Chapter Eighteen. Use, Sale, or Lease of Property
 After reading this chapter, you will be able to:
 Describe the details of the actual liquidation process and common methodologies of liquidation, private sales and public auctions
 Define the concept of cash collateral and the limits upon its use

Understand a sale “free and clear of liens”
 Describe the sale of joint tenancy or tenancy in common property

 Normal everyday business transactions

 The basic rule is that a trustee may use, sell, or lease property of the estate, other than in the ordinary course of business, only after notice and a hearing.
 This means that in a Chapter 7 liquidation, any use, sale or lease of estate property will require notice and a hearing because a liquidation is not conducted in the ordinary course of business.
 In a Chapter 11, 12, or 13 proceeding, only transactions not in the ordinary course of business will require prior court approval.

 A capital asset is one that is used to operate the business, such as equipment or fixtures.
 A noncapital asset is, for example, the inventory of an operating business.

 Cash collateral is cash or, or its equivalent, in which a secured creditor may have an interest.
 Section 363(c) of the Bankruptcy Code restricts the use of cash collateral absent court approval.

Sales Requiring Prior Court Approval
 All Chapter 7 sales, except as in 18.1.2
&
2
 Sales not in the ordinary course of business

 Chapter 9, 11, 12, or 13 sales in the ordinary course of business
 Chapter 7 sales in the ordinary course of business when a Chapter 7 trustee is authorized to operate

Sales Free and Clear of Liens--
Conditions
 Nonbankruptcy law permits
 Lienholders consent
 All liens will be paid in full
 Lien is in good-faith dispute
 Lienholder could be legally compelled to accept money satisfaction