Document Type

Research Memorandum

Publication Date




An important and traditional power afforded by the Bankruptcy Code to debtors and trustees is the power to sell encumbered property free and clear of any liens or encumbrances. See G COLLIER ON BANKRUPTCY, App. Pt. 44, at 44-529 (Alan N. Resnick et al. eds., 15th ed. rev. 2006). One way in which this power is given to debtors and trustees is through Section 363(f)(3) of the Bankruptcy Code, which provides a mechanism for property to be sold free and clear of any liens. See 11 U.S.C. § 363(f)(3) (2006). Yet, the application of Section 363(f)(3) is not entirely clear from the language of the statute, and a split has been created among courts which interpret the statute in different ways. See G COLLIER, supra, at 44-530. The following discussion outlines the application of Section 363(f)(3), first discussing the statute itself, then discussing the two approaches to the statute, and finally examining the practical consequences of each interpretation.



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