Jurisdiction(s):
United Kingdom

Key definition

Bankruptcy definition

What does Bankruptcy mean? Bankruptcy is the formal insolvency process for individuals who cannot pay their debts. It halts most enforcement, vests the bankrupt’s estate in a trustee, and realises assets and surplus income for creditors until discharge. In England and Wales, under the Insolvency Act 1986, a debtor applies online to the Adjudicator for a bankruptcy order; creditors petition the court. The Official Receiver acts as trustee unless an insolvency practitioner is appointed. Discharge is usually after 12 months; income payment orders/agreements can run up to three years; bankruptcy restrictions orders may extend restrictions. Scotland uses sequestration under the Bankruptcy (Scotland)...

United States Section 363 bankruptcy asset sales: requirements, free and clear sales, insider transactions, auctions, and comparisons with plans of reorganisation and out-of-court sales

Published by a LexisNexis Restructuring & Insolvency expert

Practice notes

ARCHIVED: This Practice Note is archived and is not being maintained. Transactions outside the ordinary course require court approval under section 363(b). Under Section 363(f), a debtor may transfer assets free and clear of liens and interests when certain conditions are satisfied. Frequently, assets are disposed of via a public auction, with debtors taking various steps to obtain court approval, including, among other things, entering a stalking horse agreement, setting bid procedures, and running an auction process, among other steps. Sales can also proceed through a plan of reorganisation, but the debtor must satisfy the confirmation requirements to secure the court’s approval. This Practice Note considers the Section 363 Sale requirements, approaches to selling assets in a bankruptcy case, and the distinctions between bankruptcy sales and sales conducted outside of bankruptcy, as follows:

Section 363 requirements
Section 363 Sales and plans of reorganisation
Section 363 Sales and out-of-court sales

Section 363 requirements

Section 363(b) of the Bankruptcy Code authorises a debtor, after notice and a hearing held before the bankruptcy court, to use, sell, or lease property outside the ordinary course of business, as appropriate...

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Web page updated on 22/05/2026

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