A 363 sale is a court-approved sale of a bankrupt company's assets under Section 363 of the Bankruptcy Code — often the fastest way to preserve going-concern value in a Chapter 11 case.
At CRAGSI, we define a 363 sale as a court-approved sale of assets conducted pursuant to Section 363 of the U.S. Bankruptcy Code. 363 sales allow a debtor to sell assets — often the entire business as a going concern — free and clear of most liens, claims, and encumbrances, providing the buyer with clean title impossible to achieve in a conventional distressed sale.
363 sales are faster than a full plan of reorganization — completing in as little as 30–60 days — and preserve going-concern value by keeping the business operating through the sale process. Famous examples include the 363 sales of Chrysler, General Motors, and Lehman Brothers.
The process typically begins with the debtor identifying a "stalking horse" bidder who serves as the floor bidder in a competitive auction. Other parties then submit competing bids at a court-supervised auction. The highest and best bid wins, subject to court approval.
Related CRAGSI services: Asset Dispositions · Turnarounds & Restructurings