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Business Bankruptcy Issues The Financially Troubled Company

Second Liens And Recharacterization: Is More Litigation Around The Corner?

In many Chapter 11 bankruptcy cases, unsecured creditors investigate whether a basis exists to recharacterize existing secured debt as equity. The reason? A successful challenge can turn first or second lien secured debt into "back-of-the-line" capital contributions, enabling unsecured creditors to realize a much greater recovery. A recent article by two of my Bankruptcy & Restructuring Group colleagues at Cooley Godward Kronish LLP, Ronald R. Sussman and Michael A. Klein, digs deeper into the complex issues behind these claims.

Appearing in the October 2008 edition of The Journal of Corporate Renewal published by the Turnaround Management Association, the article is entitled "Recharacterization Battles Likely in Next Round of Bankruptcies." You can access a copy of the article, reprinted with permission of The Journal of Corporate Renewal (© 2008, The Journal of Corporate Renewal), by clicking on its title in the prior sentence. It first discusses the concept of recharacterization itself, including the key factors courts typically apply. Next, the article compares recharacterization to the doctrine of equitable subordination under Section 510(c) of the Bankruptcy Code and examines some of the key differences between the two.

After setting the stage, the article then looks ahead to what appears to be a coming wave of bankruptcy cases. It focuses on how future efforts by unsecured creditors to challenge second lien loans — a type of financing that has become a major part of corporate capital structures over the past several years — may fare:

The next wave of bankruptcies undoubtedly will include attempts by unsecured creditors to recharacterize second lien debt as equity, especially when the second lien holder is an insider of the debtor. However, the current framework established by Bankruptcy Courts presents significant obstacles to unsecured creditors seeking to knock out the second lien claims of lenders that provided capital on a purportedly secured basis to a struggling debtor that was unable to find capital from alternative sources.

The article observes that, given the present state of the law, courts will have to embrace a more flexible legal standard if unsecured creditors are to have success in recharacterizing second lien debt as equity. It concludes by offering a different approach for addressing recharacterization with this new landscape in mind. Unsecured creditors, lenders, insolvency professionals and others confronting these issues will find the article to be a helpful and interesting read.

Business Bankruptcy Issues Recent Developments

The 2005 Bankruptcy Law Changes And Their Impact On Retail Reorganizations

On September 26, 2008, my partner Lawrence Gottlieb, the Chair of the Bankruptcy & Restructuring Group at Cooley Godward Kronish LLP, testified before the Subcommittee on Commercial and Administrative Law of the United States House of Representatives Committee on the Judiciary.  Joining him at the hearing were Professor Jay Westbrook of the University of Texas Law School and Professor Barry Adler of the New York University School of Law. The subject of the hearing was "Lehman Brothers, Sharper Image, Bennigan’s, and Beyond: Is Chapter 11 Bankruptcy Working?" You can access their testimony and watch the full hearing by clicking on the link in the prior sentence.

In his testimony, entitled "The Disappearance of Retail Reorganization In The Post-BAPCPA Era," (a copy of which is available by clicking on its title), he discussed the major impact the 2005 Bankruptcy Abuse Prevention and Consumer Protection Act ("BAPCPA") has had on retail reorganizations. One of his main observations involves the 2005 amendment limiting the time within which a debtor may assume or reject commercial real estate leases to a total of 210 days (if a 90-day extension is granted). He testified that this change, in combination with other BAPCPA provisions that reduce a retailer’s liquidity, has had a devastating effect on a retailer’s ability to reorganize. Among his comments are the following:

BAPCPA has left retailers without adequate time and money to effectuate operational initiatives and cost cutting measures needed to resuscitate their businesses. Retailers now enter the Chapter 11 arena with little choice but to narrowly tailor their strategy to ensure that their lenders are not deprived of the substantial benefits and protections conferred by section 363(b) of the Bankruptcy Code, which authorizes the use, sale or lease of estate property outside the ordinary course of business upon court approval. Section 363(b) offers the unique ability to cleanse the assets of a distressed company by permitting debtors to convey assets “free and clear,” thereby maximizing value by removing the uncertainty of such stigmas as successor liability, fraudulent transfer claims and lien issues that often accompany asset purchases. Prepetition lenders, cognizant of this powerful liquidating tool and mindful of the numerous liquidity hurdles that the debtor must clear as a result of BAPCPA, have little to gain by risking their collateral in pursuit of a reorganization process now widely perceived as hopeless.

Indeed, the constricted time frames and liquidity problems created and imposed by BAPCPA have effectively eliminated the need for existing lenders to provide any more financing than necessary to position the debtor to liquidate its assets in the first few months of the case. Today, the debtor is no longer “in possession” of its assets or its future upon the commencement of its Chapter 11 case. BAPCPA’s constrictive liquidity provisions and the enormous leverage handed to secured lenders as a result thereof have eliminated the ability of retailers to control the Chapter 11 process as a “debtor-in-possession.” Rather, the process is now controlled almost exclusively by prepetition lenders, who have essentially assumed the role of "creditor-in-possession." 

The Cooley Bankruptcy & Restructuring Group, which Lawrence Gottlieb chairs, is representing official committees of unsecured creditors in high-profile national and regional retail bankruptcies such as Steve & Barry’s, The Bombay Company, Hancock Fabrics, Lillian Vernon, The Sharper Image, Mervyns, Shoe Pavilion, Boscov’s and Goody’s. His testimony, drawing on experience in these recent cases as well as many others in the past, underscores how BAPCPA’s key changes have transformed Chapter 11 bankruptcy from a process by which retailers could reorganize into one where almost all face an early liquidation. Retailers, creditors, and insolvency professionals will find his full testimony on the disappearing retail reorganization both timely and informative.

Business Bankruptcy Issues Recent Developments

The Credit Crisis And DIP Financing

The credit crisis has made it difficult for companies to borrow throughout the economy. It should come as little surprise then that the constriction in the credit markets is hitting Chapter 11 debtors in possession as well. According to an article entitled "Bankruptcy financing gets pricier and more elusive," debtor in possession financing (commonly known as "DIP financing") has recently become more costly for companies in Chapter 11 bankruptcy — when it’s available at all.

  • Adding to the challenge is the amount of prepetition secured financing, including second lien debt, that many companies took on over the past few years when financing was easier to get. A company that has already encumbered its assets with secured debt may have little or no unencumbered assets to offer a DIP lender as collateral.
  • The article predicts that fewer companies in Chapter 11 will be able to find new lenders to provide DIP financing, giving the DIP’s existing lenders the advantage in negotiating DIP financing terms such as interest rate and fees.
  • Alternative sources of DIP financing may be able to be found in certain circumstances. In some cases, the buyer in a Section 363 asset sale may provide DIP financing to bridge to the closing of the sale. However, such limited purpose financing is not a substitute for the type of DIP financing generally needed for a successful reorganization.

Cash is king in bankruptcy and DIP financing is often a key source of that cash. Until the credit crisis subsides and DIP financing becomes more available, companies may find it more difficult to reorganize in Chapter 11.

Business Bankruptcy Issues Recent Developments

Ninth Circuit Rules In N.C.P. Marketing Trademark License Case

Back in March I gave an update on In re: N.C.P. Marketing Group, Inc., a case addressing whether a debtor can assume a trademark license over the trademark owner’s objection. In 2005, the U.S. District Court for the District of Nevada issued its first of a kind decision, In re: N.C.P. Marketing Group, Inc., 337 B.R. 230 (D.Nev. 2005), holding that trademark licenses are personal and nonassignable in bankruptcy absent a provision in the trademark license to the contrary. Click here for a copy of the N.C.P Marketing Group decision and here and here to read earlier posts on the case. 

The N.C.P. Marketing Court’s Analysis. In reaching its conclusion, the District Court held that under the Lanham Act, the federal trademark statute, a trademark owner has a right and duty to control the quality of goods sold under the mark:

Because the owner of the trademark has an interest in the party to whom the trademark is assigned so that it can maintain the good will, quality, and value of its products and thereby its trademark, trademark rights are personal to the assignee and not freely assignable to a third party. 

The trademark owner in that case, Billy Blanks of theBilly Blanks® Tae Bo® fitness program, successfully moved the court to compel rejection of the trademark license because under the "hypothetical test" analysis of Section 365(c)(1) of the Bankruptcy Code adopted by the U.S. Court of Appeals for the Ninth Circuit, contracts that cannot be assigned by the debtor without the nondebtor party’s consent cannot be assumed by the debtor either. (For a full discussion of these issues, take a look at this earlier post entitled "Assumption of Intellectual Property Licenses In Bankruptcy: Are Recent Cases Tilting Toward Debtors?")  

The Ninth Circuit Appeal. N.C.P. Marketing appealed the decision to the Ninth Circuit, the appeal was fully briefed, and oral argument had been scheduled for November 5, 2007.

  • Prior to the oral argument, the Chapter 7 trustee for N.C.P. Marketing reached a settlement in the case. At the trustee’s request, the Ninth Circuit took the oral argument off calendar and directed the parties to move to dismiss the appeal if the settlement was approved by the Bankruptcy Court.
  • However, instead of approving the settlement the Bankruptcy Court authorized a sale of the appeal rights to certain objecting parties, who then restarted the appeal before the Ninth Circuit and requested an oral argument.

The Ninth Circuit Affirms The District Court’s Decision. In an unpublished order dated May 23, 2008, the Ninth Circuit denied the request for oral argument and affirmed the District Court’s judgment "for the reasons provided by that court." The appellants’ request for a panel rehearing or rehearing en banc was denied by order dated July 9, 2008. The Ninth Circuit designated the May 23, 2008 order affirming the District Court as "not for publication," meaning it is not precedent under the Federal Rules of Appellate Procedure and the Ninth Circuit’s Circuit Rules. Nevertheless, the order may be cited in other cases.

A Final Thought. Precedent or not, the Ninth Circuit’s order has affirmed the District Court’s decision on this important issue. Trademark owners now have a stronger argument in the Ninth Circuit (and also in the Southern District of Florida given the In re Wellington Vision, Inc. decision last year), that non-exclusive trademark licenses may not be assigned, or even assumed, in bankruptcy cases absent consent of the trademark owner.

Business Bankruptcy Issues Recent Developments

Will Section 363 “Free And Clear” Sale Orders Survive An Appeal? A Recent Appellate Decision Raises New Doubts

The primary objective of any buyer at a Section 363 sale, whether one purchasing for cash or an existing secured creditor making a credit bid, is to obtain good title to the purchased assets free and clear of any liens, claims, or interests. However, a recent decision on this subject by the Bankruptcy Appellate Panel (“BAP”) of the United States Court of Appeals for the Ninth Circuit is causing something of a stir in the bankruptcy world.

In Clear Channel Outdoor, Inc. v. Knupfer (In re PW, LLC), the Ninth Circuit BAP held that a senior secured creditor’s credit bid, in an amount less than the aggregate value of all liens against the property in question, did not satisfy the requirements of Section 365(f) and permit the sale to be “free and clear” of the existing junior liens on the property and reversed the bankruptcy court’s order on appeal. You can read the entire opinion by following the link in this sentence.

For an excellent discussion of the decision and the analysis employed by the BAP, be sure to read Steve Jakubowsi’s post on the case over at The Bankruptcy Litigation Blog. Instead of covering the same ground, I want to discuss some of the implications of the decision for Section 363 bankruptcy sales.

Credit Bid Or Foreclosure? First, the Clear Channel decision raises questions about how a senior secured creditor should proceed in a bankruptcy case.

  • On the one hand, the BAP’s decision that a sale will not be “free and clear” of junior liens is not that surprising. It has generally been accepted that for a “short sale” under Section 363 (one in which the purchase price is less than the amount of liens against the property) to be free and clear of liens, the secured creditors must consent or one of the other exceptions under Section 363(f) must be satisfied. Those other exceptions include a lien subject to “bona fide” dispute or a situation in which the lien holder can be forced to accept a cash payment in satisfaction of the lien.
  • What has surprised some about this new decision is the holding that a credit bid by a senior secured creditor also cannot be made free and clear of junior liens, even though the senior secured creditor could have wiped out the junior liens through a foreclosure under state law.
  • Section 363(f)’s focus on the “aggregate value of all liens on such property” makes the existence of junior liens the issue, regardless of whether they are in the money. Put differently, even if the junior liens are worthless, they exist and a Section 363 sale to a credit bidding senior secured creditor will not be free and clear of those junior liens.
  • With the enormous increase in second lien lending over the past several years, including many second lien loans made as part of private equity buyouts, expect to see more Chapter 11 bankruptcy cases in which substantial junior liens are present.

This ruling seems to leave secured creditors seeking to take title to their collateral with two main choices. One is to seek relief from the automatic stay to foreclose on its collateral, avoiding the Section 363 sale and credit bid approach altogether. If the assets cannot be sold for cash in an amount greater than the senior secured creditor’s claim, and if a reorganization is not reasonably in prospect (the key factors in a bankruptcy court’s decision whether to lift the stay), this may be the preferred path. A second approach would be to complete the credit bid through a Chapter 11 plan of reorganization, something the Clear Channel court implied was also available. However, some secured creditors may find the delay and expense involved in being a plan proponent problematic. As a plan proponent, the secured creditor would take on the obligation to pay administrative expenses of the estate on the effective date of the reorganization plan, as well as satisfaction of all of the other requirements for confirming a plan.

The Risks Of An Appeal: The Limits Of Section 363(m) And The Mootness Doctrine. Second, perhaps the most important aspect of the Clear Channel decision is the risks it exposes even for “good faith” purchasers in Section 363 sales. Purchasers of assets under Section 363 regularly seek a finding that they are a good faith purchaser because a sale to such a buyer cannot be overturned on appeal. This protection is found in Section 363(m) and reads as follows:

The reversal or modification on appeal of an authorization under subsection (b) or (c) of this section of a sale or lease of property does not affect the validity of a sale or lease under such authorization to an entity that purchased or leased such property in good faith, whether or not such entity knew of the pendency of the appeal, unless such authorization and such sale or lease were stayed pending appeal.

Here, the BAP held that although the sale itself to the senior secured creditor could not be overturned on appeal, the protection of Section 363(m) did not extend to the question of whether the sale was made “free and clear” of the junior liens. Instead, the BAP ruled that even in the absence of a stay pending appeal, the appellate court could reverse the “free and clear” determination because Section 363(m) is expressly limited to sale orders under Sections 363(b) and (c), which authorize the sale or lease of property, and does not extend to “free and clear” orders under Section 363(f).

Going hand in hand with the Section 363(m) ruling was the decision’s holding that the closing of the asset sale did not render the “free and clear” issue moot. Instead, even though no stay pending appeal was obtained, the BAP concluded that relief could still be granted on the “free and clear” question by ordering that the junior lien remained attached the property even after its sale.

When Should A Buyer Close The Sale? The Section 363(m) and mootness rulings raise issues about when a buyer of assets under Section 363 should close on the sale. The BAP’s views on Section 363(m) and mootness do not appear limited to the credit bid situation involved in the Clear Channel decision. Instead, if a good faith purchaser for cash pays less than the “aggregate value of all liens” against the purchased assets — or perhaps a question exists whether a lien or interest is really in “bona fide” dispute — the “free and clear” aspect of the sale may be outside the protection of Section 363(m) and an appeal by a secured creditor or other interest holder may not be moot.

  • Buyers usually prefer to close as soon as possible after entry of a bankruptcy court’s order approving the sale, especially if the value of the assets are declining or the debtor is running out of cash.
  • A buyer that closes with an appeal threatened runs the risk of having the “free and clear” decision overturned months or even years later and the purchased assets suddenly subject to the debtor’s liens.
  • While every sale objection or appeal will not raise these issues, if a serious objection to the “free and clear” aspect of the bankruptcy court’s sale order has been made, and the objector is likely to appeal, the buyer should consider whether to wait until the later of (a) the passage of the 10-day appeal period, or (b) a final appellate decision affirming the bankruptcy court’s denial of the objection, before agreeing to close the sale.
  • Buyers may want to consider including provisions in the asset purchase agreement to permit this type of flexibility on when to close or to terminate the agreement if the closing is substantially delayed.

The Precedential Effect Of A BAP Decision. Unlike a U.S. Court of Appeals itself, a BAP is made up of bankruptcy judges, not federal circuit judges. Given a BAP’s place in the judicial system’s hierarchy, its decisions are not given the same precedential weigh as U.S. Court of Appeals decisions, and this means that the U.S. Court of Appeals for the Ninth Circuit might reach a different conclusion. Moreover, BAP decisions generally are not binding on bankruptcy courts in the Ninth Circuit. That said, some bankruptcy judges make a practice of following BAP decisions and the BAP’s reasoning may influence other judges.

Conclusion. The BAP’s Clear Channel decision has important implications for Section 363 asset sales. Secured creditors intent on making a credit bid may now rethink that approach when junior liens are present. Cash buyers may be more cautious on when to close a sale if disputes exist over whether the sale should be “free and clear” of existing liens and interests. It will be interesting to see how other courts, in the Ninth Circuit and beyond, react to the decision, so stay tuned.

Recent Developments The Financially Troubled Company

Recent California Decision Addresses Whether Directors And Officers Can Be Liable For Unpaid Wages Of A Bankrupt Company

When insolvent companies are unable to make payroll or to pay accrued vacation or other amounts owed employees, the question often arises whether directors, officers, or shareholders face personal liability for these unpaid amounts. The California Court of Appeal recently addressed that issue, examining whether particular sections of the California Labor Code, as well as section 17200 of the Business and Professions Code (California’s unfair competition law), impose personal liability.

The Court of Appeal Decision. In its April 2008 decision in Bradstreet v. Wong, the Court of Appeal for the First Appellate District held that owners, officers, and managers of an insolvent company, which later filed bankruptcy, were not personally liable for unpaid wages, overtime, vacation pay, and other amounts based on a series of alleged California Labor Code violations. The Court also ruled that these individuals were not liable to pay restitution under Business and Professions Code section 17200. A copy of the Court of Appeal’s opinion is available here.

Risks Remain. Although the decision is a favorable one for officers and directors, risks remain. Be sure to read the informative discussion written by my colleagues in the Employment & Labor Group at Cooley Godward Kronish LLP for a careful analysis of the decision. As they explain, despite this new decision, and the California Supreme Court’s 2005 decision on similar issues in the Reynolds v. Bement case, it’s possible that directors and officers may still face a risk of individual liability under other California Labor Code sections or based on different legal theories. Depending on the facts and statutes involved, there may also be individual liability under federal law or the laws of other states.

Get Advice. The issues presented when an insolvent company is, or might be, unable to pay wages are complicated. Directors and officers of a company facing this situation should be sure to get both insolvency and employment law advice to help guide them, and the company, through these difficult straits.

Business Bankruptcy Issues Recent Developments

Supreme Court Decision Settles The Section 1146(a) Transfer Tax Exemption Issue

On June 16, 2008, the United States Supreme Court issued its decision in Florida Dept. of Revenue v. Piccadilly Cafeterias, Inc., the case involving whether Section 1146(a) of the Bankruptcy Code, which exempts from stamp or similar taxes any asset transfer “under a plan confirmed under section 1129 of the Code,” applies to transfers of assets occurring prior to the actual confirmation of such a plan. The issue has taken on added importance in recent years because so many sales of assets in Chapter 11 bankruptcy cases — including the one in the Piccadilly case — are made through Section 363, well before any plan of reorganization is confirmed.

(For more background on the issue, and the oral argument before the Supreme Court last March, you can read a prior post entitled "What Happened At the Supreme Court Oral Argument In The Section 1146(a) Transfer Tax Exemption Case?")

The Supreme Court’s Holding. In a 7-2 decision written by Justice Clarence Thomas, the Supreme Court held that Section 1146(a) applies only to post-confirmation transfers made under the authority of a confirmed plan of reorganization. Follow the link for a copy of the Supreme Court’s decision. The Court reversed the Eleventh Circuit (opinion below available here), which unlike the Third and Fourth Circuits, had held that pre-confirmation transfers could also be covered by the exemption. The Supreme Court summed up its holding as follows:

The most natural reading of §1146(a)’s text, the provision’s placement within the Code, and applicable substantive canons all lead to the same conclusion: Section 1146(a) affords a stamp-tax exemption only to transfers made pursuant to a Chapter 11 plan that has been confirmed. Because Piccadilly transferred its assets before its Chapter 11 plan was confirmed by the Bankruptcy Court, it may not rely on §1146(a) to avoid Florida’s stamp taxes. Accordingly, we reverse the judgment below and remand the case for further proceedings consistent with this opinion.

Keys To The Decision. In examining the statute and the parties’ arguments, the Supreme Court found Florida’s reading of the statute far more reasonable:

While both sides present credible interpretations of §1146(a), Florida has the better one. To be sure, Congress could have used more precise language—i.e., “under a plan that has been confirmed”—and thus removed all ambiguity. But the two readings of the language that Congress chose are not equally plausible: Of the two, Florida’s is clearly the more natural. The interpretation advanced by Piccadilly and adopted by the Eleventh Circuit—that there must be “some nexus between the pre-confirmation transfer and the confirmed plan” for §1146(a) to apply, 484 F. 3d, at 1304—places greater strain on the statutory text than the simpler construction advanced by Florida and adopted by the Third and Fourth Circuit.

Later, the Court added the following:

Even if we were to adopt Piccadilly’s broad definition of “under,” its interpretation of the statute faces  other obstacles. The asset transfer here can hardly be said to have been consummated “in accordance with” any confirmed plan because, as of the closing date, Piccadilly had not even submitted its plan to the Bankruptcy Court for confirmation. Piccadilly’s asset sale was thus not conducted “in accordance with” any plan confirmed under Chapter 11. Rather, it was conducted “in accordance with” the procedures set forth in Chapter 3—specifically, §363(b)(1). To read the statute as Piccadilly proposes would make §1146(a)’s exemption turn on whether a debtor-in-possession’s actions are consistent with a legal instrument that does not exist—and indeed may not even be conceived of—at the time of the sale. Reading §1146(a) in context with other relevant Code provisions, we find nothing justifying such a curious interpretation of what is a straightforward exemption.

In dismissing another of Piccadilly’s arguments, the Court had occasion to make an interesting comparison between the mechanics of assumption and rejection of executory contracts and the timing of a transfer for Section 1146(a) purposes:

We agree with Bildisco’s commonsense observation that the decision whether to reject a contract or lease must be made before confirmation. But that in no way undermines the fact that the rejection takes effect upon or after confirmation of the Chapter 11 plan (or before confirmation if  pursuant to §365(d)(2)). In the context of §1146(a), the decision whether to transfer a given asset “under a plan confirmed” must be made prior to submitting the Chapter 11 plan to the bankruptcy court, but the transfer itself cannot be “under a plan confirmed” until the court confirms the plan in question. Only at that point does the transfer become eligible for the stamp-tax exemption.

The Court also found that the placement of Section 1146(a) in a subchapter entitled "POSTCONFIMRATION MATTERS" was yet another factor which, while not decisive, helped to undermine Piccadilly’s arguments.

Canon Fodder. The Court next held that even if the statute were ambiguous, which the Court did not expressly decide, two canons of statutory interpretation would compel a decision in favor of Florida’s reading of the statute.

  • First, changes were made to Section 1146 as recently as the 2005 amendments to the Bankruptcy Code, and Congress is generally presumed to be aware of judicial interpretations of a statute (here decisions from the Third and Fourth Circuits refusing to apply the exemption to pre-confirmation transfers, both of which predated the Eleventh Circuit’s 2007 decision in Piccadilly) when the statute was revised.
  • Second, a federalism canon directs courts to proceed carefully before recognizing an exemption from state taxation that Congress has not clearly expressed. Given Piccadilly’s arguments that the statute was ambiguous, the Court found this canon to be "decisive in this case."
  • The Court rejected the canons advanced by Piccadilly, most notably viewing Chapter 11 (and Section 1146) as a remedial statute to be liberally construed to facilitate reorganizations.

The Dissent. Justice Stephen G. Breyer, in a dissent joined by Justice Stevens, focused on "whether the time of the transfer matters." Finding the language of the statute ambiguous, he looked to the policy Congress was trying to implement with the statute. He concluded that Congress would not have "insisted upon temporal limits" in Section 1146(a) since, in his view, "it makes no difference whether a transfer takes place before or after the plan is confirmed."

Other Bloggers Weigh In. For an excellent and entertaining review of the decision, be sure to read Steve Jakubowski’s post on his Bankruptcy Litigation Blog. Hat tip as well to the SCOTUS Blog for first reporting on the decision (and updating its excellent wiki on the case) and to the Delaware Business Bankruptcy Report for its post as well.

Minor Impact On Chapter 11 Cases? Of course, the most immediate impact of the decision is that pre-confirmation Section 363 sales will no longer be exempt from stamp or transfer taxes in any circuit, and those taxes will have to be paid.  What remains to be seen is whether sales will be delayed until plan confirmation in order to take advantage of the Section 1146(a) exemption. Given how many asset sales in Chapter 11 cases these days are conducted at the early stages of a case because of financing limitations and declining asset values, a move to delay those sales until plan confirmation seems unlikely. With an economic downturn upon us, the pressures that have led to the expanded use of Section 363 are not likely to abate, regardless of how attractive a stamp or transfer tax exemption may be.