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1121. This requires a showing of "cause," but the cause requirement has been referred to as a standard intended to give bankruptcy courts "maximum flexibility to suit various types of reorganization proceedings." As with most such "cause" standards, courts have generated lists of factors to be considered, but they are nonexclusive and courts are not limited to counting the factors. But sheer size and complexity may be sufficient cause in itself. The extension may be denied when there is gross mismanagement of the debtor's operations or feuding among its principals, the debtor has made no progress or an extension would be fruitless, or where there have been multiple extensions or the purpose is to pressure creditors to acquiesce to the debtor's plans.
Delaware's local rule automatically extending time on timely filed motions to extend time presumably also applies to motions to extend exclusivity.
BAPCAP put an outside limit on extensions of exclusivity. Under BAPCPA, new Code § 1121(d)(2) provides that the initial 120-day filing period may not be extended beyond 18 months after the petition date, and the 180-day solicitation period may not be extended beyond 20 months after the petition date.
Pre-BAPCPA, if the debtor had elected "small business" treatment under § 1121(e), no extension may be granted beyond the 160 day outside limit. BAPCPA changed this by making small business treatment mandatory for all debtors that satisfied the § 101(51D) definition by having aggregate noncontingent liquidated secured and unsecured debts of less than $2 million, and no active creditors' committee. In such a small business case post-BAPCPA, only the debtor may file a plan within 180 days of the petition date, any plan and disclosure statement must be filed within 300 days of the petition date, and such periods may be extended only if the debtor demonstrates that it is more likely than not to confirm a plan within a reasonable period of time and a new deadline is imposed prior to expiration of the existing deadline.
Sales of assets out of the ordinary course of business are governed by Code § 363(b), which requires a notice and hearing, and Rule 6004. Although the Code is silent on the topic and Rule 6004 expressly permits sales by "private sale" as well as by public auction, most bankruptcy courts will receive higher and better bids made at the hearing to approve the sale, or may expressly require some auction procedures to be employed. Indeed, the Second Circuit upheld a bankruptcy court's receipt of a modification of a bid after the bidding had closed, emphasizing the need for flexibility in such processes to maximize the benefit to the estate.
Sales Free and Clear of Liens
Code § 363(f) permits sales free and clear if liens or other interests if (1) nonbankruptcy law would permit such a sale, (2) the interest holder consents, (3) the
