Local Rule 6004-1: SALE OF ESTATE PROPERTY

BANKRUPTCY LOCAL RULE 6004-1 SALE OF ESTATE PROPERTY

(a) Procedure. A motion for authority to sell free and clear of liens under 11 U.S.C. § 363(f) shall identify by name, immediately below the caption, the lienholders and other interest holders whose property rights are affected by the motion. The affected lienholders and other interest holders shall be served with a complete set of moving papers pursuant to FRBP 7004(b). The motion must include, immediately below the caption, the statement: "THIS MOTION AFFECTS THE PROPERTY RIGHTS OF . . ." with the name of each holder of a lien or other interest whose property rights are affected.

(b) Supporting Papers.

(1) Memorandum of Law. The motion must be supported by a memorandum of law explaining compliance with § 363(f).

(2) Declaration. The motion must be accompanied by admissible evidence supporting the factual basis for the motion and showing satisfaction of one or more conditions under § 363(f). The evidence must include a copy of a current title report, a current Uniform Commercial Code Form 3 Financing Statement, or other report on the status of the title to the real or personal property and identification of any security interests in the subject property.

(3) Notice. Unless the court orders otherwise, the moving party must obtain a hearing date and give notice to all creditors in accordance with BKLR 9013-1(e). The notice of the hearing must identify the name and address of each lienholder and any other party whose property rights are affected by the proposed sale, the basis for compliance with § 363(f), contain a description of the property, identification of the purchasing party, and the material terms of the sale (including any provision for overbidding at the hearing).

(c) Sales Subject to Liens. A party seeking to sell estate property subject to one or more liens which will not be discharged from the proceeds of the sale at closing must obtain an order approving the sale. Subdivision (d) of this rule applies to such a sale.

(d) Other Sales Outside the Ordinary Course of Business. If the subject property is not being sold free and clear of liens or other interests, or is being sold subject to one or more liens which will not be discharged from the sale proceeds at closing, the trustee or debtor in possession may obtain an order approving the sale by filing a notice of the proposed sale substantially conforming to the local form (Notice of Proposed Use, Sale, or Lease of Property [GUB 6004-1d]). The notice must be served on the debtor, any committee appointed in the case, the United States trustee, all creditors, and any parties with an interest in the property or directly affected by the proposed sale.

(e) Trustee's Sale of Property Under $2,500. When all of the nonexempt property of the estate has an aggregate gross value less than $2,500, the clerk may give a general notice of intent to sell such property other than in the ordinary course by including such notice in the notice of commencement of the case, the notice of need to file a proof of claim, or other such notice, without further notice or a hearing. An objection to this procedure must be filed not later than 21 days after the date of filing of such notice.

(f) Trustee's Sale of Personal Property on Leased Premises. A motion by a trustee or debtor in possession to sell personal property of the estate located on leased premises may be heard on 7 days' notice without an order shortening time.

(g) Special Provisions.

(1) Good Faith Finding. A party seeking approval of a sale or lease of property as being made in good faith under § 363(m) must make the specific allegation of good faith in a motion governed by this rule and provide supporting evidence.

(2) 14-Day Stay After Entry of Order. A party seeking a provision in the order approving sale which waives the stay provided for in FRBP 6004 (h) must include a specific request for this provision in the motion and notice.

(h) Form of Order. The order granting a motion to sell free and clear of liens shall specify each lienholder whose interest is to be affected by the order.

BKLR 6004-1 Related Local Forms: • Notice of Proposed Use, Sale, or Lease of Property [GUB 6004-1d])