363 Auction

What the stalking horse (see Stalking Horse) hopes a 363 sale will not become. What essentially every other constituency in the case (except perhaps the debtor’s management who may have negotiated sweetheart employment agreements with the stalking horse) will become.

Although not mandated by the Code or Bankruptcy Rules, it has become standard in Chapter 11 to subject every sale agreement to higher and better offers to be solicited from other potential buyers, culminating in an auction held in open court or in the offices of debtor’s counsel.

Bankruptcy Code § 363. See also 363 Sale, Bid Protections, Break-Up Fee, Credit Bid Rights, Sale Free and Clear, Stalking Horse, Sub Rosa Plan, Topping Fee.

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