'Free And Clear' Means Free And Clear

Law360, New York (June 21, 2013, 1:21 PM EDT) -- In bankruptcy sales outside a plan of reorganization, Section 363(f) of the Bankruptcy Code permits estate property to be sold “free and clear of any interest in such property.” In the absence of a Bankruptcy Code definition of “interest,” the scope of the free and clear power of section 363(f) has been addressed by the courts on a case-by-case basis.

A clear trend toward an expansive definition of the term “interest” has emerged, with many courts — including those in the Second, Third and Fourth Circuits...
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