Sale - Free and Clear of Liens

Rev. 09/01/14
MOTION FOR SALE FREE AND CLEAR OF LIENS
 
Overview:                               

PLEASE READ CAREFULLY THIS IS A TWO-STEP (2) PROCESS

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.

For order format, please see Proposed Orders
 
 
Codes, Rules and Forms:
 
Bankruptcy Code:
Bankruptcy Rule:
Local Rule:
Local Form:
None
 

CM/ECF Event(s):

              Motions/Applications/Contested Matters, Use, Sale, Lease or Prohibit or Condition of Property
              Miscellaneous, Notice of Use, Sale, Lease or Prohibit or Condition of Property and Certificate of Service (Attorney)
              Trustee, Notice of Use, Sale, Lease or Prohibit or Condition of Property and Certificate of Service (Trustee)
              US Trustee, Notice of Use, Sale, Lease or Prohibit or Condition of Property and Certificate of Service (US Trustee)

 
I.     Noticing:
 

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-eight (28) days after the filing of the motion.)

                         Notice of Sale - prepared and filed by the movant which conforms in content with L.B.R. 6004-1(c) must be served on all creditors and applicable parties in interest pursuant to L.B.R. 6004-1(d) at least twenty-one (21) days before the hearing on the sale.
 

B.       Who Serves:    Movant

C.       Service:             Matrix, T, UST, COMM, US FRBP 2002(j), and all holders of liens or encumbrances against the property (L.B.R. 6004-1(d))