§ 363

Cohen v. KB Mezzanine Fund II LP (In re SubMicron Sys. Corp.)

A creditors' committee in a bankruptcy case brought an adversary proceeding against appellee lenders challenging a sale under 11 U.S.C. § 363(b) of debtors' assets; appellant plan administrator was substituted for the committee. The district court withdrew the reference to the bankruptcy court and approved the sale. The administrator appealed.
Ruling: 
Asset sale approval was affirmed since the bankruptcy court did not err in characterizing the lenders'financing as debt rather than equity and since the lenders were allowed to credit bid the full face value of their claims against the debtor's estate.
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Kovacs v. Sargent (In re Sargent)

Plaintiff, a chapter 7 trustee, filed an action against defendants, the debtor, and a co-owner in a remainder interest in property, to obtain approval pursuant to 11 U.S.C. § 363(h) to sell the property on behalf of the bankruptcy estate. The trustee and the debtor filed cross-motions for summary judgment.
Ruling: 
Trustee as successor to the debtor's remainderman interest in property could not sell the property in which the debtor's mother had maintained a life estate interest.
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In re Allied Holdings Inc.

Debtors, who had filed voluntary petitions under chapter 11, filed a motion for approval of a key employee retention program ("KERP") pursuant to 11 U.S.C. § 363(b). The KERP was supported by the official committee of unsecured creditors and the debtors'postpetition lenders but opposed by a union committee and the U.S. trustee.
Ruling: 
Court provided that it would approve a key employee retention program with certain amendments to the program since the debtors had a sound business reason for proposing the program.
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Genova v. ESM Realty Trust (In re Stoll)

Plaintiff, the chapter 7 trustee, sued defendants, two trusts and three individuals, including debtor, who each held a one-third interest in the trusts. The trustee alleged two causes of action. The first cause of action was for turnover of property of the bankruptcy estate pursuant to 11 U.S.C. § 542. The second sought a sale of the trusts'property pursuant to 11 U.S.C. § 363(h). The parties filed a motion for summary judgment.
Ruling: 
Beneficiaries, including the debtor, were deemed joints tenants in common of the assets of a trust, and the trustee was permitted to sell the trust property to obtain the estate's interest in the trust.
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In re Toms Foods Inc.

The chapter 11 debtor in possession filed an expedited motion for authorization to schedule an auction for the sale of substantially all of the debtor's assets free and clear of all liens, claims, and interest. The motion also requested approval of certain bidding procedures which would govern the auction.
Ruling: 
Expedited motion authorizing scheduling of auction of most of debtor's assets was granted since sale would later have to be reviewed and approved by the court.
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