Liquidating fiduciary

16 Jun

The change requires a hearing for such a sale; compliance with applicable nonbankruptcy law, especially regarding the privacy of consumer information; and either application of the debtor’s privacy policy terms or appointment of a consumer privacy ombudsman under §322 of the Bankruptcy Code.The parties then negotiate the asset-purchase agreement before the hearing.This practice will likely be curtailed because the Guidelines require that the form of proposed purchase agreement that is acceptable to the debtor, whether or not executed, be attached to the motion.Sony purchased the assets free and clear of any liens, claims, encumbrances or disputes, but at a higher auction-driven price than it had hoped for — a transaction that showed the advantages and disadvantages of the §363 sale process.The Bankruptcy Code is evolving to deal with issues that are peculiar to intellectual property.

As intangible assets such as trademarks, brand names, patents, customer lists and copyrights become more prevalent in §363 sales, financial or strategic investors may look to bankruptcy sales to secure potentially valuable intellectual property at a discount.

In January 2007, for example, Sony outbid three competitors to purchase 28 patents from the Chapter 7 debtor Ipix for .6 million.[FOOTNOTE 4] Sony had initially offered .2 million, but the auction process generated spirited bidding that drove the final purchase price

As intangible assets such as trademarks, brand names, patents, customer lists and copyrights become more prevalent in §363 sales, financial or strategic investors may look to bankruptcy sales to secure potentially valuable intellectual property at a discount.

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As intangible assets such as trademarks, brand names, patents, customer lists and copyrights become more prevalent in §363 sales, financial or strategic investors may look to bankruptcy sales to secure potentially valuable intellectual property at a discount.

In January 2007, for example, Sony outbid three competitors to purchase 28 patents from the Chapter 7 debtor Ipix for $3.6 million.[FOOTNOTE 4] Sony had initially offered $2.2 million, but the auction process generated spirited bidding that drove the final purchase price $1.4 million higher than the original offer.

This article focuses on sales under §363, which allows a buyer to obtain court approval of a purchase cheaper and faster (and with the advantages and protections of a court order largely intact) than through a reorganization plan or from a post-confirmation trustee.

A §363 sale transfers the acquired assets free and clear of any liens, claims and encumbrances. Bankruptcy Court for the Southern District of New York adopted Guidelines for the Conduct of Asset Sales (the Guidelines)[FOOTNOTE 2] to expedite the review and determination of applications to conduct asset sales.

The allowance of any breakup/topping fee is determined on a case-by-case basis.

.4 million higher than the original offer.

This article focuses on sales under §363, which allows a buyer to obtain court approval of a purchase cheaper and faster (and with the advantages and protections of a court order largely intact) than through a reorganization plan or from a post-confirmation trustee.

A §363 sale transfers the acquired assets free and clear of any liens, claims and encumbrances. Bankruptcy Court for the Southern District of New York adopted Guidelines for the Conduct of Asset Sales (the Guidelines)[FOOTNOTE 2] to expedite the review and determination of applications to conduct asset sales.

The allowance of any breakup/topping fee is determined on a case-by-case basis.