Sep
20
Ruling Will Encourage Debtor’s Sales in Bankruptcy
ByThe United States Court of Appeals for the Third Circuit — which includes Delaware, home to many large American companies – has issued an opinion that will have a significant impact on Chapter 11 bankruptcy practice.
In short, the decision is apt to reinforce the tendency to resolve Chapter 11 cases by what is known as 363 sales, as opposed to traditional reorganization plans.
The case involved a debtor described as “once a leading operator of long-term acute care hospitals.” It was heavily indebted, but attempts to sell itself resulted only in offers that would not even clear the secured debt, let alone the more than $100 million of unsecured debt…
Ruling Will Encourage Debtor’s Sales in Bankruptcy
