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Vol 13, Num 1 l March 2016

Technology and Intellectual Property

► In This Issue:

The Circuits Agree: Absolute Priority Rule Applies in Individual Chapter 11 Cases


Dale C. Schian
Schian Walker, PLC

The decision in Zachary v. California Bank & Trust brings the Ninth Circuit in line with the four other circuits that have concluded that BAPCPA did not abrogate the absolute priority rule in individual chapter 11 cases. The Ninth Circuit joined the Fourth, Fifth, Sixth and Tenth Circuits in adopting the “narrow view” to conclude that BAPCPA’s limitation on the absolute priority rule in individual cases[6] only applies to property added to the estate pursuant to § 1115 and not to § 541(a) property generally.

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Selling Other People’s Real Estate: § 363(h) Options for Trustees


Alexander M. Laughlin
Odin, Feldman & Pittleman, PC
Reston, Va.


Stephen Karbelk, CAI, AARE
Auction Markets, LLC;
& Ashburn, Va.
Ashburn, Va.

Under § 363 of the Bankruptcy Code and subject to bankruptcy court approval, chapter 7 trustees have the power to sell the entire interest in property that the debtor owns with nondebtor co-owners. This unique power to sell the debtor’s and nondebtor’s interests can only be exercised by a trustee in certain circumstances and when the trustee is able to satisfy all the requirements of § 363(h) of the Bankruptcy Code. When undertaking such a sale, trustees must be strategic in their approach in order to bring about a transaction that will result in a meaningful recovery to the bankruptcy estate. A sale of the nondebtor’s interest co-owned with the debtor is commenced by an adversary proceeding against the co-owner. The requirements necessary to obtain an order selling the property out from under the nondebtor co-owner under § 363(h) are set forth below.

Ability to Partition the Property

One of the requirements for a sale of property subject to the interests of a nondebtor co-owner is that “partition in kind … is impracticable.” The trustee needs to evaluate whether or not the property can be subdivided in a way that is not “impracticable” and will net the same proceeds for the estate as the sale of the entire property, while weighing all the risks and costs.

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Have You Registered for the Annual Spring Meeting?

2016 Annual Spring Meeting

Connect with the industry’s thought leaders at the 34th Annual Spring Meeting, featuring dynamic speakers, top education and unparalleled networking. This year’s event boasts streamlined CLE sessions, more networking opportunities than ever before, and ABI’s take on the famous Hollywood Squares game show, the inaugural “Bankruptcy Judge Squares: The Supreme Court Edition.”This year’s final night event will feature "Saturday Night Live" alum, talk show host, and political commentator Dennis Miller!

Click here to register now.

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