Burr Alert: All Experience is not Good Experience - Experience Ratings & 11 U.S.C. § 363(f)

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Recently, the Bankruptcy Court for the Northern District of Alabama joined with a number of courts in finding that a debtor's ability to sell their assets free and clear of any "interests" in property encompassed the right to purge the assets of a state labor department's right to transfer a company's unemployment experience rating to a purchaser of the company's assets.1

An overarching purpose of bankruptcy, whether in the context of a reorganization or a liquidation, is the maximization of value for the benefit of creditors of the Estate. Section 363(b) of the Bankruptcy Code permits a debtor or trustee to sell assets outside the ordinary course of business, following notice and a hearing. When such a sale occurs, 11 U.S.C. § 363(f) provides that this type of sale can be "free and clear of any interest in such property of an entity other than the estate" if particular factors are satisfied. See 11 U.S.C. § 363(f)(1)-(5).

Download the full article, "Burr Alert: All Experience is not Good Experience - Experience Ratings & 11 U.S.C. § 363(f)," written by James P. Roberts.

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