§ 01
| 363 Sale Feature | Benefit for Buyer | Risk |
|---|---|---|
| Free and clear | No inherited liens, lawsuits, or environmental claims | Must still do diligence on asset quality |
| Court approval | Provides legal finality — sale is very hard to challenge | Auction process may push price up |
| Speed | Typically 45–90 days from filing to close | Fast timeline limits diligence |
| Stalking horse | Initial bidder sets the floor price and terms | Must accept being outbid at auction |
§ 02
The stalking horse bidder negotiates a breakup fee (typically 2–3% of deal value) for the risk of being outbid. Being the stalking horse gives you information advantage and sets the terms, even if you lose the auction.
§ 03
Follow a major bankruptcy case and watch for 363 sale motions. The stalking horse bid reveals the floor value, and subsequent bids reveal how much competitive interest exists.
§ 04
A company in Chapter 11 proposes a 363 sale of its best division for $500M to a stalking horse. Two other bidders emerge. What happens?
§ 05
§ 06
A bankrupt company initiates a Section 363 asset sale. Strategic buyer wins with a $500M bid. What's the main attraction of 363 sales for buyers?
Five questions · AI feedback
Sit with the ideas.
A bankrupt airline is selling its gates, routes, and aircraft via Section 363. A strategic competitor submits a stalking horse bid of $1.8B with a 2% breakup fee. At auction, a second bidder wins at $2.1B. The airline's secured debt is $1.5B and unsecured bonds total $900M. What are the key outcomes?
Why: