Section 363 Motion to Sell or License Data: Counsel's Checklist

This checklist is for debtor's counsel (and trustee's counsel) preparing to seek approval of a sale or license of the debtor's data. It isn't a form, and local rules and chambers procedures control. Use it to make sure nothing gets missed.

General information for practitioners, not legal advice.

Before drafting

Confirm the data is property of the estate (§ 541) and identify any third-party claims to it.
Decide the structure: non-exclusive license, exclusive license, or sale.
Confirm the transaction is outside the ordinary course (almost always for data) and requires § 363(b) approval.
Review the DIP order, cash-collateral order and budget for treatment of non-ordinary-course proceeds and any milestones.
Review lender collateral descriptions for general intangibles; seek consent or plan for § 363(f).
Pull the privacy policy in effect on the petition date and earlier versions as relevant.
Identify customer contracts, NDAs and DPAs that restrict data use.
Decide private sale vs. bid procedures and auction.
Consider whether any broker or advisor needs retention approval (§§ 327, 328) and how fees will be disclosed.
Check local rules for sale motions, shortened notice, and sale-order requirements.

The motion

Relief requested: authority to enter into and perform the agreement.
Description of the debtor's business and why the data exists.
Description of the asset: systems, date ranges, approximate volume.
Exclusions: privileged material, consumer PII (if excluded), contractually restricted data, HR and health records.
De-identification method, in plain terms.
Marketing process: who was contacted, how, how many offers, why the selected offer is highest or best.
Business justification: liquidity, runway, plan funding; no impairment of going-concern value.
§ 363(f) basis if selling free and clear, with liens attaching to proceeds.
§ 363(b)(1) privacy analysis: not triggered (no PII transferred), consistent with policy, or ombudsman requested under § 332.
§ 363(m) good-faith request, with facts on arm's-length negotiation and no insider relationship.
§ 363(n): no collusion among bidders.
Treatment of proceeds, consistent with DIP and cash-collateral orders.
Fees and expenses disclosed.
Request to waive the Rule 6004(h) 14-day stay, with a reason, if needed.
Notice: parties served and the notice period (Rule 2002(a)(2) generally 21 days), or a request to shorten.

The supporting declaration

Usually from the debtor's financial officer or CRO, sometimes with a second declaration from the party that ran the marketing process:

Foundation for the declarant's knowledge.
Inventory of systems and data.
The marketing record and offer summary (consider filing confidential terms under seal if justified under § 107).
De-identification method and quality checks.
Buyer's identity and the absence of insider connections.
Use restrictions and re-identification prohibitions in the agreement.

The agreement

Parties: the debtor (or trustee) and the buyer.
Conditioned on entry of a sale order.
Scope: included systems, date ranges, exclusions schedule.
License terms: non-exclusive or exclusive, field, duration, sublicensing.
Use restrictions; no re-identification; security; deletion on termination.
Delivery mechanics after the order.
Price and payment to the estate.
Representations limited appropriately for a debtor ("as is," limited survival).
Governing law and bankruptcy court jurisdiction over disputes.

The proposed order

Approves the agreement and authorizes performance.
Finds notice adequate.
Finds sound business judgment and fair value.
Finds good faith under § 363(m).
Addresses privacy (§ 363(b)(1)) and any ombudsman recommendations.
Free and clear findings and attachment of liens to proceeds, if applicable.
Directs treatment of proceeds.
Waives Rule 6004(h) stay, if requested and granted.
Retains jurisdiction.

Objection prep

Likely objector	Likely issue	Have ready
Secured lender	Collateral, proceeds	Consent or § 363(f) basis; proceeds plan
Committee	Price, process	Offer summary; marketing record
U.S. Trustee	Privacy, fees, notice	Privacy analysis; fee disclosure
Customers	Confidentiality	Exclusion schedule; contract review
Ombudsman	Consumer privacy	Method; data map

After entry

Confirm the stay has expired or was waived.
Deliver per the agreement; obtain payment to the estate.
Report the receipt in monthly operating reports.
Track buyer's deletion obligations if any.

We provide templates of the asset description, marketing record, privacy memo and declaration for counsel's review and revision. Download the counsel brief for a two-page summary.

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This guide is general information, not legal, tax or financial advice, and reading it does not create an attorney-client relationship. Bankruptcy outcomes depend on the facts, the court and the parties; nothing here promises price, timing or court approval. Talk to your bankruptcy counsel about your case.