfer is a crucial inducement in attracting purchasers...
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