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I am a potential buyer of a piece of real estate, the corporation that owns the land is in Chapter 11 bankruptcy, however,

Houston, TX |

the judge ordered the land "abandoned" in the bankruptcy case? does this mean that I don't have to deal with the bankruptcy court when buying the land? or does the transaction still need to go through the bankruptcy court?

Attorney Answers 8


  1. Best answer

    Abandonment is covered by the following statute, 11 U.S.C. Section 554.

    a) After notice and a hearing, the trustee may abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate.
    (b) On request of a party in interest and after notice and a hearing, the court may order the trustee to abandon any property of the estate that is burdensome to the estate or that is of inconsequential value and benefit to the estate.
    (c) Unless the court orders otherwise, any property scheduled under section 521 (a)(1) of this title not otherwise administered at the time of the closing of a case is abandoned to the debtor and administered for purposes of section 350 of this title.
    (d) Unless the court orders otherwise, property of the estate that is not abandoned under this section and that is not administered in the case remains property of the estate.

    Under the facts you have outlined, the Court has had a hearing, noticed the creditors and parties-in-interest, and has ordered the property abandoned to the debtor. The property is no longer property of the estate. 11 U.S.C. Section 363 controls the sale of property of the estate only. This property is no longer property of the estate. Consequently, if the property has been properly abandoned by the estate, then a purchaser may rely upon a deed from the debtor (with any necessary corporate resolutions) without motion, notice, or order of sale. However, it is the policy of many Title Companies to require a Court Order and if there is a Trustee appointed he or she should be notified and consulted about the sale.


  2. Depends on what the actual wording of the Order is.

    It's very strange to me for a property to be abandoned in Chapter 11, specially when you want to buy it. Something does not make sense.

    Be sure to designate "best answer." If you live in S. California, you may call my firm for a consultation 818-507-6000. The above is general legal and business analysis. It is not "legal advice" but analysis, and different lawyers may analyse this matter differently, especially if there are additional facts not reflected in the question. I am not your attorney until retained by a written retainer agreement signed by both of us. I am only licensed in California. See also avvo.com terms and conditions item 9, incorporated as if it was reprinted here. Please visit my web site: www.tilemlaw.com for more information about my services.


  3. Too may variables in a Ch. 11. There are reasons you may want a Court order approving the sale.


  4. I agree with my colleagues. Start by asking the Bankruptcy Trustee.

    Actively practicing law in Texas. Inactive licenses in Arizona and Georgia. All answers are general in nature and no attorney/client relationship exists in this forum.


  5. Call the lawyer for the debtor and ask him this question. Title company will want an order from the bk court to close the deal.


  6. The most affordable way is to demand a Title Policy. The Title Company will make the necessary requirements for you, which will most likely include an Order approving the sale as has been stated previously.


  7. All the answers submitted on this question are true but they do not tell you what to do. The Trustee has abandoned the property you should not have to involve the court to consummate the transaction.

    However, if you want action and really want to move the sale to completion do this: Petition the court for an order giving you permission to sell the property. The order is overkill but watch how the parties jump once you have an order saying you can buy the land.


  8. I would start by touching base with the Trustee and the Debtor's Attorney. You might well need permission from the court to complete the transaction. Do not try this alone.

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