| For nearly 20 years, insolvency estate professionals have utilized “remnant asset” sales as a prudent and efficient means to fully and finally administer estate assets, and thereby fulfill their fiduciary duty to maximize estate value for the benefit of creditors. This simple practice, which has become commonplace in the restructuring industry, applies to all wind-down contexts regardless of approach, including liquidations under chapters 7 and 11, and subchapter V of the Bankruptcy Code, assignments for the benefit of creditors, state and federal receiverships, and corporate dissolutions.
Remnant asset sales transfer, to a third-party buyer who specializes in the acquisition of residual assets, all rights, title and interest in and to any remaining estate assets consisting of known or unknown assets or claims that have not been previously sold, assigned or transferred. Remnant assets include rights to payment, claims and causes of action — in other words, an estate’s remaining intangible payment and recovery rights, typically excluding any remaining tangible personal property.
Trustees, assignees and receivers alike, charged with similar duties and faced with similar challenges in administering estate assets, understand that remnant asset sales are beneficial once they have exhausted their asset identification and liquidation diligence. A remnant asset sale allows these professionals and the estates that they administer a means to benefit from nominal value assets and to dispose of assets that would otherwise require significant delay or investment in recovery.
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