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David Bowsher & Gabe Quistorff share insights about Creative Uses & Pitfalls to Avoid for Section 363 Asset Sales
David Bowsher, partner, and Gabe Quistorff, attorney, both members of the firm’s Creditors Rights & Bankruptcy Practice, co-authored an article for the American Bankruptcy Institute’s ABI Journal, outlining creative uses and pitfalls to avoid for Section 363 asset sales.
The article titled, “I Can Use § 363 for That?!” was published in ABI Journal’s June 2023 issue.
David and Gabe share insights on the various uses of Section 363 of the U.S. Bankruptcy Code in Chapter 11 bankruptcy cases. For example, Section 363 allows for the sale of a debtor's property, and it is commonly associated with public auctions and sales of tangible assets. However, the article encourages debtor's counsel to consider a broader range of options when using Section 363, including private sales and sales of property free and clear of non-debtor interests.
Their article examines how Section 363 offers a debtor significant freedom in choosing how to conduct the sale of property. David and Gabe describe how the use of private sales under Section 363 can be quicker and cheaper than public auctions, noting they are subject to bankruptcy court approval and come with certain risks.
Additionally, Section 363 allows debtors to sell property free and clear of various non-debtor interests, such as liens, as long as certain conditions are met.
David and Gabe also highlight an alternative to Section 363 sales, discussing the advantages of sales through a confirmed plan of reorganization under Section 1129, which can provide more flexibility and allow for the stripping of certain claims and defenses.
The article emphasizes how understanding the different uses and implications of Section 363 can help debtors and potential purchasers achieve their objectives in Chapter 11 bankruptcy cases.
David advises on oil and gas acquisitions and financing, mergers and acquisitions, and bankruptcy matters. His oil and gas practice centers around exploration and production companies with operations in Texas and elsewhere. The focus of his mergers and acquisitions practice is middle market deals, in which he has represented both buyers and sellers. David has deep background in all aspects of corporate restructuring, with particular experience in §363 asset sales in bankruptcy cases. Additionally, David's extensive corporate and transactional experience includes securities offerings, financing transactions and capital raising efforts.
Gabe focuses his practice on consumer finance litigation and bankruptcy issues. Gabe defends businesses against individual and class action lawsuits under the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA) and the Telephone Consumer Protection Act (TCPA). In his bankruptcy practice, Gabe focuses on creditor representation in both consumer and commercial bankruptcies, and has experience representing buyers in § 363 asset sales. Gabe also has experience in workouts and collections litigation.