SALE OF ENCUMBERED ESTATE PROPERTY - CHAPTER 11

ONLY A motion to sell property of the estate that is encumbered by a lien, claim, or interest in a Chapter 11 proceeding must include all of the information required in Local Bankruptcy Rule 6004-1(a)-(i) and a description of all liens, claims, or other interests in or against the property (including the nature of the lien, claim, or interest and the balance owed to the holder thereof). In addition, if the motion is longer than ten (10) pages the motion must highlight the following material terms in a separate section titled “Provisions to be Highlighted”: (a) Sale to Insider. If the proposed sale is to an insider, as defined in 11 U.S.C. § 101(31), the motion must (1) identify the insider, (2) describe the insider’s relationship to the Ver. 25.01 (December 1, 2025) 47 debtor, and (3) set forth any measures taken to ensure the fairness of the sale process and the proposed transaction.

(b) Agreements with Management. If a proposed buyer has discussed or entered into any agreements with management or key employees regarding compensation or future employment, the motion must disclose (1) the material terms of any such agreements, and (2) what measures have been taken to ensure the fairness of the sale and the proposed transaction in light of any such agreements. (c) Releases. The motion must highlight any provisions pursuant to which an entity is being released or claims against any entity are being waived or otherwise satisfied.

(d) Private Sale/No Competitive Bidding. The motion must disclose whether an auction is contemplated and highlight any provision in which the trustee has agreed not to solicit competing offers for the property subject to the motion or to otherwise limit shopping of the property. (e) Closing and Other Deadlines. The motion must highlight any deadlines for the closing of the proposed sale or deadlines that are conditions to closing the proposed transaction.

(f) Good Faith Deposit. The motion must highlight whether the proposed purchaser has submitted or will be required to submit a good faith deposit and, if so, the conditions under which such deposit may be forfeited. (g) Interim Arrangements with Proposed Buyer. The motion must highlight any provision pursuant to which a trustee is entering into any interim agreements or arrangements with the proposed purchaser, such as interim management arrangements (which, if out of the ordinary course, also must be subject to notice and hearing under 11 U.S.C. § 363(b and the terms of such agreements.

Ver. 25.01 (December 1, 2025) 48 (h) Use of Proceeds. The motion must highlight any provision pursuant to which a trustee proposes to release sale proceeds on or after the closing without further Court order or to provide for a definitive allocation of sale proceeds between or among various sellers or collateral. (i) Record Retention.

If the trustee proposes to sell substantially all of the debtor’s assets, the motion must highlight whether the trustee will retain, or have reasonable access to, the debtor’s books and records to enable the trustee to administer the bankruptcy case. (j) Sale of Avoidance Actions. The motion must highlight any provision pursuant to which the trustee seeks to sell or otherwise limit the rights to pursue avoidance claims under Chapter 5 of the Bankruptcy Code. (k) Requested Findings as to Successor Liability.

The motion must highlight any provision limiting the proposed purchaser’s successor liability. (l) Sale Free and Clear of Unexpired Leases. The motion must highlight any provision by which the trustee seeks to sell property free and clear of a possessory leasehold interest, license, or other right. (m) Credit Bid.

The motion must highlight any provision by which the trustee seeks to allow, disallow, or affect in any manner credit bidding pursuant to 11 U.S.C. § 363(k). (n) Relief from Bankruptcy Rule 6004(h). The motion must highlight any provision whereby the trustee seeks relief from the fourteen (14) day stay imposed by Bankruptcy Rule 6004(h).