Last month, Judge Caproni of the Southern District of New York issued a ruling stating that if a commercial lease does not require a landlord to hold a security deposit in trust and if there is no state statute generally requiring landlords to do so, the security deposit may not be recoverable by the tenant when the landlord files for bankruptcy. See 10FN Inc. v. Cerberus Business Finance LLC, 21-5996 (S.D.N.Y. Oct. 18, 2022).

Over the summer, we wrote about why health care companies may want to consider buying assets out of bankruptcy, taking advantage of the Bankruptcy Code Section 363 sale process (a “363 Sale”). We are back with our second post, to provide more detail to the process and discuss some pros and cons of 363 Sales.

This two-part blog series discusses why buyers looking to make strategic purchases in the health care industry might want to take advantage of the Bankruptcy Code Section 363 sale process (363 Sale) and the pros and cons of buying assets out of bankruptcy through a 363 Sale.