Rule 6004-4 Special Sale Provisions in a Chapter 11 case.

(a)     Breakup/Topping Fees and Expense Reimbursement. When the seller in a chapter 11 case is seeking court approval of a breakup or topping fee or other bidding protections (such as the estate’s proposed payment of out-of-pocket expenses incurred by a bidder or contract purchaser), the sale motion must include the following:

          (1)     the name of the party entitled to the breakup or topping fee;

          (2)     the dollar amount or the method to calculate the breakup or topping fee; and

          (3)     any relationship between the seller and the party eligible for the breakup or topping fee.

(b)     Sale to Insider.  If the seller seeks court approval of a sale to an insider of the debtor, the motion must include the following information:

          (1)     the name of the insider;

          (2)     the relationship of the insider to the debtor; and

          (3)     the measures that have and will be taken to ensure the fairness of the sale process.

(c)     Agreements with Management.  Any motion seeking approval of the private sale of an ongoing business must disclose the following:

          (1)     whether the proposed purchaser has entered into any agreements with management or key employees concerning compensation or future employment;

          (2)     the material terms of any agreements between the proposed purchaser and management or key employees; and

          (3)     what measures have or will be taken to ensure the fairness of the sale in light of such agreements with management or key employees.

(d)      Tax Exemption.  If the debtor is seeking to have a sale declared exempt from taxes under 11 U.S.C. § 1146(a), the sale motion must disclose the type of tax (e.g., recording tax, stamp tax, use tax, capital gains tax) for which the exemption is sought. The debtor must also identify the state or states in which the affected property is located. The sale motion must state whether or not the chapter 11 plan has been confirmed.

(e)     Relief from F.R.B.P. 6004(h).  If the seller seeks relief from the stay imposed by F.R.B.P. 6004(h), the sale motion must state the basis for the request.

COMMENTS: L.B.R. 6004-4(d) was amended effective December 1, 2009 to comply with the decision of Florida Dept. of Revenue v. Piccadilly Cafeterias, Inc., 128 S.Ct. 2326 (U.S. 2008).

Part VI - Collection and Liquidation of the Estate