In order to qualify as a good faith purchaser, one must buy:

GE claimed that the Bankruptcy Court used the wrong legal standard in determining that Hilco was a good faith purchaser. Specifically, GE claimed that the use of a public auction to establish value was improper, and instead value must equate to a certain percentage of the asset's market price. However, since it was clear that there was no collusion, fraud or other impropriety, the District Court found that the Bankruptcy Court did not err in holding that the auction was sufficient to establish value for the trucks.

In addition, the District Court found evidence that the assets were sold pursuant to a competitive auction, including, among other things, the fact that GE had the opportunity to object to the bidding procedures and auction process, but did not participate and that Hilco was outbid on other lots at the auction.

The District Court also explained that the price paid by Hilco did not constitute an "unconscionable windfall," as it was calculated to provide a Hilco with a profit and account for the risks of the transaction, after considering the various conditional, non-binding offers it received for the trucks, ranging from $260,000 to $473,000. Therefore, the Bankruptcy Court did not err in determining that Hilco's bid was not so inadequate that it should be set aside.

As a result of the above findings, the District Court concluded that the Bankruptcy Court correctly determined that a public auction, conducted in accordance with court-approved procedures and without fraud or collusion is compelling evidence of value, and therefore Hilco was a good faith purchaser for value under section 363(m) of the Bankruptcy Code.

A valid sale requires proper notice. GE argued that notice of the auction was not sufficient because:

Addressing GE's first argument, the District Court ruled that in this case, it was reasonable under the circumstances for PC to notify local counsel instead of GE's lead counsel, such that these notices were served consistent with Federal Rules of Bankruptcy Procedure. The fact that local counsel was precluded by GE from reviewing the notices was immaterial to whether PC complied with the Bankruptcy Code's statutory notice provisions.

For GE's second claim, the District Court found that because PC presented credible evidence that notice was sent, and GE failed to provide clear and convincing evidence to rebut the presumption of receipt, notice was presumed to be received.

Finally, the District Court explained that while GE was correct that generally, 21 days notice is required for parties with an interest in the sale of assets outside the ordinary course of business, an exception exists allowing a court to shorten the time "for cause." In this case, the Bankruptcy Court shortened the required time period in order to best meet the needs of all parties involved after specifically finding that all creditors had received sufficient notice of the Auction Order and the Notice of Intent. Since there were other similarly situated creditors who did participate in the auction, the Bankruptcy Court correctly concluded that adequate time was given for creditors to respond and participate in the auction.

As a result of the above findings, the District Court held that notice was sufficient under the circumstances and therefore that GE's due process rights were not violated.

For the first time on appeal, GE raised the argument that the sale of its collateral was not valid under section 363(b) and (f) of the Bankruptcy Code. The District Court held that, because GE failed to raise this issue in the Bankruptcy Court, it was not preserved on appeal.

Also for the first time on appeal, GE claimed that the Bankruptcy Court erred in permitting PC to extract a carve-out from the proceeds of the sale without first obtaining its consent as the affected secured creditor. The District Court held that, because GE failed to raise this issue in the Bankruptcy Court, it was not preserved on appeal. However, the Court observed that the issue of the carve-out had no effect on Hilco's rights under the Sale Order since the carve-out only concerned funds in the trustee's possession. In addition, since GE received adequate notice of the sale and had the opportunity to oppose the carve-out, GE's failure to object in connection with Hilco's purchase, or to otherwise participate in the bankruptcy court proceedings, constituted a waiver. Therefore, the carve-out in this case was appropriately approved by the Bankruptcy Court.