Law.com Subscribers SAVE 30%
Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.
Can the Sequel Make More Money Than the Original?
Talk about a balance of power. Debtors want to sell assets for maximum value. Bidders want to buy cheaply and with finality. While debtors want flexible auctions, if the rules are open-ended, bidders will stay home. So what happens to bidder confidence when, after the auction concludes, but before the sale is approved, a late bidder offers more money? Bankruptcy courts must weigh the potential benefits to the estate against the reasonable expectations of the auction participants and the impact of accepting a late bid on the integrity of bankruptcy auctions. Recently, the Seventh Circuit examined this tension in Corporate Assets, Inc. v. Paloian, 368 F.3d 761 (7th Cir. 2004) (Paloian) [as analysed in last month's issue].
Procedural Options
In general, debtors have several procedural options in selling assets outside the ordinary course of business, with the common course being a court-approved auction process. Such asset sales are generally divided into two phases: Phase I, bid solicitation and auction, followed by Phase II, the sale hearing to approve the results of the auction (Section 363(b) of the Bankruptcy Code requires that the bankruptcy court approve of the sale of a debtor's assets outside the ordinary course of the debtor's business). Entering Phase I, a debtor may often already have a form of agreement with a “stalking horse” bidder that, inter alia, sets a minimum price for the assets in question. At the auction, other parties are invited to bid against the “stalking horse,” utilizing the same form of agreement. But other times a debtor may have no bidder lined up, and proceeds “naked” into Phase I. Either way, debtors generally seek court approval of auction procedures, which can establish who will be considered qualified to bid on the subject assets, the form of the bids, and actual procedures for the auction (such as minimum overbid requirements and the like). (Depending on the flexibility and rules of the subject bankruptcy court and/or judge, debtors seek approval of such procedures either before or [retroactively] after the auction. Obtaining pre-approval of the bankruptcy court can, of course, provide the debtor and the bidders with more of a measure of stability and certainty in respect of the process.)
This premium content is locked for Entertainment Law & Finance subscribers only
ENJOY UNLIMITED ACCESS TO THE SINGLE SOURCE OF OBJECTIVE LEGAL ANALYSIS, PRACTICAL INSIGHTS, AND NEWS IN ENTERTAINMENT LAW.
- Stay current on the latest information, rulings, regulations, and trends
- Includes practical, must-have information on copyrights, royalties, AI, and more
- Tap into expert guidance from top entertainment lawyers and experts
Already a have an account? Sign In Now Log In Now
For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473
Major Differences In UK, U.S. Copyright Laws
This article highlights how copyright law in the United Kingdom differs from U.S. copyright law, and points out differences that may be crucial to entertainment and media businesses familiar with U.S law that are interested in operating in the United Kingdom or under UK law. The article also briefly addresses contrasts in UK and U.S. trademark law.
The Article 8 Opt In
The Article 8 opt-in election adds an additional layer of complexity to the already labyrinthine rules governing perfection of security interests under the UCC. A lender that is unaware of the nuances created by the opt in (may find its security interest vulnerable to being primed by another party that has taken steps to perfect in a superior manner under the circumstances.
Strategy vs. Tactics: Two Sides of a Difficult Coin
With each successive large-scale cyber attack, it is slowly becoming clear that ransomware attacks are targeting the critical infrastructure of the most powerful country on the planet. Understanding the strategy, and tactics of our opponents, as well as the strategy and the tactics we implement as a response are vital to victory.
Legal Possession: What Does It Mean?
Possession of real property is a matter of physical fact. Having the right or legal entitlement to possession is not "possession," possession is "the fact of having or holding property in one's power." That power means having physical dominion and control over the property.
The Anti-Assignment Override Provisions
UCC Sections 9406(d) and 9408(a) are one of the most powerful, yet least understood, sections of the Uniform Commercial Code. On their face, they appear to override anti-assignment provisions in agreements that would limit the grant of a security interest. But do these sections really work?