Free And Clear Sales Under Section 363

Law360, New York (November 14, 2007, 12:00 AM EST) -- One of the primary advantages of purchasing assets in a sale under Section 363 of the Bankruptcy Code is that a prospective purchaser can acquire the assets “free and clear of any interest” in the assets if the sale complies with Section 363(f).

Purchasers have come to assume, albeit with inconsistent judicial concurrence, that a sale “free and clear of any interest” in the assets sold under Section 363(f) necessarily insulates them from successor liability for pre-petition “claims” against the seller.

On Sept. 27, 2007, the...
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