Two of the most important aspects of a Chapter 11 bankruptcy is when the Court confirms your reorganization plan and you sell off some of your company’s major assets to pay off your creditors. The liquidation of this property is referred to as a “363 sale”.
You may want to take some additional time to learn what a 363 sale entails so that you’ll be well-prepared for what to expect as part of either the bankruptcy process for your business
Where does the term 363 sale come from, and what does it entail?
The name of this sale is a nod to the section of the U.S. Bankruptcy Code that references the liquidation of a company’s property payoff to their creditors. While it can happen in either a Chapter 7 or 11 case, it mostly happens in the case of the latter.
Your bankruptcy trustee is ultimately responsible for overseeing this process to ensure that your company repays its debts. They may deny the sale if they believe that it’s not justified, when they’re unhappy with sale prices or there are court judgments in play. The trustee’s denial of your sale could cause significant financial harm.
Learning more about the business bankruptcy process
Perhaps the best thing that you can do as a business preparing to file for bankruptcy is to take time to familiarize yourself with the ins and outs of the process. This information will prove invaluable to you as you look to gain some insight into how your bankruptcy will impact your company’s operations now and in the future.