In the

United States Court of Appeals

For the Seventh Circuit ____________________

No. 17-1575

ILLINOIS DEPARTMENT OF REVENUE,

Appellant,

v.

HANMI BANK AND EUGENE CRANE, TRUSTEE,

Appellees.

____________________

Appeal from the United States Bankruptcy Court for the

Northern District of Illinois, Eastern Division.

No. 12-49658 — Timothy A. Barnes, Bankruptcy Judge.

____________________

No. 17-2004

ILLINOIS DEPARTMENT OF REVENUE,

Appellant,

v.

FIRST COMMUNITY FINANCIAL BANK,

Appellee.

____________________

Appeal from the United States Bankruptcy Court for the

Northern District of Illinois, Eastern Division.

No. 15-05384 — A. Benjamin Goldgar, Bankruptcy Judge.
2 Nos. 17-1575 & 17-2004

____________________

ARGUED DECEMBER 1, 2017 — DECIDED JULY 9, 2018

____________________

Before BAUER, FLAUM, and ROVNER, Circuit Judges.

ROVNER, Circuit Judge. The bankrupt businesses in both of 

these consolidated appeals had debts that far exceeded the 

value of their assets. The bankruptcy court authorized the sale 

of the firms’ principal assets (several gasoline service stations 

and a movie theater and café), and those sales qualified as 

bulk sales under Illinois statutes we shall refer to as the Bulk 

Sales Provisions. Among other things, the Bulk Sales Provisions give the Illinois Department of Revenue (“IDOR”) the 

right to pursue the purchaser in a bulk sale for state taxes 

owed by the seller. However, in order to facilitate sale of the 

debtors’ properties, the bankruptcy court, pursuant to section 

363(f) of the Bankruptcy Code, allowed the sales to proceed 

free and clear of the interests in those properties held by any 

entity other than the bankruptcy estates, including IDOR’s interest under the Bulk Sales Provisions. 11 U.S.C. § 363(f). This 

meant that IDOR lost its right to impose successor liability on 

the purchasers for the taxes owed by the sellers. Pursuant to 

section 363(e) of the Code, a party whose interest has been removed from property in this way is entitled to “adequate protection,” which typically takes the form of a payment from the 

sale proceeds to compensate the party for the decrease in 

value of its interest. See id. §§ 361, 363; Precision Indus., Inc. v. 

Qualitech Steel SBQ, LLC, 327 F.3d 537, 548 (7th Cir. 2003). The 

bankruptcy court in each case below agreed or assumed that 

IDOR was entitled to adequate protection for its interest under section 363. But the court also went on to conclude that 
Nos. 17-1575 & 17-2004 3

because the sale proceeds were insufficient to satisfy the 

claims of the senior-most creditors (the banks that held the 

mortgages on the properties), IDOR was entitled to no portion 

of the sale proceeds; to grant IDOR any share in those proceeds would be to impermissibly allow it to “jump the queue” 

of creditors. And because there were no other assets available 

from which to compensate junior creditors like IDOR, IDOR 

was left with nothing.

IDOR contends that the bankruptcy court’s disposition 

fails to account for its authority, which other creditors did not 

enjoy, to pursue not only the debtor but the purchaser of the 

debtors’ property—personally—for unpaid taxes. When the 

bankruptcy court authorized the sale of the debtors’ properties in these cases free and clear of IDOR’s interest, it made the 

properties much more attractive to prospective purchasers 

than they otherwise would have been. Consequently, in 

IDOR’s view, the final sale price for the properties necessarily 

included consideration for the removal of IDOR’s interest, 

and it is entitled to a share of the sale proceeds pursuant to 

sections 361 and 363(e) to compensate it accordingly.

For the reasons that follow, we affirm the bankruptcy 

court’s judgments. We agree with IDOR that the Bulk Sales 

Provisions give it a powerful means of securing payment for 

delinquent taxes that most other creditors lack, and that removal of IDOR’s interest likely increased the price bidders 

were willing to pay for the debtors’ properties in these cases. 

But assuming that IDOR’s interest is cognizable under section 

363, it has not given us a realistic assessment of the value of 

its interest. IDOR’s position in these appeals is that it is entitled to a share of the sale proceeds equal to 100 percent of the 

taxes it was authorized to collect from the purchasers, given 
4 Nos. 17-1575 & 17-2004

that it was forced to give up its right to pursue the purchasers

for those taxes. As we explain, however, we are skeptical of 

the notion that IDOR necessarily would have recovered 100 

percent of the tax delinquency from an informed purchaser; 

and although IDOR might have been able to strike a deal with 

the purchaser and the seller’s senior creditors giving it some 

lesser payment on the outstanding taxes, IDOR has offered no 

evidence to establish what its potential recovery might have 

been. In short, its claims were properly denied for want of evidence enabling the bankruptcy court to assign a reasonable 

value to its interest for purposes of section 363(e). 

I.

These appeals involve two different sets of debtors. The 

Elk Grove debtors owned and operated five BP gas stations in 

Elk Grove Village and other Chicago suburbs. Hanmi Bank, 

formerly known as United Central Bank (hereinafter, “UCB”), 

held mortgages on the real properties along with security interests in the personal property at each location. The Naperville debtor operated a cinema and adjoining café in the Chicago suburb of Naperville. First Community Financial Bank 

(“First Community”) held the mortgage on these properties.

The debtors initially sought relief under Chapter 11 of the 

Bankruptcy Code. In each instance, the debtors’ outstanding 

liabilities substantially exceeded the value of their assets. The 

Elk Grove debtors owed north of $14 million to UCB, and the 

Naperville debtor owed just under $4 million to First Community. Both debtors also owed substantial Illinois taxes to 

IDOR: the Elk Grove debtors owed the state more than $1.8 

million in sales, employee withholding, and motor fuel taxes 

(approximately $1.38 million of which was secured by liens 

on the debtors’ properties) and the Naperville debtor owed 
Nos. 17-1575 & 17-2004 5

nearly $600,000 in sales and withholding taxes (none of which 

was secured by liens). In the Elk Grove proceeding, a trustee 

was appointed at the request of the creditors. 

The Elk Grove trustee and the Naperville debtor both 

sought the bankruptcy court’s approval pursuant to section 

363(b) and (f) of the Bankruptcy Code to sell the debtors’ principal assets—the gas stations and the theater/café—free and 

clear of all liens, claims, encumbrances, and interests held by 

entities other than the estate. In each instance, IDOR contended that to the extent the court deemed its right to impose 

successor tax liability on the purchaser of the property an “interest” that could be extinguished pursuant to section 363(f), 

the court should set aside a portion of the sale proceeds sufficient to satisfy the outstanding tax obligations as “adequate 

protection” for IDOR’s interest pursuant to section 363(e), regardless of the fact that IDOR’s claims against the debtor were 

junior to those of the banks. In both cases, that request was 

denied.

In the Elk Grove case, Judge Barnes denied the set-aside 

request but directed the trustee to hold the proceeds of the 

sale subject to a further order of the court, so that IDOR’s 

right, if any, to a share of the sale proceeds could be assessed. 

After the sale of the gas stations closed, yielding net proceeds 

of roughly $5.23 million, UCB asked that its secured claim 

against the estate be allowed and that the full proceeds of the 

sale be turned over to it (recall that the debtors owed UCB 

more than $14 million in total). IDOR objected to UCB’s request, insofar as it sought the turnover of all proceeds to UCB, 

and asked that a portion of the proceeds equal to the amount 

of unpaid taxes that IDOR could have collected from the purchaser pursuant to the Bulk Sales Provisions—roughly $1.53 
6 Nos. 17-1575 & 17-2004

million—be turned over to IDOR first, with the remainder going to UCB.1 IDOR contended that its interest in the sale proceeds was effectively superior to UCB’s in view of the fact that 

IDOR had the authority—before the bankruptcy court allowed the sale free and clear of all interests—to hold the purchaser of the property personally liable for the unpaid taxes. 

In IDOR’s view, because it was entitled to “adequate protection” for its interest pursuant to section 363(e), it was owed 

full recompense for the taxes it was owed.

Judge Barnes allowed UCB’s claim in full and denied the 

relief that IDOR requested. In re Elk Grove Vill. Petroleum, 510 

B. R. 594 (Bankr. N.D. Ill. 2014) (“Elk Grove I”). He determined 

that UCB had a secured claim that exceeded by some $8 million the amount of the sale proceeds; that IDOR had a partially secured but junior claim of $1.88 million (secured by 

liens to the extent of $1.38 million); that IDOR’s successor liability claims under the Bulk Sales Provisions constituted an 

“interest” that could be extinguished in the sale of the gas stations pursuant to section 363(f); but that IDOR’s interest had 

not decreased in value by virtue of the sale, such that it would 

be entitled to adequate protection under section 363(e), because that interest was inferior to UCB’s security interest both 

before and after the sale. Id. at 603–05. Judge Barnes acknowledged that, by virtue of the court’s free-and-clear order under 

 1 The figure of $1.53 million to which IDOR claimed it was entitled was 

less than the total of $1.88 million in unpaid taxes it was owed by the Elk 

Grove debtors. As we discuss below, the Bulk Sales Provisions cap a purchaser’s liability for the unpaid taxes at the reasonable value of the property, which would normally be reflected in the sales price of the property. 

The taxes owed by one of the five gas stations substantially exceeded the 

sales price for that station. Consequently, as to that station, the purchaser’s 

prospective liability for the delinquent taxes was capped by the sales price.
Nos. 17-1575 & 17-2004 7

section 363(f), IDOR had lost the ability to pursue the purchaser of the property for the unpaid taxes. Id. at 605. But 

other creditors with liens on the debtors’ property had likewise lost the ability to enforce those liens against the purchaser of the property. Had the sale taken place with all such 

liens, encumbrances, and interests in place, IDOR still would 

have taken nothing, the court believed, as a creditor whose 

claims were inferior to those of the bank. Id. (The judge did 

not consider IDOR’s right to pursue the purchaser personally 

for the delinquent taxes.) Thus, IDOR’s interest had not, in 

practical terms, decreased in value by virtue of the court’s 

free-and-clear order. “IDOR was out of the money prior to the 

[s]ale and would remain out of the money subsequent to the 

[s]ale, whether or not section 363(f) is applied.” Id. Therefore, 

IDOR was not entitled to adequate protection under section 

363(e) in the form of compensation from the sale proceeds. 

In the Naperville case, Judge Goldgar simply overruled 

the debtor’s request outright. Recall that First Community 

was owed $3.92 million on the loans it had made to the Naperville debtor, and First Community, by virtue of the promissory notes underlying those loans, had a first-priority security interest in the debtor’s property. IDOR, for its part, had 

an unsecured claim in the amount of $593,000 for unpaid sales 

and withholding taxes. When the debtor sought the court’s 

approval to sell its property, IDOR filed a limited objection to 

the sale, insisting that it was entitled to direct payment from 

the sale proceeds pursuant to section 363(e) as adequate protection of its interest under the Bulk Sale Provisions. Absent 

assurance of such payment, IDOR argued, the sale could not 

be approved. Looking to Judge Barnes’ decision in Elk Grove 

I, Judge Goldgar overruled the objection, authorized the sale 

of the debtor’s property, and allowed First Community to 
8 Nos. 17-1575 & 17-2004

take and apply the proceeds (after certain fees and carve-outs) 

to the debt it was owed. In re Naperville Theater, LLC, No. 15 B 

05384, R. 127 at 7, 23. As in the Elk Grove case, IDOR would 

take nothing from the sale proceeds. The Naperville case, like 

the Elk Grove Village case before it, was later converted to a 

Chapter 7 proceeding and a trustee was appointed.

IDOR appealed in both cases. In the Elk Grove case, Judge 

Blakey vacated the bankruptcy court’s order in part. Ill. Dep’t 

of Revenue v. Elk Grove Vill. Petroleum, 541 B.R. 673 (N.D. Ill. 

2015) (“Elk Grove II”). As the appellees did not dispute the 

point, Judge Blakey assumed that IDOR’s right to impose successor liability on a bulk-sale purchaser for delinquent taxes 

constituted an interest warranting recognition and protection 

pursuant to section 363. Id. at 676. He therefore focused on 

whether that interest had any concrete value for which IDOR 

was entitled to protection under section 363(e). Judge Blakey 

noted that the “adequate protection” called for by section 

363(e) is intended to prevent—i.e., compensate for—a decrease in value of the creditor’s interest in property that has 

been extinguished pursuant to section 363(f). Id. at 677 (citing 

§ 361). That decrease is properly calculated by comparing 

what the creditor will recover in bankruptcy where its interest 

in property has been extinguished pursuant to section 363(f) 

with what its recovery would have been had its interest remained intact. Id. at 678. As to the first question, the judge 

agreed that UCB’s interest was superior to that of IDOR and 

the Bulk Sales Provisions did not permit IDOR’s interest to 

jump ahead of UCB in the queue of creditors and have first 

bite at the sale proceeds. Id. But as to the second question, 

Judge Blakey was not convinced that IDOR again would have 

been left “out of the money” (as Judge Barnes had assumed) 
Nos. 17-1575 & 17-2004 9

had the sale taken place subject to IDOR’s interest. Notwithstanding the fact that UCB had a superior claim to the sale 

proceeds themselves, the Bulk Sale Provisions gave IDOR the 

right to look beyond those proceeds and pursue the purchaser 

personally for the unpaid taxes. Thus, allowing the sale free 

and clear of IDOR’s interest indeed may have caused its interest to decrease in value, as it eliminated IDOR’s ability to hold 

the purchaser personally liable for the taxes. To that extent, 

IDOR might be entitled to compensation. Id. at 679. The court 

remanded the matter for development of the record and resolution of two issues: (1) what IDOR would have recovered 

from the purchaser had the service stations not been sold free 

and clear of its interest under the Bulk Sales Provisions; and 

(2) by what means IDOR could be compensated for the value 

of this interest pursuant to section 363(e) given, inter alia, the 

relative priority of UCB’s liens on the property and the depletion of estate assets. Ill. Dep’t of Revenue v. Elk Grove Vill. Petroleum, LLC, 2015 WL 8481961, at *4 (N.D. Ill. Dec. 9, 2015) (“Elk 

Grove III”). 

On remand, the bankruptcy court again denied IDOR relief upon addressing the two issues the district court had 

tasked it to consider. In re Elk Grove Vill. Petroleum, LLC, 562 

B.R. 708 (Bankr. N.D. Ill. 2016) (“Elk Grove IV”). In valuing 

IDOR’s interest, Judge Barnes drew a distinction between the 

calculable value and realizable value of the interest. The interest had a nominal, calculable value of $1.53 million—i.e., the 

amount that IDOR theoretically could collect from the purchaser pursuant to the Bulk Sales Provisions, see n.1, supra—

but in the judge’s view, the realizable value of the interest was 

effectively zero, as there was no realistic possibility that IDOR 

would ever have been able to collect on the unpaid taxes notwithstanding its rights vis-à-vis the purchaser. So far as the 
10 Nos. 17-1575 & 17-2004

record revealed, the purchaser of the gas stations was a special-purpose entity with no assets other than the purchased 

stations themselves; so, apart from waiting to see if the stations turned a profit in the future, there would be nothing 

other than the properties themselves to which IDOR could 

look as a source of payment. Id. at 719 n.11. And if the stations 

had been sold without a section 363(f) free-and-clear order, 

leaving IDOR’s interest intact, then it was fair to assume that 

UCB’s interest as the debtors’ lender also would have remained intact. Id. at 718–19. Because the purchase price for the 

stations did not come close to paying off the debt to UCB, and 

its interest was senior to that of IDOR, UCB as the senior 

lienholder would have a superior claim against any funds the 

purchaser had set aside on instructions from IDOR to account 

for the delinquent taxes as well as a superior right to enforce 

its liens on the purchaser’s sole asset—the stations themselves. Id. at 720. Once again, IDOR, as the junior creditor, 

would be left with no source of payment for the unpaid taxes. 

Given that IDOR was likely to recover nothing regardless of 

the operation of section 363(f), there was no need to consider 

how, logistically, IDOR could be given adequate protection in 

the form of cash compensation pursuant to section 363(e); its 

interest had not been diminished as a result of the court’s freeand-clear order. Id. IDOR had already been given all the protection to which it was entitled by virtue of the court’s sale 

order, which allowed IDOR’s interest, such as it was, to follow 

the sale proceeds. Id. at 720–21. To the extent IDOR was seeking payment from those proceeds, it was asking the court to 

reorder the creditor queue and give IDOR a first-priority status which the law did not allow:

Nothing in the Sale Order ensured a recovery on 

the preserved interests in the Proceeds. They 
Nos. 17-1575 & 17-2004 11

must still be weighed against the priorities of all 

parties whose interests were also preserved; in 

this case, the priority of the UCB liens that were 

also attached to the Proceeds. By arguing that 

the court must permit IDOR a recovery on the 

preserved interests above that afforded UCB, 

IDOR attempts to use sections 361 and 363(e) to 

afford the IDOR Claims a step up in priority. ... 

Had Congress wanted to upset the Bankruptcy 

Code priority schemes in this respect, it could 

have done so. But nothing in sections 361 or 

363(e) has that effect. Had the court found realizable value for the Successor Liability Interest 

outside of bankruptcy, the court would nonetheless be forced to conclude that, under the 

facts of this case, IDOR has identified no bankruptcy source of recovery for the same.

Id. at 722.

In the Naperville case, Judge Der-Yeghiayan likewise ordered a remand for a determination as to the value of IDOR’s 

interest. In re Naperville Theater, LLC, 2016 WL 930659 (N.D. Ill. 

Mar. 10, 2016). In the absence of a live dispute on the point, 

the court assumed that IDOR’s rights under the Bulk Sales 

Provisions constituted a cognizable interest under section 

363(e) and (f).2 Following Judge Blakey’s decision in Elk Grove 

 2 Judge Der-Yeghiayan assumed that because Judge Goldgar had adopted 

Judge Barnes’ decision in Elk Grove I, he necessarily agreed that IDOR had 

an interest that was cognizable and entitled to adequate protection under 

section 363(e). Naperville Theater, 2016 WL 930659, at *2. Judge Goldgar 

would later clarify, however, that he had not meant to hold that IDOR had 

a protectable interest, but rather had “passed [the issue] by,” as IDOR’s 
12 Nos. 17-1575 & 17-2004

II, Judge Der-Yeghiayan concluded that Judge Goldgar had 

improperly placed the value of IDOR’s interest at zero, which 

did not account for IDOR’s right to pursue the purchaser of 

the debtor’s property personally for the unpaid taxes. Id. at *3. 

It remained for the bankruptcy court to ascertain what value, 

if any, to place on that right, which was extinguished with the 

sale of the debtor’s assets. Id. The court left open the question 

whether IDOR was entitled to any compensation for its interest, believing it “premature” to reach that issue until such 

time as the bankruptcy court had determined what value to 

assign to IDOR’s interest. Id. at *2. 

On remand, Judge Goldgar, like his colleague Judge 

Barnes, concluded that IDOR’s interest had no realizable 

value and that, consequently, IDOR was not entitled to any 

compensation for the extinguishment of its interest. Judge 

Goldgar had convened an evidentiary hearing in order to give 

IDOR the opportunity to put on evidence as to the value of its 

interest. IDOR presented testimony from a representative of 

the buyer of the debtor’s theater and café, who testified in essence that the buyer would not have purchased the estate’s 

assets without the removal of the interests of IDOR and other 

creditors. IDOR thus reasoned that because the extinguishment of its interest (along with those of other creditors) made 

the sale of the debtor’s assets possible, it was entitled to compensation for its interest. But in Judge Goldgar’s view, the relevant question was whether IDOR could, ultimately, have recovered on its interest, and there was “a total failure of proof 

on that point.” In re Naperville Theater, LLC, No. 15 B 05384, R. 

195 at 19. In other words, there was no proof as to the financial 

 

claim could be resolved without deciding that issue. In re Naperville Theater, LLC, No. 15 B 05384, R. 195 at 14. 
Nos. 17-1575 & 17-2004 13

status, assets, or resources of either the entity that had purchased the theater and café from the debtor (Brixmor Holdings 6SPE, LLC), or the entity that had in turn purchased 

those properties from Brixmor (Star Theater). Id. Given the 

lack of proof that IDOR’s interest had any value, the inevitable conclusion was that there was no decrease in the worth of 

its interest and therefore IDOR had no entitlement to compensation pursuant to section 363(e). Id. at 20. “As far as the evidence showed, the Department’s successor liability claim was 

worthless.” Id. at 21. 

IDOR again appealed in both cases. We granted the parties’ joint request pursuant to Bankruptcy Rule 8006(g) for 

leave to appeal the adverse judgments of the bankruptcy 

court directly to this court.

II.

The essential question posed in these appeals is whether 

IDOR received adequate protection for its interest in the debtors’ properties when those properties were sold, with the 

bankruptcy court’s permission, free and clear of IDOR’s interest in compensation for unpaid taxes. The bankruptcy courts 

concluded, in essence, that because IDOR had not shown that 

the purchasers had assets apart from the purchased properties from which IDOR could have collected the unpaid taxes 

had the sales taken place with its interest (and its right to pursue the purchasers personally) intact, its interest had not decreased in value by virtue of the courts’ section 363(f) orders, 

and IDOR was therefore not entitled to any remuneration for 

its interest under section 363(e). The thrust of IDOR’s appeals 

is that because its ability to hold the purchasers personally liable for the taxes had real value, as the district judges recog-
14 Nos. 17-1575 & 17-2004

nized, the purchase price for the debtors’ properties necessarily included some amount of consideration for the removal 

of IDOR’s interest. As IDOR sees things, then, it does not matter whether the purchasers had other assets apart from the 

purchased properties from which IDOR might have sought to 

collect the delinquent taxes. The purchasers have already paid 

something for (the removal of) IDOR’s interest, and IDOR is 

entitled to that portion of the sale proceeds.3

Section 363(f) of the Bankruptcy Code authorizes the trustee to sell property of the estate free and clear of any interest 

held by an entity other than the estate itself. Needless to say, 

removing the encumbrances on estate property makes the 

property more attractive to potential purchasers, thereby 

boosting the sale price and maximizing the recovery for creditors of the estate. See Precision Indus., supra, 327 F.3d at 548;

Douglas v. Stamco, 363 F. App’x 100, 102–03 (2d Cir. 2010) 

(non-precedential decision); Diogo-Carreau v. Am. Home 

Mortg. Acceptance, Inc., 167 F. Supp. 3d 258, 263 (D. Mass. 

2016); Elk Grove II, 541 B.R. at 676; see generally Toibb v. Radloff, 

501 U.S. 157, 163, 111 S. Ct. 2197, 2201 (1991) (“Chapter 11 ... 

 

3 IDOR did not waive this argument, as the banks suggest it did. To the 

extent that the district court rejected the argument in each instance below, 

IDOR was not required to take an immediate appeal to this court in order 

to preserve it. In both cases, the district court remanded the matter to the 

bankruptcy court for further consideration as to the value of IDOR’s interest for purposes of section 363(e). This was by no means a ministerial task 

on the part of the bankruptcy court, and so the judgments were not final 

at the time the cases were remanded. See, e.g., In re Ferguson, 834 F.3d 795, 

798-800 (7th Cir. 2016). IDOR was thus entitled (indeed, required) to wait 

until the remands were resolved before pursuing the issue in this court. 
Nos. 17-1575 & 17-2004 15

embodies the general Code policy of maximizing the value of 

the bankruptcy estate”).

However, section 363(e) qualifies this power in providing 

that, upon the request of an entity holding an interest in the 

property to be sold, the court “shall prohibit or condition such 

... sale ... as is necessary to provide adequate protection of 

such interest.” Section 361(1) in turn provides that when adequate protection is called for under section 363, it may be provided in the way of cash payments compensating the affected 

entity for the decrease in the value of its interest. In short, an 

entity whose lien or other interest is removed from property 

in order to facilitate its sale is entitled to compensation for 

whatever loss the removal causes the entity. See United Sav. 

Ass’n of Tex. v. Timbers of Inwood Forest Assocs., Ltd., 484 U.S. 

365, 370–71, 108 S. Ct. 626, 630 (1988). Typically, the entity is 

compensated from the proceeds of the sale. See Precision Indus., 327 F.3d at 548; In re Nov. 2005 Land Investors, LLC, 636 F. 

App’x 723, 726 (9th Cir. 2016) (non-precedential decision). 

As a threshold matter, we assume without deciding that 

IDOR’s authority to impose successor liability for unpaid 

taxes on the purchaser in a bulk sale constitutes a cognizable 

“interest” in a debtor’s property for purposes of section 363. 

See In re Elk Grove I, 510 B.R. at 603, and cases cited therein; see 

generally Precision Indus., 327 F.3d at 545 (indicating that the 

term should be construed broadly). Judge Barnes expressly 

held in IDOR’s favor on this point, 510 B.R. at 603, although 

Judge Goldgar found it unnecessary to decide the issue, see

n.2, supra. The pertinent fact for our purposes, however, is 

that in neither case did anyone contest the point on appeal to 

the district court, leading both Judge Blakey and Judge Der-
16 Nos. 17-1575 & 17-2004

Yeghiayan to consider the point either undisputed or unnecessary to resolve. Elk Grove II, 541 B.R. at 676; Naperville Theater, 2016 WL 930659, at *2. Although the Chapter 7 Trustee attempts to resurrect the issue in this court, it is too late in the 

day for the parties to reopen this issue. We shall proceed on 

the assumption that IDOR had an interest that was entitled to 

adequate protection under section 363(e).4

What the bankruptcy court was thus required to resolve 

was the extent to which the value of IDOR’s interest under the 

Bulk Sales Provisions decreased when, in each case, the court 

permitted the properties to be sold free and clear of that interest. That assessment requires a review of the relevant provisions of Illinois law. See Barnhill v. Johnson, 503 U.S. 393, 397–

98, 112 S. Ct. 1386, 1389 (1992); Butner v. United States, 440 U.S. 

48, 55, 99 S. Ct. 914, 918 (1979); Hoornstra v. United States, 969 

F.2d 530, 532 (7th Cir. 1992); Bjork v. United States, 486 F.2d 

934, 937 (7th Cir. 1973).

IDOR’s interest rests on the Bulk Sale Provisions found in 

section 902(d) of the Illinois Income Tax Act, 35 ILCS 5/101 et 

seq. and section 5j of the Retailers Occupation Tax Act, 35 ILCS 

120/1 et seq. These provisions apply when a taxpayer sells the 

 

4 We may also assume, contrary to UCB’s suggestion, that the Bulk Sales 

Provisions would apply (absent a section 363(f) order) when the property 

is being sold by a trustee in bankruptcy subject to the bankruptcy court’s 

permission and oversight. UCB has advanced this argument largely as a 

matter of policy rather than statutory interpretation. The Bulk Sales Provisions themselves do not exempt sales taking place in the course of bankruptcy proceedings, and although the trustee may not literally be the “taxpayer” to which these provisions refer, he certainly acts on the taxpayer’s 

behalf. In any case, given the other grounds on which we dispose of 

IDOR’s appeals, we need not reach this contention.
Nos. 17-1575 & 17-2004 17

majority of its assets (including real property) outside of the

normal course of business, as in a liquidation. Pursuant to 

those provisions, the purchaser in a bulk sale must give notice 

of the purchase to IDOR. If there are outstanding state taxes 

owed by the seller, IDOR may within ten business days issue 

a “stop order” instructing the purchaser to reserve a portion 

of the purchase monies sufficient to cover the estimated 

amount of outstanding taxes owed by the business. IDOR 

then has another 60 business days to calculate the actual 

amount of taxes owed and to issue a revised stop order with 

the updated tax bill and directing the purchaser to continue 

holding in reserve the portion of the purchase price set aside 

previously for unpaid taxes. If the seller thereafter fails to pay 

the outstanding taxes, IDOR may issue a demand to the purchaser to turn over the withheld funds, and the purchaser 

“shall pay” to the Department the amount so withheld from 

the purchase price. A purchaser who fails to give IDOR notice 

of a bulk sale, or fails to withhold the amount specified in a 

stop order, or fails to turn over the withheld funds at IDOR’s 

demand becomes personally liable to IDOR for the amount of 

unpaid taxes owed by the seller up to the reasonable value of 

the property acquired by the purchaser. See 35 ILCS 5/902(d); 

35 ILCS 120/5j; 86 Ill. Admin. Code §130.1701. 

The Bulk Sale Provisions give IDOR a unique and powerful weapon in the pursuit of delinquent taxes, with important 

consequences for what and how a purchaser would pay for 

property affected by those provisions. Faced with the prospect of being held personally liable for a seller’s unpaid 

taxes, a reasonable purchaser would take steps of its own to 

make certain that unwelcome event never came to pass.
18 Nos. 17-1575 & 17-2004

In this regard, it is important to note that setting aside a 

portion of the purchase money in compliance with a stop order from IDOR does not by itself ensure either that IDOR will 

be paid from those funds or that the purchaser will be discharged from liability to IDOR. A business with a significant 

tax liability to IDOR is likely to have other debts as well; and 

the business’s other creditors may have a superior claim to the 

sale proceeds—including any portion of the proceeds the purchaser set aside at IDOR’s direction. IDOR’s power to compel 

a purchaser to reserve a portion of the proceeds for the Department’s benefit does not isolate the reserved funds from 

the claims of other creditors. See Bjork v. United States, supra, 

486 F.2d at 938 (bulk sale statute authorizing IDOR to issue 

stop order “does not purport to vest ownership of the held 

fund in the State”). A purchaser faced with competing claims 

to the set-aside funds can, of course, file an interpleader action 

and ask a court to decide who has the superior claim to the 

funds. See 28 U.S.C. § 1335; Fed. R. Civ. P. 22; 735 ILCS 5/2-

409; see also, e.g., Bjork, 486 F.2d at 939 (concluding in interpleader suit that federal Internal Revenue Service had superior claim to withheld funds notwithstanding stop order issued by IDOR). But, as IDOR asserts, setting aside and interpleading the funds does not necessarily discharge the purchaser’s obligations under the Bulk Sales Provisions. In the 

event the interpleader court determines that another creditor 

has a superior claim to the funds, the purchaser, under a 

broad reading of the Bulk Sales Provisions, may nonetheless 

be held liable to IDOR for failing to withhold and pay those 

reserved funds to IDOR.

Courts in other jurisdictions have concluded that a bulk 

sales stop order requires a purchaser not simply to reserve a 
Nos. 17-1575 & 17-2004 19

portion of the purchase money sufficient to cover the outstanding tax liability but to do so for the benefit of the state taxing authority. These courts construe bulk sale provisions to 

impose essentially strict liability on the purchaser for taxes 

left unpaid by the property’s seller, such that if another creditor lays claim to the set-aside funds and the purchaser is compelled to turn over the funds to that creditor, the purchaser 

remains liable to the state for the outstanding tax debt. See 

Schnyder v. State Bd. of Equalization, 124 Cal. Rptr. 2d 571, 577–

79 (Cal. Ct. App. 2002) (holding purchasers liable to state for 

unpaid taxes after court in interpleader action had determined that IRS had superior claim to funds withheld pursuant to stop order); Red, White & Blue Transmission, Inc. v. Dep’t 

of Revenue Servs., 690 A.2d 437, 439–40 (Conn. Super. Ct. 1994) 

(transmitting funds to trustee for resolution of competing 

creditor claims does not insulate purchaser from liability to 

state). Although IDOR does not cite, and we have not found, 

any Illinois case law on this point, we may assume (as a purchaser might) that Illinois courts likely would follow this line 

of authority. The Illinois statutes themselves state explicitly 

that in the event the seller of the property has failed to pay the 

outstanding taxes and IDOR has issued timely instructions to 

the purchaser to withhold funds for the tax delinquency, the 

purchaser “shall pay to the Department the amount so withheld from the purchase price.” 35 ILCS 5/902(d) (emphasis 

added); see also 35 ILCS 120/5j (nearly identical wording). 

IDOR’s letter rulings reflect the same view. See IDOR Letter 

No. 96-0114, 1996 WL 699622, at *1 (Aug. 26, 1996) (“If the 

Transferee fails to report to the Department, withhold the requisite amount, or pay over the withheld amount when required, 

the Transferee will become personally liable for the outstanding state tax liabilities of the Transferor, up to the amount of 
20 Nos. 17-1575 & 17-2004

the value of the property transferred.”) (emphasis added); 

IDOR Letter No. 90-0406, 1990 WL 207605, at *1 (Jul. 5, 1990) 

(same); IDOR Letter No. 87-0624, 1987 WL 53814, at *1 (Aug. 

19, 1987) (same); but see also 2 Ill. Admin. Code § 1200.110(a) 

(IDOR general information letters do not constitute agency 

policy and do not bind IDOR); id. § 1200.120(c) (IDOR private 

letter rulings only binding as to taxpayer that requested ruling).5

 

5 The banks have asserted that a purchaser would be discharged from liability in an interpleader action—in other words, that the purchaser would 

have satisfied its obligation to IDOR by withholding the requisite funds 

pursuant to the stop order, interpleading the funds, and allowing a court 

to decide, as between IDOR and the seller’s other creditors, who had the 

superior claim to the withheld funds. Banks Br. 25-26. But this assumes 

that the purchaser is a neutral stakeholder with no independent liability 

to IDOR. See John Hancock Life Ins. Co. (U.S.A.) v. Jacobs, 2014 WL 587521, 

at *1 (D. Nev. Feb. 13, 2014); Metro. Life Ins. Co. v. Mitchell, 966 F. Supp. 2d 

97, 103 (E.D.N.Y. 2013). Arguably, however, the purchaser would not be a 

neutral stakeholder. As we have noted, the Bulk Sales Provisions on their 

face impose a duty on the purchaser not simply to withhold funds from 

the purchase price, but to turn over those funds to IDOR in the event that 

the seller does not make good on its outstanding tax obligations. Assuming that Illinois courts would follow cases like Schnyder, the purchaser 

would remain personally liable to IDOR if it filed an interpleader suit and 

the court presiding over that suit determined that the bank or another 

creditor of the seller had a superior claim to the withheld funds; in that 

event, the purchaser would have “failed” to remit the withheld funds to 

IDOR. See Schnyder, 124 Cal. Rptr. at 577 (by filing interpleader action, 

purchasers failed to “withhold” funds from the purchase monies as required by bulk sales statute, in sense that they did not make withheld 

funds available to state agency for satisfaction of outstanding tax liability). 

Put another way, an interpleader action may relieve the purchaser of having to decide who has the superior claim to the withheld funds. See, e.g., 

United States v. Federative Republic of Brazil, 748 F.3d 86, 95 (2d Cir. 2014); 

Bank of N.Y. Mellon Trust Co., N.A. v. Telos CLO 1006-1 Ltd., 274 F. Supp. 3d 
Nos. 17-1575 & 17-2004 21

Against this backdrop, it is not hard to appreciate IDOR’s 

position that it would be worth something to a bulk-sale purchaser to be able to make its purchase free and clear of IDOR’s 

interest and thus have no worry about successor liability—

and that the sale price for the debtors’ properties in these 

cases necessarily included a premium for the removal of that 

interest. The question is what value to place on the removal. 

IDOR appears at times to assume that, but for the bankruptcy 

court’s free-and-clear orders, it likely would have recovered 

the entirety of the taxes owed given its ability to pursue the 

purchasers personally. For that reason, IDOR places a correspondingly high value on the removal of its interest and the 

compensation to which it is entitled under section 363(e): 100 

percent of the outstanding tax debt (up to the amount of the 

sale price). But we are dubious of the notion that IDOR was 

likely to have recovered all of the outstanding taxes but for 

the removal of its interest; and for purposes of placing a value 

on IDOR’s interest for purposes of section 363(e), we must 

consider what IDOR realistically could have recovered from 

the purchaser.

We may deal with IDOR’s argument on its own terms 

without attempting to resolve the conflict it poses with the 

priority scheme reflected in the Bankruptcy Code. See 11 

U.S.C. § 507. There is no dispute that IDOR’s claims against 

the debtors were inferior to those of the banks and that, given 

the size of the banks’ claims vis-à-vis the proceeds of the prop-

 

191, 214 (S.D.N.Y. 2017); Amalgamated Trust & Sav. Bank v. Silha, 460 N.E.2d 

372, 377 (Ill. App. Ct. 1984). But it does not necessarily relieve the purchaser of its independent liability to IDOR for the outstanding taxes under 

the Bulk Sales Provisions.
22 Nos. 17-1575 & 17-2004

erty sales, IDOR ordinarily would be “out of the money.” According IDOR a right to claim any portion of the sale proceeds 

would, in a real sense, permit IDOR to jump the queue of 

creditors and grant IDOR monetary protection for its interest 

at the expense of other creditors. The banks describe this as 

awarding IDOR a post hoc priming lien that permits IDOR to 

assume first place in the creditor queue.6 We do not take this 

prospect lightly. See, e.g., In re R.J. Dooley Realty, Inc., 2010 WL 

2076959, at *7 (Bankr. S.D.N.Y. May 21, 2010) (criticizing notion that debtor’s tenant might be entitled to adequate protection under section 363(e) given sale of debtor’s property free 

and clear of tenant’s leasehold interest, as reimbursement 

from sale proceeds would permit tenant to “catapult ... ahead 

of its position behind secured, administrative, and priority 

unsecured creditors, in complete contravention of the priorities of the Bankruptcy Code”).

What distinguished IDOR from other creditors, however, 

was its right to look beyond the debtor’s assets and to hold 

the purchasers of those assets personally liable for the taxes it 

was owed. To that extent, the bankruptcy court’s free-andclear orders arguably deprived IDOR of a power and interest 

that no other creditor possessed. So arguably IDOR is not so 

 

6 Whatever other rights the bulk sale provisions convey to IDOR, they do 

not permit IDOR’s claim to the proceeds of a bulk sale to take priority over 

the superior claims of other creditors. “Nothing in this Section shall be 

construed to give the Department a preference over the rights of any bona 

fide purchaser, holder of a security interest, mechanics lienholder, mortgagee, or judgment lien creditor arising prior to the filing of a regular notice of lien. ...” 35 ILCS 5/1103(a); 35 ILCS 120/5a. In this respect, the bulk 

sale provisions are consistent with other provisions of Illinois law. See 810

ILCS 5/9-322(a)(1) (security interests rank according to priority in time or 

perfection).
Nos. 17-1575 & 17-2004 23

much demanding permission to cut ahead of other creditors 

as it is insisting on recognition that it had a unique interest 

that no other creditor had and which extended beyond the 

corpus of the bankruptcy estate. Put another way, to the extent the price the purchaser paid for the debtor’s property indeed does reflect a premium for the removal of IDOR’s right 

to impose successor liability for the taxes on the purchaser, 

that consideration, whatever it may be, is attributable to IDOR 

rather than any asset of the estate. We shall therefore assume 

without deciding that a court could place a value on IDOR’s 

right and compensate IDOR accordingly from the proceeds of 

the section 363 sale, even if that would reduce the recovery to 

other, more senior creditors.

But the question, again, is what value to place on IDOR’s 

right to hold a purchaser personally liable for unpaid taxes. 

Although we can find no fault in the abstract with IDOR’s theory as to the unique value of its interest, the notion that it 

stood to recover 100% of its claim for unpaid taxes but for the 

bankruptcy court’s free-and-clear orders runs into several 

pragmatic obstacles. Inside or outside of bankruptcy, the 

seller, its creditors, and prospective purchasers all would be 

cognizant of IDOR’s right to pursue a purchaser for unpaid 

taxes. No reasonable, informed purchaser would agree to sale 

terms that left it unprotected against IDOR; and for their part, 

the banks, as the debtors’ senior-most creditors, would not 

agree to any sale scenario in which IDOR stood to recover 

100% of its claim from the purchase money at the banks’ expense. 

A prudent purchaser in a bulk sale would take protective 

measures over and above complying with a stop order in order to shield itself from personal liability to IDOR. A buyer 
24 Nos. 17-1575 & 17-2004

can always, for example, insert a clause in the purchase agreement requiring the seller to pay the delinquent taxes (and produce proof that it has done so) and/or to hold the buyer harmless for any liability to IDOR. But assuming that the seller 

lacks the resources to clear the tax debt itself, the buyer alternatively might structure the purchase agreement in such a 

way as to expressly reserve a portion of the purchase money 

for the (exclusive) benefit of IDOR in order to satisfy the tax 

liability and thereby insulate the reserved funds from the 

claims of other creditors—even those whose claims are senior 

to those of IDOR. See Hoornstra, supra, 969 F.2d at 533–34 

(where purchase agreement called for portion of purchase 

money to be placed in escrow and conditioned payment to 

seller on satisfaction of outstanding tax liabilities, and IDOR 

issued timely stop order once notified of sale, seller did not 

acquire beneficial interest in reserved funds that would permit IRS as senior lienholder to take reserved funds ahead of 

IDOR as it had in Bjorn). Alternatively, the purchaser might 

insist that the price of the property be reduced to account for 

the risk that complying with the stop order might not be 

enough to protect the purchaser from being held personally 

liable to IDOR.7

IDOR might be indifferent to such measures, as none of 

them would undermine its ability to collect the unpaid taxes, 

but the debtors’ senior creditors—here, the banks—surely 

would not be indifferent. In any case where a debtor’s assets 

are insufficient to cover its debts, a reduction in the purchase 

 7 Or the purchaser might simply walk away from the transaction. See 

Schnyder, 124 Cal. Rptr. at 579.
Nos. 17-1575 & 17-2004 25

price or segregation of purchase funds for the sole benefit of 

IDOR will decrease a senior creditor’s recovery in a situation 

where that creditor already faces substantial losses. And in 

these cases, the banks were not without their own weapon to 

prevent IDOR from obtaining recompense at their expense: 

the ability to foreclose on the properties.

One of the few points of agreement among the parties is 

that a foreclosure does not trigger the Bulk Sales Provisions. 

See 86 Ill. Admin. Code § 130.1701(g)(3) (“A repossession of 

equipment and inventory by a lender upon default by a borrower does not constitute a transfer within the meaning of the 

Bulk Sales provisions of the Act.”); IDOR Letter No. 11-0096, 

2011 WL 7014975, at *4 (Dec. 7, 2011) (“if the successor does 

no more than repossess or foreclose on property that is the 

subject of a note and mortgage or security interest, we do not 

believe that the situation is subject to the bulk sales reporting 

requirements because no ‘sale or transfer’ within the statutory 

meaning has occurred”); IDOR Letter No. 87-215, 1987 WL 

53678, at *2 (Aug. 26, 1987) (“The Department has a standing 

policy of not enforcing either [bulk sales] statute in judicial 

and non-judicial foreclosure actions.”); IDOR Br. 34 n.11 

(“While the regulation [§ 130.1701(g)(3)] refers to the repossession or foreclosures of personal property, IDOR in practice 

extends it to the foreclosure of realty.”); IDOR Br. 31–32 n. 8 

(“IDOR does not assert successor liability under the Bulk 

Sales Provisions in federal foreclosure cases just as it does not 

do so in state foreclosures”). Thus, if the banks had decided

to foreclose on the properties, there would have been no need 

to set aside funds for the taxes owed to IDOR and IDOR 

would have had no right to pursue the banks for the outstanding tax debt. It would be as if the properties had not changed 

hands at all. By virtue of their foreclosure authority, the banks 
26 Nos. 17-1575 & 17-2004

thus had the power to veto any sale terms that favored IDOR 

at the expense of the banks.8

Of course, foreclosure comes with significant costs and 

can ultimately reduce the net recovery to a bank once it disposes of the property. IDOR’s able counsel therefore was no 

doubt correct when he asserted at oral argument that the 

power to foreclose is one the banks will be reluctant to use. 

But when, as in these cases, the taxes owed to IDOR run into 

the millions of dollars, we doubt that a lender would hesitate 

to use (or at least threaten) foreclosure in order to prevent 

IDOR from skimming a substantial portion of the sale proceeds for itself and to maximize its own recovery. 9

Given that the banks and IDOR both have the means to 

block a sale that does not adequately address their respective 

interests in compensation, a compromise as to the allocation 

of sale proceeds is likely the only way that a bulk sale would 

proceed in a case where the seller’s assets fall short of making 

whole even the senior-most creditor, let alone that creditor 

and IDOR both. A compromise, of course, would entail the 

bank agreeing to let IDOR, notwithstanding its status as a junior creditor, take some portion of the sale proceeds in exchange for releasing the purchaser from successor liability for 

unpaid taxes, and IDOR agreeing to accept something less 

than 100 percent of the amount that the Bulk Sales Provisions 

 

8 If the property owner were in bankruptcy, the bank of course would 

have to ask the bankruptcy court to lift the automatic stay in order to allow 

it to pursue the foreclosure in state court.

9 We are told, for example, that the taxes owed by one of the five Elk Grove 

stations exceeded the sales price for that station by a multiple of three. So 

any arrangement that prioritized payment of the sale proceeds to IDOR 

would have left the bank with nothing as to that station. 
Nos. 17-1575 & 17-2004 27

would allow it to collect. We can be confident that these types 

of deals are more than an abstract possibility. IDOR’s own 

counsel confirmed at oral argument that it negotiates compromises with lenders on a regular basis.

This is where the wheels come off the wagon of IDOR’s 

argument. Recall that for purposes of determining the compensation putatively owed to IDOR under section 363, section 

361(1) directs us to consider how much the value of IDOR’s 

interest decreased as a result of the bankruptcy courts’ freeand-clear orders. IDOR’s go-for-broke position insists that it 

should be reimbursed for the full amount of the tax delinquency it was authorized to collect from the purchasers. But, 

for the reasons we have set out, it is not at all likely that IDOR 

in fact would have recovered those taxes in full from the purchasers in these cases. It might have struck a deal with the 

banks and/or the purchasers to recover something less than 

100 percent of the taxes, but at no point in the proceedings has 

IDOR offered any evidence, or articulated any methodology, 

by which we could determine how much it might have recovered in such a deal and in turn the extent to which the value 

of its interest decreased when the bankruptcy court lifted its 

interest from the debtors’ properties. 

In its reply brief, IDOR suggests that the likelihood of its 

being able to collect the delinquent taxes from a purchaser is 

irrelevant to the value of its interest and that the bankruptcy 

court was therefore wrong to consider, for example, what resources, if any, the purchasers in these cases had available to 

pay the taxes (IDOR Reply at 23–24); but we do not see why 

this is so. Sections 361(1) and 363(e) call for a creditor to be 

compensated for the decrease in value of its interest. If, as a 

practical matter, IDOR’s right to impose successor liability on 
28 Nos. 17-1575 & 17-2004

the purchaser was worth nothing, or worth something less 

than the full amount of the taxes IDOR was owed, then as a 

logical matter that fact necessarily informs the determination 

of whether and by how much the value of IDOR’s interest decreased by virtue of the bankruptcy court’s free-and-clear orders and of what compensation IDOR is owed for the decrease. See, e.g., In re Martin, 761 F.2d 472, 475–78 (8th Cir. 

1985). As Judge Blakey pointed out, an interest that is cognizable under section 363(e) and (f) may be worth nothing, in practical terms, in which case the interest-holder is entitled to no 

compensation pursuant to section 363(e) and 361(1). See Elk 

Grove II, 541 B.R. at 678 (collecting cases).

We have not forgotten IDOR’s contention that the purchasers have already paid a premium for the removal of 

IDOR’s interest, such that there is no need to consider what 

IDOR realistically might have been able to demand from a 

purchaser and whether the purchaser had the means to pay 

it; but we are still faced with a problem of valuation. Whatever premium the purchasers might have paid for the removal of IDOR’s interest would have been informed (and discounted) by the likelihood of IDOR being able to collect on its 

interest. Given the realities we have discussed, it is not at all 

likely that any premium the purchasers may have paid came 

close to the figure that IDOR nominally was entitled to collect 

from the purchasers under the Bulk Sales Provisions.

As should be clear by now, we are placing the responsibility for the failure of proof as to the value of IDOR’s interest on 

IDOR itself. No issue has been raised in these appeals as to 

the proper allocation of the burden of proof on this point. 

IDOR itself notes several times in its brief that the bankruptcy 

court in both cases concluded that IDOR failed to sustain its 
Nos. 17-1575 & 17-2004 29

burden of proof to establish the value of its successor liability 

interest. IDOR Br. 7, 22, 38. Although IDOR faults the conclusion that the value of its interest was not proven, it does not 

quarrel with the notion that the burden to establish that value 

belonged to it. We note that there is at least some authority 

that for purposes of section 363(e), a creditor claiming the 

right to adequate protection bears only the minimal threshold 

burden of establishing the validity, priority, or extent of its 

interest, whereas the debtor (or trustee) must shoulder the initial burden of establishing what constitutes adequate protection vis-à-vis that interest—including the value of the creditor’s interest and any decrease therein. See In re AMR Corp., 

490 B.R. 470, 477 (S.D.N.Y. 2013); 11 U.S.C. § 363(p). But we 

need not explore the point, as IDOR has waived any contention as to the burden of proof. 

As there is no evidence as to what IDOR likely would have 

collected from the purchasers but for the bankruptcy court’s 

section 363(f) free-and-clear orders, there is no way to determine what decrease in value the section 363(f) orders caused 

or what, if any, consideration the purchasers paid specifically 

to buy the properties free and clear of IDOR’s interest under 

the Bulk Sales Provisions. No matter which party bore the 

burden of proof on this point, the failure of proof precludes a 

meaningful assessment of the value of IDOR’s interest. The 

bankruptcy courts therefore did not err in valuing IDOR’s interest at zero for purposes of its right to adequate protection 

under section 363(e).

III.

For all of the foregoing reasons, the judgments of the bankruptcy court are affirmed.