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Can You Purchase a Business While it is in Bankruptcy

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  • 01-07-2017, 01:03 PM
    lawfacts
    Can You Purchase a Business While it is in Bankruptcy
    If a business is in bankruptcy, can you purchase the business?
  • 01-07-2017, 01:16 PM
    Mr. Knowitall
    Re: Can You Purchase a Business While it is in Bankruptcy
    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.
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