Evaluating Antitrust Exposure When Purchasing A Competitor’s Assets In Bankruptcy: "Caveat Emptor"!

I. Introduction

Assets sales in bankruptcy proceedings are accomplished pursuant to Section 363 of the Bankruptcy Code.¹ The vast majority of bankruptcy sale orders go unchallenged, largely because sale orders are "final orders" for res judicata² purposes and the buyer receives good and marketable title "against the world." The Bankruptcy Code offers protection to the reasonable expectations of good faith third-party purchasers by insulating Section 363 orders from appellate review, absent a stay pending appeal, thereby safeguarding the finality of the sale.³ The buyer of bankruptcy assets understandably achieves an elevated sense that the buyer's ownership rights are legally protected.