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Bankruptcy Sale
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Bankruptyc and Its Reprecussions:
Bankruptcy has now a common phenomenon. We quite often hear about the bankruptcy of a person or a company. The reader should know that a person or a company declares itself bankrupt because it is not able to repay the funds it has borrowed from various other parties and the financial institutions.
It is also a result of the continuous pressure from the various creditors for the repayment of their amount that results in declaring the bankruptcy. After the application is submitted in the court of law for the bankruptcy, the whole matter is then preceded as per the different laws and special persons are appointed for carrying out the various functions as per the bankruptcy law. Though there are different bankruptcy laws in different countries, the course of action is essentially the same. All the assets of the person or the company that has declared itself as bankrupt are sold by the court to distribute the proceeds among the various creditors of the bankrupt person or the company. The amount realized from the various debtors of the bankrupt company etc is also adjusted towards the various creditors of the bankrupt person or the company. This process is known as the bankruptcy sale. Let us discuss more about it in our next part of discussion.
Bankruptcy Sale:
It is known to all of us that a person has many assets that he owns at the time when he declare himself bankrupt. Also, if a company declares itself bankrupt, it has many assets in its name. These assets are of course sold to give away the proceeds to the various creditors of the bankrupt person or the company. It should be known here that there are certain assets that are not allowed by the law to be sold off when a person or a company declares itself bankrupt and can be retained easily. A Company or a person should contact any bankruptcy lawyer for getting all the required information about these assets. The assets are of sold by the bankruptcy courts. There are special people that are appointed for the purpose and are known as the bankruptcy trustees. This bankruptcy tries their level best to sell the assets quickly so that the creditors can be given the money they lent to the bankrupt person or the company. Also, there are many web sites that are hosted by the various government offices that help the bankruptcy trustees so realize the proceeds quickly. For example, in the United States, one such web site is the www.bankruptcysales.com. Any person in the U.S can log on to this site to get all the required information about the bankruptcy sales.
There are many assets that a company, person etc owns that are sold by the bankruptcy trustees. The assets that are generally sold are the equipment, farm related assets, various financial assets, going concern businesses & operating licenses, inventor, intellectual property, office furniture, real estate- both commercial and residential, personal assets, various vehicles, boats etc owned by the bankrupt company, person etc. Thus, there is long list of the assets that can be sold by the bankruptcy trustee to realize the money. We have also mentioned about financial assets. The financial assets of the bankrupt company etc consist of accounts receivable, contract rights, judgements and liens, notes (unsecured) and other types of such assets). The bankruptcy trustee also sells all these along with other assets of the company.
Other Issues Related to The Bankruptcy Sale:
There are also some other issues that have to be discussed here for the proper understanding of the topic. First of all, it should be understood that once the bankruptcy trustee has closed the case, all the property left has to be returned to the bankrupt company or the person. The bankruptcy trustee cannot assert his interest in the property again. This is a concept that should be properly understood by all the persons that have declared themselves bankrupt. So, it can be said easily that all the property that the bankrupt company or the person has at the time of filing the application for the bankruptcy is abandoned to its favor when the bankruptcy trustee closes the close. But it depends upon under which chapter the bankruptcy has been filed. For example, in the United States, it is applicable only to the cases that have been filed under chapter 7. So, make sure about the applicability of the various laws. When the bankruptcy trustee sells the assets, the various buyers are allowed to acquire the assets. These assets are acquired free and clear of all types of liens and other such statements. Also, the buyer can easily go for buying the debtors contracts and the leases easily. The sale of the assets of the bankrupt person or the company is affected by various means like auctions, private sales, lot or bulk sales, ongoing concern transactions etc. So, there are many ways in which the sale can take place and it depends upon the bankruptcy trustee how he wants to sell the assets of the bankrupt person or the company. Also, if there is no bankruptcy trustee appointed for selling the assets, the seller is indeed the debtor in possession. It is also called as DIP. The DIP is the same company that has filed an application for the bankruptcy, but is considered as a separate legal entity. But for all the practical purposes like, management, business operations etc, it is the one and the same company. At time of sale, all unsecured creditors of the bankrupt company should take an active role so that their interest is not suffered. It should be tried that assets are sold for the maximum amount of value, though the bankruptcy court would definitely approve the sale. The court will also approve the highest offer and what is best in the interests of all. So, the bankruptcy court plays a very important role in the selling of assets.
Thus, Bankruotcy Sale is There:
Whether the bankruptcy appoints the bankruptcy trustee or not, it is certain that it would go for the best offer in which the interests of all the parties are satisfied. The bankruptcy sale is of course a way of giving back the creditors their money that they had provided to the bankrupt person or the company.
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