Improving Bankruptcy Sales by Raising the Bar: Imposing a Preliminary Injunction Standard for Objections to Section 363 Sales
40 Pages Posted: 11 Jan 2012 Last revised: 25 Jul 2019
Date Written: February 28, 2012
In response to persistent claims that objections to bankruptcy sales cause wasteful, unnecessary and inappropriate delays, this article concludes that bankruptcy courts should adopt a preliminary injunction standard for evaluating such objections. Employing a strict, clear and uniform standard would reduce the opportunity for strategic objectors to engage in dilatory measures, but should not bias creditors with “legitimate” objections. Applying a preliminary injunction standard would help to ensure that creditors receive an appropriate amount of procedural protection for their legitimate claims, while at the same time preventing parties-in-interest from engaging in rent-seeking behavior by making strategic objections to bankruptcy sales.
Keywords: bankruptcy, sales, asset sales, bankruptcy sales, preliminary injunction, injunction, delay, 363, 363(b), 363(f), 7001, 7001(2)
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