If a business is in bankruptcy, can you purchase the business?
Printable View
If a business is in bankruptcy, can you purchase the business?
It is possible to purchase a business while it is in bankruptcy proceedings.
If the business filed a Chapter 7 bankruptcy (liquidation), the buyer can try to negotiate a purchase price for the assets of the business with the trustee, or purchase them at auction if the assets are auctioned.
If the business has filed a Chapter 11 bankruptcy (reorganization), the purchase may be made part of the plan for reorganization, or it can be done as a Section 363 sale (11 USC Sec. 363). Although a Section 363 sale must be approved by the bankruptcy court after notice to all interested parties, it is normally faster and cheaper to accomplish than a purchase through the reorganization plan.