Local Rule RULE 6004-1: SALE OF ESTATE PROPERTY — Bankr. D. Mass.

RULE 6004-1. SALE OF ESTATE PROPERTY

(a) Motion Required Whenever the Bankruptcy Code or the Federal Rules of Bankruptcy Procedure require an estate representative to seek leave of the Court to sell property of the estate, by private or public sale, the request shall be made by motion. The motion shall include as exhibits a proposed form of order and, in the case of a private sale, the applicable sale agreement.

(b) Service Required The motion seeking authority to sell shall be served on:

(1) the debtor and debtor's counselthe debtor's attorney, if any;

(2) the United States trustee;

(3) any known creditor claimingentity with an interest in the property of record, including a lien or security interest in said property and any counsel to that creditor;

(4) (4) any other known entity asserting an interest in the property;

(5) any known attorney for an entity in subsections (3) or (4);

(6) all attorneys and parties who have filed appearancesappeared in the case or requested notice;

(5) any attorneys(7) the attorney for any approved Creditors' Committee or Equity Committeeelected or appointed committee;

(8) all creditors; and

(6) (9) in a chapter 9 or chapter 11, if no Creditors' committee has been elected or appointed, the 20 largest unsecured creditors. included on the list of creditors filed under Fed. R. Bankr. P. 1007(d).

(1) The motion for authority to sell by way of private sale must state:

(A) whether the sale is to be free and clear of liens or interests;

(B) the identity of the holder of any lien or interest in the property to be sold;

(D) whether approval is sought for any proposed distribution of proceeds;

(E) why a private sale, rather than a public sale, is in the estate's best interest; and

(F) if all or substantially all of a chapter 11 debtor's assets are to be sold, (i) why the sale is proposed under 11 U.S.C. § 363 rather than through a chapter 11 plan and (ii) a practical and abbreviated equivalent of the adequate information required in a disclosure statement to a chapter 11 plan.

(2) Prior Approval

(A) The movant:

(A) moving party may seek prior approval of any term of the proposed sale;

(B) The moving party must obtain prior approval from the Court of any terms for the proposed sale protecting the initial proposed purchaser, including the amount of a break-up fee or the minimum increase required for a higher offer, unless

(i) the proposed break-up fee does not exceed the lesser of 5% of the proposed original purchase price or $50,000 and is subject to final Court approval upon application by the bidder; and

(ii) the minimum increase required for a higher offer does not exceed 5% of the proposed original purchase price.

(3) Notice of Sale

(A) The motion for authority to sell by private sale must include a proposed notice of sale (attached as an exhibit).

(B) Subject to the requirements of Fed. R. Bankr. P. 2002, Fed. andR. Bankr. P. 6004 and any other applicable Federal Rules of Bankruptcy Procedure, these or the Local Rules or any Standing Order of this Court, a notice of proposed private sale of property shall conform substantially to MLBR Official Local Form 2A suited to the particular circumstances of the case.

(C) The proposed notice of Sale shall contain a blank space for the deadline for filing objections and higher offers, as well as blank spaces for the date and time of the hearing on theproposed private sale.

(D) The proposed Notice of Saleproperty must include:

(i) the name and address of the initial offeror;

(ii) the consideration to be paid for the purchase;

(iii) the time and place of the proposed sale;

(iv) the terms and conditions of the proposed sale;

(v) a blank space for the deadline for filing objections and submitting higher offers and/or objections to the proposed sale to be set by the Court;

(vi) blank spaces for the date and time of the hearing to be set by the Court;

(vii) a general description of the property to be sold;

(viii) an itemized list of the asset or assets to be sold;

(ix) thedisclosure of any relationship, if any, of the initial offeror andwith the seller;

(x) a statement as to whether the sale shall be free and clear of liens or interests pursuant to 11 U.S.C. § 363(f);

(xi) a statement noting that the Court may modify the method of sale set forth in the notice at or prior to the hearing on the proposed sale;

(xii) a statement that any objection, higher offer, or request for hearing must be filed and served within the time established by the Court, which time shall be conspicuously stated in the notice;

(xiii) the following language: "The Court may take evidence at any hearing on approval of the salemotion to resolve issues of fact";";";

(xiv) if a proposed sale or lease ofincludes personally identifiable information under 11 U.S.C. § 363(b)(1)(A) or (B), a statement as to whether the sale is consistent with a policy of the debtor prohibiting the transfer of suchthe information; required in MLBR 6004-1(f); and

(xv) a statement that a copy of the motion and any sales agreement will be provided by the moving party to any interested party upon request and at no cost.

(4) Procedure upon Receipt by the Clerk of the Motion to Sell Upon receipt of the motion for authority to sell by way of private sale and the notice of proposed Noticeprivate sale of Saleproperty, the Clerk shall assign a deadline date for filing objections, making and submitting higher offers and scheduleset a hearing date and time. The estate representative shall then serve the motion for authority to sell and by way of private sale as required by subsection (b) of this Rule and the completed notice of proposed private sale of property as required by subsection (c)(5) of this Rule.

(5) (5) Service of the Completed Notice

(A) Unless the Court orders otherwise, the completed notice of Saleproposed private sale of property shall be served upon all creditors in accordance with Fed. R. Bankr. P. 2002 and Fed. R. Bankr. P. 6004. A copy of the completed notice should also be served on parties regarded by the estate representative as potential purchasers, including, if appropriate, dealers in property similar to that proposed to be sold and the debtor's competitors. 6004 and MLBR 2002-1 and 2002-5. A copy of the completed notice should also be served on parties regarded by the estate representative as potential purchasers, including, if appropriate, dealers in property similar to that proposed to be sold and the debtor's competitors. Unless the Court orders otherwise, the completed notice shall be served no lessfewer than twenty one (21) days (plus such additional time as may be provided in Fed. R. Bankr. P. 9006(f)) prior to the deadline for filing objections or submitting higher offers.

(B) The motion to sell need not be served on all parties until the Clerk has provided the information necessary to complete the Notice of Sale.

(C) (B) The estate representative shall file a certificate of service no later than seven (7) days following service of the completed notice of sale unless a different deadline is set by the Court.

(6) Court Approval of Sale

(A) If there are no objections timely filed or higher offers timely filed with the Court by the deadlinesubmitted, the Court may approve the sale without holding the scheduled hearing.

(B) Within seven (7) days of receipt of a written A party may request by the debtor, estate representative or other party in interest, of the Clerk shall issue a certificate of no objections concerning the sale of property of the estate.

(C) The moving party must submit a proposed order approving the sale within seven (7) days after the Court's approval of the sale unless a different deadline is set by the Court.

(d) Public Auction Procedure

(1) The motion

(A) shall for authority to sell by way of public sale must state:

(A) whether the sale is to be free and clear of liens or interests;

(B) the identity of the holder of any lien or interest in the property to be sold;

(D) whether approval is sought for any proposed distribution of proceeds;

(E) why a public sale, rather than a private, sale is requested.in the estate's best interest; and

(B) (F) if all or substantially all a chapter 11 debtor's assets are to be sold, (i) why the sale is proposed under 11 U.S.C. § 363 rather than through a chapter 11 plan and (ii) a practical and abbreviated equivalent of the adequate information required in a disclosure statement to a chapter 11 plan.

(2) Notice of Sale

(A) The motion for authority to sell by public sale must include a proposed notice of Public Sale, which shall:sale (attached as an exhibit).

(i) be(B) Subject to the requirements of Fed. R. Bankr. P. 2002 and 6004 and any other applicable Federal Rule of Bankruptcy Procedure, Local Rule or any Standing Order of this Court, a notice of proposed public sale of property shall conform substantially similar to MLBR Official Local Form 2B; and .

(ii) shall contain (C) The notice of proposed public sale of property must include:

(i) the time and place of the proposed sale, if known;

(ii) the terms and conditions of the proposed sale;

(iii) a blank space for the deadline for filing objections, as well as to the proposed sale to be set by the Court;

(iv) blank spaces for the date and time of the hearing onto be set by the sale. Court;

(2) (v) a general description of the property to be sold;

(vi) an itemized list of the asset or assets to be sold;

(vii) a statement as to whether the sale shall be free and clear of liens or interests pursuant to 11 U.S.C. § 363(f);

(viii) a statement noting that the Court may modify the method of sale set forth in the notice at or prior to the hearing on the proposed sale;

(ix) a statement that any objection, or request for hearing must be filed and served within the time established by the Court, which time shall be conspicuously stated in the notice;

(x) the following language: "The Court may take evidence at any hearing on approval of the motion to resolve issues of fact"; and

(xi) if a proposed sale or lease includes personally identifiable information under 11 U.S.C. § 363(b)(1)(A) or (B), the information required in MLBR 6004-1(f).

(3) Procedure upon Receipt by the Clerk of the Motion to Sell Upon receipt of the proposed noticemotion for authority to sell by way of public sale and the notice of proposed public sale of property, the Clerk shall assign a deadline for filing objections and set a hearing date and time.

(3) Service of the Completed Notice The estate representative shall then serve the motion for authority to sell by way of public sale and the completed notice in the manner provided in subsection (c)(5) of this Rule or other order of the Court and shall file a certificate of service within seven (7) days of service, unless a different deadline is set by the Courtof proposed public sale of property as required by this Rule.

(4) Subsequent ConfirmationService of the Completed Notice

(A) Unless the Court orders otherwise, the completed notice of proposed public sale of property shall be served upon all creditors in accordance with Fed. R. Bankr. P. 2002 and 6004. A copy of the completed notice should also be served on parties regarded by the estate representative as potential purchasers, including, if appropriate, dealers in property similar to that proposed to be sold and the debtor's competitors. Confirmation byUnless the Court oforders otherwise, the auction is not required unless completed notice shall be served no fewer than 21 days (plus such confirmation is a condition of the Court's approval. Within seven (7) days of receipt of a written request by additional time as may be provided in Fed. R. Bankr. P. 9006(f)) prior to the deadline for filing objections or submitting higher offers.

(B) The estate representative, the debtor, or other shall file a certificate of service no later than seven (7) days following service of the completed notice of sale unless a different deadline is set by the Court.

(5) Court Approval of Sale

(A) If there are no objections timely filed with the Court, the Court may approve the sale without holding the scheduled hearing.

(B) A party in interest,may request of the Clerk shall issue a certificate of no objections concerning the public auction sale of property of the estate.

(6) Restrictions

(A) Any auction advertisement placed by an auctioneer or estate representative shall conspicuously state the bankruptcy case name and number.

(B) An auctioneer shall not introduce non-bankruptcy estate items at an auction without the Court's prior approval. However, subject to the Court's prior approval and the appropriate identification of each item of bankruptcy estate property to be sold, property from a bankruptcy estate may be consolidated with and sold at a regularly scheduled auction sale of other non-estate goods.

(C) Neither an auctioneer employed by an estate representative nor any agent of the auctioneer shall bid on property of the estate.

(D) No buyer's premium shall be charged in a sale under this Rule.

(E(D) Failure to comply with this subsection may result in denial of all compensation and/or the issuance of sanctions.

(6) 7) Qualification and Duties of Auctioneer

(A) An auctioneer shall not be authorized to conduct a public auction of property of an estate without first obtaining the Court's specific prior approval of the auctioneer's employment.

(B) The auctioneer must file with the Court a bond in an amount fixed by the United States trustee, and furnish the United States trustee with a copy of that bond. The bond shall be conditioned on the faithful performance of the auctioneer's duties and the auctioneer's accounting for all money and property of the estate that comes into his or her possession.

(C) To avoid the necessity of filing separate bonds for smaller auction sales, the auctioneer may file with the Court a blanket bond similarly conditioned in a base amount fixed from time to time by the United States trustee to cover various cases in which the auctioneer may act. The auctioneer shall also provide the United States trustee with a copy of the blanket bond.

(D) If at any time the value of goods of various estates in the auctioneer's custody exceeds the amount of the blanket bond, the auctioneer shall obtain a separate bond or bonds so that the full amount of all goods of various bankruptcy estates in the auctioneer's custody is covered.

(E) As a condition of the employment of an auctioneer in any bankruptcy estate, the auctioneer shall file an affidavit under the penalty of perjury that states:

(i) all goods of bankruptcy estates in the auctioneer's custody are fully covered at all times by separate bonds or blanket bonds or both;

(ii) his or herthe auctioneer's qualifications;

(iii) where the auctioneer is licensed;

(iv) whether the auctioneer is in good standing in all jurisdictions in which he or shethe auctioneer is licensed; and

(v) whether the auctioneer is subject to any disciplinary proceedings or has been subject to any disciplinary proceedings inwithin the five years preceding the filing of the applicationfive (5) years.

(7) (8) Attendance at Auction Sale Except for those auctions that occur via an Internet Auction Mechanism, the estate representative or a representative of the estate representative must be present at theany live auction sale.

(89) Auctioneer's Compensation and Expenses

(A) The auctioneer, or the estate representative on behalf of the auctioneer, shall file and serve an application for compensation and reimbursement of expenses setting forth the amount requested, services rendered, time spent, and actual expenses incurred as required by Fed. R. Bankr. P. 2016(a). The application shall disclose the amount of any buyer's premium charged in connection with specific items of property sold (the "Buyer's Premium").R. Bankr. P. 2016(a). The auctioneer may be paid from the proceeds of the auction immediately upon approval of its application and prior to closing of the case.

(B) Auctions of Personal Property Unless otherwise ordered by the Court, with respect to auctions of personal property, the auctioneer's compensation shall not exceed the following percentages of gross proceeds:

(i) 10% of the first one hundred thousand dollars ($100$250,000) or part thereof;

(ii) 47% of the next four hundred thousand dollars ($400$250,000) or part thereof; and

(iii) 3 5% of the balance.

(iv) "Gross proceeds" shall include any Buyer's Premium.

(C) Real Estate Auctions Unless otherwise ordered by the Court, with respect to sales of real property, the auctioneer's compensation shall not exceed the greater of:

(i) (i) 10% of the first fifty thousand dollars ($$50,000) realized in excess of the amount of encumbrances, plus 2.5% of the balance of the equity; or

(ii) (ii) $500.00.

(D) (D) Auction Expenses With prior Court approval, the auctioneer shall be reimbursed for actual and necessary expenses incurred in connection with an auction, including labor, advertising and, credit card processing fees if, and any fee associated with an Internet Auction Mechanism. The auctioneer has obtained prior approvalmay charge or otherwise recoup from the winning bidder any credit card processing fees incurred by the Court for all such expensesauctioneer in connection with the winning bidder's purchase of assets. With respect to any auction that generates less than $20,000 in sale proceeds, reimbursement for labor costs shall be limited to $2,000 unless otherwise ordered by the Court. Following the auction, an auctioneer may seek reimbursement of unanticipated expenses incurred in connection with conducting the auction provided that such costs were reasonable and necessary to the sale and are supported by receipts or other documentation. Except as set forth in this Rule or as ordered by the Court, the auctioneer shall not be reimbursed for any overhead expense associated with the auction.

(e) Internet Auction Mechanisms

(1) With prior Court approval, after appropriate notice as required by Fed. R. Bankr. P. 2002(a), the estate representative, or an auctioneer or other Professional authorized by the Court to sell estate property, may sell any asset or assets of the estate by public auction through the use of an automated Internet auction, listing or brokerage mechanism ("Internet Auction Mechanism")..

(2) The Motion

(A) In any motion requesting such approval, including in a motion for approval of the sale or retention of an auctioneer, the estate representative must:

(i) Identify the name and uniform resource locators (URL) of the proposed Internet Auction Mechanism;

(ii) State why the estate representative believesSummarize the services that use of the Internet Auction Mechanism iswill provide in connection with the best interestspublic auction, provide the URL to the Internet Auction Mechanism's terms and conditions of use, or attach copies of the estatesuch terms and conditions, and

(1) Summarize what obligations the estate representative will incur by using the Internet Auction Mechanism; and

(2) State whether and to what extent such terms and conditions limit the Internet Auction Mechanism's provider from liability in connection with the auction;

(iii) Disclose whether the estate representative has or any party in interest is known to have any connections with the proposed Internet Auction Mechanism or any expected bidder;

(iv) Disclose all fees associated with use of the Internet Auction Mechanism, and identify if the bidders or estate shall be responsible for paying such fees;

(v) Disclose whether use of the Internet Auction Mechanism is subject to rules, policies, procedures or terms or conditions and, if so:

(1) provide either a copy thereof or the URL at which they can be examined; and

(2) summarize any such rules, policies, procedures or terms or conditions that are likely to result in any restrictions on bidding for the asset(s) proposed to be sold or limitations on the estate representative in offering asset(s) for sale with full or partial reserve or otherwise controlling the determination to sell each asset;

(vi(v) Identify the mechanism for payment to the estate; and

(vii) Represent that, to the best knowledge of the estate representative, the Internet Auction Mechanism will not provide auction services or any other services beyond access to its automated on line services and related customer support; and

(viii) Request authority to:

(vii) Request authority to:

(1) comply with any rules, policies, procedures, or terms, or conditions of the Internet Auction Mechanism disclosed in the motion and enter into any required agreements in support thereof;

(2) consummate such sale(s);; and

(3) pay any and all fees associated with use of the Internet Auction Mechanism, each without further order of the Court.

(3) Nothing in this Rule shall limit applicability of the requirements of Local Rule 6004-1(b) with respect to any auctioneer hired by an estate representative to provide services beyond access to an Internet Auction Mechanism.

(4(3) Unless the Court orders otherwise, a listing placed on an Internet Auction Mechanism shall state the bankruptcy case name and number and that the sale procedure has been approved by the United States Bankruptcy Court for the District of Massachusetts.

(f) Sales of Personally Identifiable Information

(1) In the event thatIf an estate representative shall movefiles a motion to sell personally identifiable information, as defined in 11 U.S.C. § 101(41A), the motion and any notice of sale thereon shall, in addition to thosethe other requirements set forth in Paragraphs (a) and (b) of this Rule, conspicuously describe the type(s) of personal identifiable information which are proposed to be sold (without disclosing the content of such information), why the sale of such information is advantageous or necessary, and what policies of the debtor, private agreements, federal laws and/or state laws purport to restrict the sale or use of such information.

(2) Upon the filing of a motion under subparagraphsubsection (1) above, the movantmoving party shall file a separate motion seeking expedited determination and requesting an order directing the United States trustee to appoint a consumer privacy ombudsman under 11 U.S.C. § 332.

(3) Unless otherwise ordered, the United States trustee shall seek approval of the appointment of the ombudsman within seven (7) court days of the entry of any such order.

(4) The ombudsman (3) The estate representative shall then serve the motion to sell personally identifiable information the motion and any notice of sale thereon in the manner provided in this Rule or other order of the Court and shall file a certificate of service within seven (7) days of service, unless a different deadline is set by the Court.

(4) If appointed, the ombudsman shall file a report with his or her recommendations and the basis therefore within seven (7) days of his or her appointment, subject to such enlargement of timeexcept as otherwise ordered by the Court may allow on request of the ombudsman made prior to the expiration of the deadline.

(g) For the purposes of this Rule, the term estate representative shall includeincludes, without limitation, a chapter 7 trustee, chapter 11 trustee, chapter 11 debtor in possession, chapter 12 or trustee, and chapter 13 debtor. authorized to sell by the Bankruptcy Code.

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