STEPHEN C. ST. JOHN, United States Bankruptcy Court Judge
On October 25, 2002, Picus, Inc. and Picus Communications, LLC ("LLC"), Debtors in Possession (collectively hereinafter the "Debtors"), by counsel, filed a Motion to Sell Assets Free and Clear of Liens and Outside the Ordinary Course of Business (the "Motion"). Notice and an opportunity to object were given to all creditors and parties in interest. Only the City of Alexandria, Virginia ("Alexandria") and the County of Arlington, Virginia ("Arlington") (collectively hereinafter the "Municipalities") filed objections to the Motion. A hearing on the objections to the Motion was scheduled for December 5, 2002. No other objections to the Motion were filed. Upon the exchange of information between counsel for the Debtors and counsel for the Municipalities, all issues regarding the objections were resolved subject to the terms as set forth herein.
Based upon the uncontested allegations in the Motion and the stipulation and agreement of counsel to the Debtors and the Municipalities, the Court hereby makes the following findings of fact:
1. The Debtors filed a voluntary petition under Chapter 11 of the United States Bankruptcy Code on November 7, 2000 (the "Filing Date").
2. No trustee has been appointed and the Debtors remain in possession of their estates as debtors in possession.
3. Pursuant to the order of this Court of November 17, 2000, these cases are being jointly administered for procedural purposes only.
4. On November 21, 2000, the Office of the United States Trustee appointed an official committee of unsecured creditors.
5. This proceeding arises under 11 U.S.C. § 363. This Court has original jurisdiction to decide this matter pursuant to 28 U.S.C. § 157 (a) and 1334(b). Venue is proper before this Court pursuant to 28 U.S.C. § 1408 and 1409. It is a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(A) and (N) and a contested matter pursuant to Bankruptcy Rule 9014.
6. As of the date of the filing of the Motion, LLC continued to own collocation equipment located throughout the Commonwealth of Virginia (the "Collocation Equipment").
7. Liquidators hired by the Debtors previously offered the Collocation Equipment for sale by auction on May 10, 2001. Because of a lack of bids, most of the Collocation Equipment was not sold.
8. MDU Services, Inc. ("MDU"), has offered to buy from LLC the Collocation Equipment located in 96 central offices, on the condition that the Collocation Equipment is free and clear of liens. LLC and MDU have agreed upon the terms of the sale of the Collocation Equipment as set forth in the Asset Purchase Agreement, a copy of which is attached as Exhibit A (the "Agreement").
9. Given the prior inability of liquidators to sell the Collocation Equipment, other good cause including the continuing depreciation of the Collocation Equipment, and numerous, dispersed locations of the Collocation Equipment, the Court finds, and the parties agree, that the sale as proposed in the Agreement is fair and reasonable, and represents the highest, best offer for the Collocation Equipment.
10. The Debtor and MDU are proceeding in good faith.
11. The proposed sale outside the ordinary course of business is in the best interests of the bankruptcy estate.
12. Notice of the sale has been sufficient and was given to appropriate creditors and parties in interest.
13. This Order is a judgment, as described in Bankruptcy Rule 9021, and contains findings of fact and conclusions of law in accordance with Bankruptcy Rule 7052. This Order is an Order authorizing the use, sale, or lease of property, as contemplated by Bankruptcy Rule 7062.
The Municipal Objections
14. The Debtors and the Municipalities stipulate that —
a. The Municipalities have asserted the only objections to the proposed sale; each asserting perfected tax liens against certain of the Collocation Equipment.
b. The Debtors dispute the validity, priority, and amount of the Municipalities' asserted claims and liens and reserve all rights to contest same.
c. The Municipalities consent to the sale of the Collocation Equipment upon the terms set forth in the Agreement, free and clear of liens, as proposed, upon the condition that certain proceeds of sale be placed in escrow, as farther described in this Order, pending resolution of the disputes between the Debtors and the Municipalities.
15. The Debtors and Alexandria specifically understand and agree as follows:
a. Collocation Equipment within Alexandria ("Alexandria Equipment") subject to the Agreement is located in seven (7) Central Offices,
b. A maximum of $2,000.00 in sale proceeds is assigned to each Central Office under the terms of the Agreement.
c. The Debtors agree to hold in escrow any funds from the sale of the Alexandria Equipment received from MDU pursuant to the Agreement. Any valid liens in favor of Alexandria shall attach to the funds escrowed pursuant to this subparagraph (c).
d. The maximum amount to be placed in escrow with respect to the Alexandria Equipment is $14,000.00.
e. The Debtors shall release the funds from escrow only upon the resolution of the tax issues between Alexandria and the Debtors by agreement or upon further order of this Court and in payment of any amount due to Alexandria, with the balance to the Debtors to be held with all other proceeds from the sale of the Collocation Equipment pursuant to the Agreement.
16. The Debtors and Arlington specifically understand and agree as follows:
a. Collocation Equipment within Arlington ("Arlington Equipment") subject to the Agreement is located in four (4) Central Offices.
b. A maximum of $2,000.00 in sale proceeds is assigned to each Central Office under the terms of the Agreement.
c. The Debtors agree to hold in escrow any funds from the sale of the Arlington Equipment received from MDU pursuant to the Agreement. Any valid liens in favor of Arlington shall attach to the funds escrowed pursuant to this subparagraph (c).
d. The maximum amount to be placed in escrow with respect to the Arlington Equipment is $8,000.00.
e. The Debtors shall release the funds from escrow only upon the resolution of the tax issues between Arlington and the Debtors by agreement or upon further order of this Court and in payment of any amount due to Arlington, with the balance to the Debtors to be held with all other proceeds from the sale of the collocation equipment pursuant to the Agreement.
17. All matters concerning the validity, priority, and amount of the claims and liens asserted by the Municipalities are preserved, and this Court shall retain jurisdiction over these matters.
For good cause shown, it is:
ORDERED, that the Motion of the Debtors shall be, and hereby is, granted, and that the Agreement between the Debtors and MDU is approved; it is further
ORDERED, that the Collocation Equipment, as defined in the Agreement be sold, free and clear of all liens and encumbrances, including, without limitation, the liens of Alexandria and Arlington, to MDU, pursuant to 11 U.S.C. § 363 (b) and (f); it is further
ORDERED, that Alexandria and Arlington, and their respective agents and officers, shall release any liens against the Collocation Equipment; it is further
ORDERED, that MDU shall pay the sales price for the Collocation Agreement as set forth in the Agreement and this Order; it is further
ORDERED, that, immediately upon receipt of proceeds of the sale of Central Office Collocation Equipment located prior to sale in Alexandria and Arlington, the Debtors shall place such proceeds in separate interest bearing escrow accounts pending resolution of the Debtors' disputes with the Municipalities subject to the terms of the stipulations set forth above; it is further
ORDERED, that the Debtors shall hold all remaining cash proceeds from the sale to MDU in an interest bearing escrow account until distributed pursuant to a confirmed plan or other order of this Court; it is further
ORDERED, that MDU shall be entitled to the protections afforded by 11 U.S.C. § 363 (in) in the event that this Order, or any part of it, is reversed or modified on appeal; and it is further
ORDERED, that the 10-day stay imposed by Bankruptcy Rules 6004(g) and 6006(d) is waived.