Automobile Bankruptcies, Retiree Benefits, And The Futility Of Springing Priorities In Chapter 11 Reorganizations

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The strategic use of section 363 asset sales in reorganization cases is becoming so common that some courts and commentators predict that the asset-sale route to a chapter 11 plan confirmation may soon supplant the traditional chapter 11 plan processes. While some have decried section 363 sales as contrary to the voting system and other procedural safeguards inherent in a standard chapter 11 confirmation, this Essay argues that the section 363 asset-sale development is a natural consequence of the Bankruptcy Code being weighed down by a "Springing" (or bankruptcy-only) priority of retiree medical benefits.