April 27, 2019 Articles

Lessons from the General Motors Bankruptcy for Companies Purchasing Product Lines from Bankrupt Companies

Buyer, beware!

By Manish Borde

Section 363(f) of the Bankruptcy Code allows a sale to be “free and clear of any interest in” the property being sold, but it does not define the term “interest in.” Courts have held that a properly conducted bankruptcy sale conveys the assets free and clear of not only property interests but also “claims.” Courts have held that section 363(f) may be used to bar a variety of successor liability claims that relate to ownership of property.

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