A 363 Sale refers to the sale of assets in a bankruptcy proceeding under Section 363 of the United States Bankruptcy Code. This process allows a company that has filed for Chapter 11 bankruptcy to sell its assets, either as a going concern or in parts, to pay off creditors.

Here are the key points of a 363 Sale:

• Bankruptcy Context: The sale occurs during a Chapter 11 bankruptcy process, where a company reorganizes its debts and assets while attempting to stay in business.
• Court Supervision: The sale is conducted under the supervision of the bankruptcy court, ensuring that the process is fair and transparent. The court must approve the sale, and it often involves an auction to determine the highest or best bid.
• Free and Clear of Liens: One of the major advantages of a 363 Sale is that the assets can be sold “free and clear” of liens, claims, and other encumbrances. This means that the buyer typically acquires the assets without the baggage of the seller’s debts.
• Expedited Process: A 363 Sale is usually faster than other types of asset sales because it’s designed to quickly liquidate the bankrupt company’s assets to satisfy creditors and minimize the value destruction associated with prolonged bankruptcy proceedings.
• Common in Distressed Situations: 363 Sales are commonly used when a distressed company needs to quickly sell assets to raise funds or when a buyer wants to purchase assets at potentially lower prices due to the distressed nature of the sale.

Overall, a 363 Sale is a powerful tool in bankruptcy cases, offering both sellers and buyers certain advantages within a highly regulated environment.