Publications
Second Circuit Affirms Refusal to Approve Foreign Debtor’s Asset Sale
Pratt’s Journal of Bankruptcy Law
September 2017
“[A]ny sale of [a foreign] debtor[‘s] property [in the U.S.] outside of the ordinary course of business can be approved by the bankruptcy court only after notice, hearing, and a finding of good business reasons to permit the sale,” held the U.S. Court of Appeals for the Second Circuit in In re Fairfield Sentry Ltd. In an earlier decision, the Second Circuit had ordered the bankruptcy court, on remand, to apply Code § 363(b) to a foreign representative’s sale of a foreign debtor’s U.S. asset. In Sentry II, the Second Circuit affirmed the bankruptcy court’s disapproval of the asset sale, because the asset had dramatically increased in value before any court had approved the sale, calling it a “sound business reason” for disapproval. In this article, of counsel Michael Cook explains the decision, which is important to asset buyers in bankruptcy sales.
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