Opinion ID: 543073
Heading Depth: 1
Heading Rank: 3

Heading: Significance of Sale Free and Clear Of Liens and Encumbrances

Text: 14 Horizons also contends that the situation calls for the interpretation by the bankruptcy court of its own order. 15 The bankruptcy judge's order, dated March 7, 1986, authorized the sale to Horizons if another offeror failed to perform by March 11, a condition which came to pass. Paragraph 4 of the order included the sentence, The sale shall be free and clear of all liens and encumbrances, the same to attach to the proceeds of the sale. The parties agree that specified mortgages were assumed by Horizons and were unaffected by the sentence quoted. 16 Horizons seems to suggest that the NLRB's claim that Rodriguez-Estrada's conduct during May amounted to an unfair labor practice may fall within liens and encumbrances if properly construed, and contends that the proper interpretation is a question for the bankruptcy court. 17 Surely the ordinary meaning of liens and encumbrances does not embrace claims of unfair labor practices, and there is no ambiguity. Horizons suggests no facts which could lead to an interpretation including such claims. 18 Horizons cites Matter of Prescott College, 10 B.R. 316 (D.Ariz.1981). There, however, the corresponding language was claims of any and every kind whatsoever, and the court held this could be reasonably interpreted so that the transfer was to be free of liens. The court went on to conclude that the holder of a tax lien which had notice, but failed to object, was estopped from asserting the argument that the sale was conducted improperly, and was properly enjoined from enforcing its lien. Prescott is far distant from the facts of the instant case. 19 Furthermore, if the facts warrant a finding that the conduct of the bankruptcy trustee was performed on behalf of the purchaser and amounted to an unfair labor practice, the proposition that an order of the bankruptcy court could protect the purchaser from the consequences under the National Labor Relations Act would be untenable. 20 The judgment appealed from is AFFIRMED.