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Although Code § 541(c)(1)(A) provides that property becomes property of the estate "notwithstanding an provision in an agreement, transfer instrument, or applicable nonbankruptcy law that restricts or conditions transfer of such interest by the debtor," this does not necessarily mean that a trustee or debtor in possession can sell such an interest. The Third Circuit has held that where state law makes tort claims nonassignable, they could not be sold by a trustee or debtor in possession.148
Generally unsuccessful bidders are denied standing to appeal an order authorizing a sale to another party, since unsuccessful bidders are not regarded as parties in interest in the bankruptcy case.149 But the prospective bidder may have limited standing to challenge the good faith of the purchaser.150 Absent a stay pending appeal, Code § 363(m) moots appeals of all
148 Integrated Solutions, Inc. v. Service Support Specialties, Inc., 124 F.3d 487 (3rd Cir. 1997).
149 Calpine Corp. v. O'Brien Environmental Energy, Inc. (In re O'Brien Environmental Energy, Inc.), 181 F.3d 587 (3rd Cir. 1999); Licensing by Paolo, Inc. v. Sinatra (In re Gucci), 126 F.3d 380 (2nd Cir. 1997). But the successful purchaser does have standing to appeal denial of the debtor's motion to sell. Everex Systems, Inc. v. Cadtrak Corp. (In re CFLC, Inc.), 89 F.3d 673 (9th Cir. 1996).
150 Kabro Assoc. of West Islip, L.L.C. v. Colony Hill Assoc. (In re Colony Hill Assoc.), 111 F.3d 269 (2nd Cir. 1997).
44
