"“It’s the Cadillac of . . .” Chilli Palmer. Traditionally, discharge has been regarded as the “Cadillac” of success in bankruptcy. Getting a discharge is as good as it can get.
When an individual debtor files for Chapter 7 or Chapter 13 and receives a discharge then, in the language of the South, the attorney for that individual has “done good.” Or, in more academic verbiage, the lawyer has achieved Chapter 7 and Chapter 13’s “end goal.” Similarly, if a business entity files for Chapter 11 and its plan is confirmed which triggers a discharge, the attorney for the business has “done good.” As Professor LoPucki more eloquently put it, “provisions of Chapter 11 treat confirmation as a systems goal.”
But now when a business entity files for Chapter 11 to sell its business under § 363 of the Bankruptcy Code, then increasingly the attorney for the buyer has done better than good. The order that the buyer gets from buying the assets of a debtor’s business in bankruptcy can be better than the discharge a debtor gets from having its Chapter plan confirmed.
This article will show the ways that, under various decisions of bankruptcy courts, district courts, and circuit courts, a § 363 sale order provides greater relief for a buyer of a business in bankruptcy than a discharge order can provide for any debtor who files for bankruptcy relief. And, we will examine the statutory and policy bases for these decisions." [..]
David G. Epstein & Tevin Bowens, Better Than a Discharge, 71 Syracuse L. Rev. 443 (2021).