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Sale of Property

Local Rule Number: 
Rule 6004-1
6000 Series

(A)       Motion and Service.  A motion seeking authority to sell property of the estate pursuant to 11 U.S.C. §363, shall comply with Bankruptcy Rules 2002, 6003, and 6004, and this rule.  Unless otherwise ordered by the court, notice of any use, sale, or lease of property shall be served on the debtor, the debtor’s attorney, the trustee, the trustee’s attorney, the U.S. Trustee, any party holding an interest in the property, all parties who have filed notices of appearance or requests for copies of notices, and all creditors.  In a chapter 11 case, the notice need not be served on any creditors except those who are members of any creditors’ committee formed under 11 U.S.C. §1102, or when applicable, those creditors pursuant to Local Rule 2002-1(H); provided, however, that when the proposed use, sale, or lease is of substantially all the property of the estate notice must also be served on all creditors.

 

[Comment: See also Bankruptcy Rules 2002(h) and 2002(i) and Local Rule 2002-1(F).]

 

(B)       Contents of Motion.  The motion shall consist of, or (if the motion is more than five pages in length) begin with, a concise statement of the relief requested, not to exceed five pages, that lists or summarizes, and sets out the location within the relevant documents of all material provisions, including:

 

(1)        the identity of the purchaser, if any, and whether the purchaser is an insider of the debtor;

 

(2)        the terms of the sale including the price, any warranties, closing date and any closing conditions;

 

(3)        whether the sale is subject to higher and better offers and, if so, the auction terms including:

 

(a)        proposed auction date;

 

(b)       minimum incremental bids;

 

(c)        initial overbid amount; and

 

(d)       the proposed last date for submitting competing bids.

 

(4)        the requirements of any competing bidder including:

 

(a)        minimum deposit;

 

(b)       any documentation requirements; and

 

(c)        any other qualifying conditions.

 

(5)        any purchaser protections not otherwise described, including, but not limited to:

 

(a)        any proposed break up fee;

 

(b)       any matching rights.

 

(6)        a statement regarding whether the debtor has a policy of prohibiting the transfer of personally identifiable information, whether the sale would be inconsistent with that policy, and whether the debtor believes a consumer privacy ombudsman is required under §332 of the Bankruptcy Code;

 

(7)        the identity of all known potential lienholders or interest holders including the nature and extent of their liens or interests and whether such liens or interests are disputed; and

 

(8)        a statement setting forth the need for any critical path or accelerated hearings, requesting the dates for any necessary hearings or events to be scheduled by the court.

 

(C)       Motions Seeking Relief Under 11 U.S.C. §363(h).  Any motion to seek relief under 11 U.S.C. §363(h), shall also comply with the provisions of Bankruptcy Rule 7001.

 

(D)       Use, Sale, or Lease on Negative Notice.  Unless otherwise ordered by the court, notice of a proposed use, sale or lease of property other than the proposed use of cash collateral, not in the ordinary course of business, pursuant to Bankruptcy Rule 6004(a) and 11 U.S.C. §363(b), a motion seeking relief under 11 U.S.C. §§363(f), (g) or (h), or a motion seeking relief affecting a pro se debtor may use the following negative notice procedures:

 

(1)        Any motion using these procedures shall include above the preamble and below the title of the notice the following bulletin in bold print:

 

Pursuant to Bankruptcy Rule 6004 and Local Rule 6004-1(D), this proposed use, sale or lease will be deemed approved without necessity of a hearing or order if no objection to the use, sale or lease is filed and served within 21 days from the date of service of this [notice][motion].

 

An interested party’s failure to timely file an objection shall be deemed a consent to the use, sale, or lease.

 

(2)        If no objection is filed or served, the proponent shall file a report pursuant to Bankruptcy Rule 6004(f) certifying the lack of any response to the notice and the effectuation of the use, sale, or lease, or if the proposal is by motion the proponent shall submit a proposed order pursuant to Local Rule 5005-1(G), including the following language in the order’s preamble:

 

“and the movant by submitting this form of order having represented that the motion was served on all parties required by Bankruptcy Rule 2002 or Local Rule 2002-1(H) or (J), that the 21-day response time provided by Local Rule 6004-1(D) has expired, that no one has filed, or served on the movant, a response to the motion, and that [either] the form of order was attached as an exhibit to the motion [or] the relief to be granted in this order is the identical relief requested in the motion,”

 

(3)         If an objection to the proposed use, sale, or lease of property is received or filed, the proponent of the use, sale, or lease of property shall promptly submit the Local Form “Certificate of Contested Matter”.  If a certificate of contested matter is filed, the court will schedule a hearing in accordance with the procedures contained in Local Rule 9073-1(A).  The “Notice of Hearing” shall be served by movant in accordance with the procedures contained in Local Rule 9073-1(B).

 

[Comment: This procedure may be used for notices of a use, sale or lease of property under Bankruptcy Rule 6004(a) and 11 U.S.C. §363(b).  Certain notices of sale do not require orders to effectuate the sale if no objection is filed.  Nevertheless, this rule allows the proponent
to submit an order where an order approving the sale is requested by the proponent for title or reporting purposes.]

 

☞2015 Amendment:    Amended to eliminate requirements to file a certificate of no response.