Unique aspects of sales involving nonprofit assets in bankruptcy

Sales of a debtor’s assets, either pursuant to section 363 of the Bankruptcy Code or through a confirmed chapter 11 plan of reorganisation, have become increasingly common in recent years and are generally viewed as an efficient and effective way to monetise a debtor’s assets and, under the appropriate circumstances, to maximise the value of its estate.

When a sale process is used in a bankruptcy case of a debtor that is a not-for-profit (NFP) entity, however, there are issues other than simply maximising value for creditors that must be taken into consideration. NFP debtors can and should consider, among other things, when choosing a purchaser whether such purchaser has the ability to obtain the necessary regulatory approvals under applicable state law, the purchaser’s commitment to continuing the debtor’s charitable mission and how the public interest will be served by the sale transaction.

Similarly, a healthcare NFP such as a hospital or a long-term care facility should consider the proposed purchaser’s ability to continue providing quality care (including indigent care) to its patients or residents after the sale is consummated…

If you are registered and logged in to the site, click on the link below to read the DLA Piper briefing. If not, please register or sign in with your details below.

Sign in or Register to continue reading this article

Sign in

Register

It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from DLA Piper

View more briefings from DLA Piper

Analysis from The Lawyer

View more analysis from The Lawyer

Overview

3 Noble Street
London
EC2V 7EE
UK
http://www.dlapiper.com

Turnover (£m): 1,566.29
No. of lawyers: 3,961 (UK 200)
Jurisdiction: global
No. of offices: more than 75
No. of qualified lawyers: 625 (International 50)

Jobs