Trustee Articulated a Sound Business Justification For Selling the Properties Outside of the Ordinary Course of Business under §363
November 30, 2021, Eastern District of Louisiana – The case refers to a trustee’s settlement/sale motion under Bankruptcy Rule 9019 and § 363 of the Bankruptcy Code. The Trustee requests the Court to allow him to settle a secured claim that a debtor holds due to its lien on all of the debtor’s properties and rents and sell those properties free and clear of all interests.
The Court found that the Trustee articulated a sound business justification for selling the properties outside of the ordinary course of business at a private auction under § 363 because the current long-term insider leases could not service the debt to the creditor that held a first-position secured lien on all of the debtor’s assets. The Court further held that the estate had no unsecured creditors but continued to accrue significant administrative expenses. Additionally, the Court concluded that no feasible refinancing options for the debt had been presented to the Trustee last year. The Court ruled that the Trustee could sell the properties free and clear of all encumbrances and interests under § 363(f)(1), (4) because it adopted the Spanish Peaks interpretation of the plain text of § 363(f)(1). The Court approved the settlement and granted the motion for the sale of real property.
In re Royal Alice Props., LLC, No. 19-12337, 2021 Bankr. LEXIS 3262 (Bankr. E.D. La. Nov. 30, 2021)