Going-out-of-business Sales: State and Local Governments Fight
for Regulation, Rights of Landlords During Sales, Maximizing Value

In connection with retail chapter 11 cases, debtors often elect to close unproductive stores. To maximize the value of the assets related to such stores, debtors often seek to conduct special-event sales. A panel at the 2004 Annual Spring Meeting examined the right of debtors to conduct such sales without complying strictly with state and local laws. The panel also addressed the dynamics of such sales as they relate to consumers, employees and real estate landlords.

Cory Lipoff—Moderator
Hilco Merchant Resources LLC; Northbrook, Ill.

Harold J. Bordwin
Keen Consultants LLC; Great Neck, N.Y.

Karen Cordry
National Association of Attorneys General; Washington, D.C.

Steven E. Fox
Traub, Bonacquist & Fox LLP; New York
To read the materials, click here

Committee Discusses Current Developments at 2004 ASM

The Asset Sales Committee presented a program on "Current Developments in Asset Sales." Program moderators were Richard Tilton and David Peress, committee co-chairs. Speakers included Pauline Morgan (Young Conway Stargatt & Taylor LLP; Wilmington, Del.) and Chester Salomon (Salomon Green & Ostrow PC; New York). Pauline discussed recent Delaware cases involving stalking-horse bidders and break-up fees. Audience members Bob Sattin and Jeff Sabin, among others, raised interesting questions about how break-up fees are treated when the stalking-horse is not the high bidder and how bankruptcy judges should evaluate or characterize the break-up fee when determining which competing offer is the highest and best offer. Chester Salomon discussed an important case out of the Southern District of New York dealing with the allocation of sale proceeds where the debtor/seller is actually more than one legal entity and creditors are disputing the debtors’ business judgment in allocating the sale proceeds between different estates. The panel also discussed recent cases on appeals of sale orders, finding no major developments from the general rule that absent a stay it is unlikely that a sale order will be reversed on appeal. Pauline and Chester did review some narrow exceptions to the general rule. Written materials were prepared by Richard Tilton; if you would like a copy of the materials, please e-mail him.

Committee Seeks Articles Submissions, Panelists

The committee solicits all ABI members to submit short articles (500-1,000 words) for publication in the committee’s e-newsletter. If you would like to submit an article, please contact David Peress or Rick Tilton. The committee is also looking for members who would like to participate in panel presentations. We encourage “young” members to contact us and to participate in committee activities.