June 2011 Vol. 109 No. 8 THE REVIEW

A New Approach to Section 363(f)(3)

Evan F. Rosen

Section 363(f) of the Bankruptcy Code provides five circumstances in which a debtor may be permitted to sell property free of all claims and interests, outside of the ordinary course of business, and prior to plan confirmation. One of those five circumstances is contained in § 363(f)(3), which permits such a sale where the "interest is a lien and the price at which such property is to be sold is greater than the aggregate value of all liens on such property." While it is far from certain whether § 363(f)(3) requires a price "greater than the aggregate [face value] of all liens on the property"-the face value approach-or a price that is "greater than aggregate [economic value] of all liens on the property"-the economic value approach, this Note argues that, properly understood, both approaches should lead to the same result. More specifically, under this Note's strict textual approach, the choice between these two meanings of "value" in § 363(f)(3) is irrelevant; neither interpretation of § 363(f)(3) permits courts to authorize the sale of property securing underwater liens-that is, liens whose face value exceeds the fair market value of the property securing it.

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