Buyer Beware: a Sale “Free and Clear” is not Free and Clear of Claims Whose Holders Were not Provided Notice of the Sale Hearing
The Creditors Rights
AUGUST 16, 2016
The Second Circuit ’s recent opinion in The Matter of: Motors Liquidation Company , 2016 WL 3766237 (2 nd Cir. 2016) should give pause to all buyers of assets from bankruptcy estates. This decision comes in the bankruptcy proceedings of General Motors, in which the debtor’s assets were sold by “Old GM” to “ New GM ” free and clear of all liens, interests, claims and encumbrances, including claims of successor liability, within weeks after the petition was filed.
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