Third Circuit Finds Escrows Funded by Secured Lenders Are Not Estate Property and Not Subject to Bankruptcy Code Priorities By Lindsay Weber (PDF)
The Third Circuit has upheld a § 363 sale that permitted the debtor to skip over a $24 million payment to the IRS--a payment that would have been entitled to priority status had the sale been effectuated through a Ch. 11 plan--in favor of its more junior general unsecured creditors. The author of this article explains the court's decision, which will no doubt have a significant impact on the way § 363 sales are structured going forward.
Lindsay Weber is an associate at Quinn Emanuel Urquhart & Sullivan, LLP. Her practice focuses on complex corporate restructurings and other bankruptcy related matters. Prior to joining the firm, she clerked for the Honorable Mary D. France in the United States Bankruptcy Court for the Middle District of Pennsylvania. Lindsay received her J.D., cum laude, from Brooklyn Law School, and her B.A., cum laude, in History and Vocal Performance from Bloomsburg University of Pennsylvania. She may be contacted at email@example.com.
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