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Local Bankr.R.6004-1

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Local Bankr. R. 6004-1 Sale of Estate Property – General.

(a)      Notice of Proposed Sale of Estate Property. A party proposing to sell property of the estate by a public or private sale must complete, file, and serve the Local Form Notice of  Private Sale of Estate Property pursuant to L.R. Bankr. P. 6004-1(a) (Appendix O) pursuant to FRBP 2002(a)(2), and must include information supporting the proposed consideration, the evidence of value of the property, and the efforts undertaken to obtain a higher and better purchase price for the sale of the property.  Unless otherwise ordered by the Court upon a showing of good cause, a party proposing to sell real property must do so by public sale. A hearing on the Notice of Proposed Sale of Estate may be held in accordance with Appendix M.

(b)      Motion to Sell Estate Property.   If property of the estate is to be sold, or to be sold free and clear of liens with liens attaching to the proceeds pursuant to 11 U.S.C. § 363(f), in addition to the filing and service of Local Form Notice of  Public Sale of Estate Property pursuant to L.R.Bankr. P. 6004-1(b) (Appendix O) required by section (a) of this Rule, the moving party shall file a motion which names as a respondent all entities asserting a lien on or interest in the property to be sold, describes with particularity the nature of the lien or interest claimed, how it is perfected and whether or not the lien or interest is disputed by the movant. The motion and proposed order shall also detail what items will be paid at the time of consummation of the sale and what items will be paid pursuant to a future order of the Court. A hearing on the Motion to Sell Estate Property shall be held in accordance with Appendix N.

(c)      No trustee, appraiser, auctioneer, officer, director, stockholder, agent, employee, or relative of a trustee, appraiser, or auctioneer, shall directly or indirectly purchase any of the property of any bankruptcy estate in which such trustee, appraiser, or auctioneer is employed, retained, or engaged.

(d)      Unless otherwise ordered by the Court: (i) a public sale shall be advertised at least fourteen (14) days before the sale, although the trustee may require further advertising; (ii) the property to be sold shall be open to public inspection for such reasonable period prior to the sale as the trustee may determine; and (iii) an auctioneer shall, before receiving bids, announce the terms of sale, including the statement that no sale is final without the approval of the trustee and the Bankruptcy Court if required by the order authorizing the auction. If the auction is conducted on the Internet/electronically, this announcement shall be posted

(e)      A purchaser at any public sale shall not be entitled to a refund on account of an immaterial discrepancy between the assets offered for sale by the auctioneer and the assets as listed in any inventory that is provided to bidders prior to the sale. Any property that, because of reclamation proceedings or for other reasons, is not included in the sale, shall be segregated and conspicuously marked "not included in sale," and such fact shall be announced by the auctioneer before the sale. Except upon prior approval of the Court, only items constituting assets of the estate being administered shall be sold at any sale held pursuant to provisions of the Bankruptcy Code, and such sales shall not be conducted in conjunction with any non-bankruptcy sale.

(f)      When the trustee acts as auctioneer, he or she shall receive no compensation in excess of the amount provided by the Bankruptcy Code and Rules.

(g)      Unless the Court orders otherwise, trustees must be in attendance throughout all in-person auction sales and attend all subsequent closings for the sale of property of the estate.

(h)      The sanctions that may be imposed for violation of this rule, include, but are not limited to, disgorgement, fines, and the disqualification of a person from future employment on behalf of bankruptcy estates.

(i) Internet Auction Mechanisms

     (1) With prior Court approval, after appropriate notice as required by FRBP 2002(a), a Chapter 7 Trustee, Chapter 11 Trustee, Chapter 11 debtorin-possession, Chapter 12 Trustee, and Chapter 13 Debtor (collectively, the "Movant"), may sell any property of the estate by public auction through the use of an automated Internet auction, listing or brokerage mechanism ("Internet Auction Mechanism").

     (2) In any motion requesting such approval, the movant must:

(A) Identify the name and uniform resource locator(s) (URL) of the proposed Internet Auction Mechanism;

(B) State why the movant believes that use of the Internet Auction Mechanism is in the best interests of the estate;

(C) Disclose whether the movant has or any party in interest is known to have any connections with the proposed Internet Auction Mechanism or any expected bidder;

(D) Disclose all fees associated with use of the Internet Auction Mechanism;

(E) Disclose whether use of the Internet Auction Mechanism is subject to rules, policies, procedures or terms or conditions and, if so summarize any such rules, policies, procedures or terms or conditions that are likely to result in any restrictions on bidding for the asset(s) proposed to be sold or limitations on the estate representative in offering asset(s) for sale with full or partial reserve or otherwise controlling the determination to sell each asset;

(F) Identify the mechanism for payment to the estate;

(G) Unless the Internet Auction Mechanism is maintained and operated by the auctioneer represent that, to the best knowledge of the movant, the Internet Auction Mechanism will not provide auction services or any other services beyond access to its automated on-line services and related customer support; and

(H) Request authority to:

(i) comply with any rules, policies, procedures, or terms or conditions of the Internet Auction Mechanism disclosed in the motion and enter into any required agreements in support thereof;

(ii) consummate such sale(s); and

(iii) pay any and all fees associated with use of the Internet Auction Mechanism, each without further order of the Court.

(j) Nothing in this Rule shall limit applicability of the requirements of Local Bankr. R 6005-1 with respect to any auctioneer hired by an estate representative to provide services beyond access to an Internet Auction Mechanism.

(k) Unless the Court orders otherwise, a listing placed on an Internet Auction Mechanism shall state the bankruptcy case name and number and that the sale procedure has been approved by the United States Bankruptcy Court for the District of Connecticut.