You are here

Rule 6004-1. Sales of Estate Property

Part VI. Collection and Liquidation of the Estate

            A.         General. Notices regarding motions for private sales or leases of property under Fed. R. Bankr. P. 2002 and 6004 must state the name of the purchaser and the relationship, if any, the purchaser or the purchaser’s firm, partnership, corporation, or any other form of business association, and all members, associates, and professional employees thereof, may directly or indirectly have with the case or any related case.

            B.         Tax Information. The notice must also state the tax consequences of the sale including the tax basis of the property, projected costs of sale, anticipated capital gain or loss, and anticipated net taxable income from sale after adjustments. If the information is not available, the notice must state all available information and explain why other information is not available.

            C.         Sale of Assets in Chapter 11 Cases. In a Chapter 11 case, if the debtor or trustee seeks approval to sell property of the estate under 11 U.S.C. § 363(b) before an order of confirmation is entered, and the sale encompasses all or substantially all the assets of the estate, the notice of sale must clearly and conspicuously state that fact. In addition to the information required under Fed. R. Bankr. P. 2002(c) and this Local Rule, the notice of sale must state the extent, if any, to which the proceeds of sale will be used to benefit each class of creditors, the extent of the debtor’s liabilities, and the estimated net value of any of the remaining assets not subject to the proposed sale. The notice must also state the business justification to dispose of estate assets before a disclosure statement is approved or a plan confirmed.

            D.        Notice to IRS of All Sales and Leases. In all individual Chapter 7 and Chapter 11 cases, the Internal Revenue Service is a party in interest and must be provided notice of any sale under 11 U.S.C. § 363, or of a debtor’s intent to enter any lease under 11 U.S.C. § 363 or to accept any existing lease under 11 U.S.C. § 365.