Schafer and Weiner Settle Lawsuit over the Bankruptcy Sale of a Going Concern Business

December, 2017

Through a Chapter 11 case, an ongoing business may be sold free and clear of liens, claims and encumbrances through the magic of Bankruptcy Code section 363.  Sometimes problems occur.  Michael E. Baum and John Stockdale Jr. commenced, litigated, and settled a lawsuit brought by the seller of a nursing home against the section 363 buyer of that business that involved claims of fraud and breach of fiduciary duty that occurred pre-closing while the seller’s business was operated by the buyer.  After significant written discovery and on the eve of numerous depositions, the parties reached a mutually acceptable settlement resolving all of the issues between them.