Sale - Free and Clear of Liens
PLEASE READ CAREFULLY THIS IS A TWO-STEP (2) PROCESS
A sale of property free and clear of liens may be commenced by motion and must conform with F.R.B.P. 9014. A sale free and clear of liens is also subject to the additional noticing requirements of L.B.R. 6004-5. When a motion is filed for a sale free and clear of liens, the clerk will issue an order fixing a 14 day response date and a hearing date. A hearing will be held only if a responsive pleading is timely filed, requested by the moving party, or ordered by the court. Otherwise an order granting the relief will be entered without a hearing. This filing should be accompanied by the Motion and Proposed Order.
After the order is issued by the Clerk setting a response and hearing date, the movant must serve the Motion along with a copy of the Scheduling Order on all respondents named in the Motion claiming an interest in the property. A Certificate of Service must be filed evidencing the Motion and Scheduling Order were served on all respondents. Next the movant must prepare and docket a Notice of Sale, which conforms in content to L.B.R. 6004-1(c). A Certificate of Service must also be filed evidencing the Notice of Sale was served on all creditors and applicable parties pursuant to LBR 6004-1(d) & (e) at least twenty-one (21) days before the hearing on the sale.
Property of the estate cannot be sold without a general notice pursuant to U.S.C. Section 363.
A sale of property free and clear of liens must be filed as adversary proceeding and commenced by a complaint when the seller seeks to also:
(1) Determine the validity, priority, or extent of a lien or other interest in the property other than the avoidance of a lien or other transfer of exempt property under 11 U.S.C. Section 522(f); or
(2) Obtain approval under 11 U.S.C. Section 363(h) for the sale of both the interest of the estate and of a co-owner in the property unless the concurrence of the co-owner has been obtained.
A. Type: Motion and Scheduling Order - must be served upon all lienholders and other parties claiming interest in the property and their counsel of record. (The hearing will be scheduled no sooner than twenty-five (25) days after the filing of the motion.)
B. Who Serves: Movant -- Court if filed by Trustee or UST