In a nutshell, bankruptcy code section 363 allows a debtor to sell assets free and clear of liens and encumbrances.
In other words, a company can sell itself and the buyer can leave a bunch of bad sh*t behind. It’s a powerful tool and helps the buyer avoid any sort of “fraudulent conveyance” liability down the road. We’re seeing a proliferation of 363-based bankruptcy cases. In the last week, for instance, Barneys New York Inc., iPic-Gold Class Entertainment LLC, and Perkins & Marie Callender’s LLC all filed with the intent of pursuing sales (PETITION Note: see, also, Jack Cooper Ventures Inc. below).
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