Fewer Stalking Horse Perks Discourage Distressed Buyers

Law360, New York (March 14, 2014, 7:28 PM EDT) -- Stalking horse bids are key to a successful sale in a bankruptcy proceeding, but as courts heighten their scrutiny of bidder protections, some potential investors are opting to forgo the advantages of a bankruptcy auction process for the freedom of private sales, experts say.

Sales under Section 363 of the Bankruptcy Code offer obvious advantages to buyers interested in acquiring a bankrupt company's assets, most notably the right to purchase the property free and clear of encumbrances. But with judges leaning toward longer auction processes and...
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