When a company sells its assets, the deal documents are supposed to say what is being sold and who is selling it. Most of the time they do. This case is the rare exception, where the parties ended up litigating whether one of the sellers was a seller at all.

In August 2024, the United States Bankruptcy Court for the District of Delaware approved the sale of substantially all the assets of iSun, Inc. and its eleven affiliated debtors to Clean Royalties, LLC, free and clear of all interests under Sections 363(b) and (f). The schedule of acquired assets conveyed every debtor's accounts receivable and listed, by name, three construction contracts belonging to a single debtor, iSun Industrial, LLC, whose receivables made up the great bulk of what was being sold. The cover page of the purchase agreement described the sellers as iSun and each of its affiliates or subsidiaries. But the agreement's preamble narrowed that definition to the entities listed on the signature page, and the unsigned signature pages attached to the court-approved version left iSun Industrial off. No one noticed at the time. iSun Industrial signed the final agreement, the sale closed, and the parties moved on.

Nearly a year later, the omission became a strategy. Clean Royalties sued the counterparties to those three contracts in Vermont to collect the receivables. While preparing their counterclaims, opposing counsel found that iSun Industrial never appeared on the form agreement's signature page. From that gap the counterparties built an argument with the appeal of simplicity: iSun Industrial sold nothing, Clean Royalties owns nothing, and the entire post-sale course of dealing was a negotiation over assets that were never conveyed. On June 16, 2026, Judge Thomas M. Horan rejected that reading, granted Clean Royalties' motion to enforce the Sale Order, and held that every debtor, including iSun Industrial, was authorized to sell.

The opinion is short on novel doctrine and long on practical instruction. It is a study in how a court construes a sale order and the purchase agreement it approves as a single instrument, how due process is measured by what a party actually knew rather than by what a recital says, and how Section 363(f) separates the affirmative claims a buyer extinguishes from the defenses a counterparty keeps.

Before the petition date, iSun Industrial was party to three engineering, procurement, and construction contracts for solar projects in Vermont, with Trolley Tracks Solar, LLC, Stone Mill Solar, LLC, and Halladay Solar, LLC. Each of those project entities is affiliated with Standard Solar, Inc., and each contract directed that notices to the owner be sent care of Standard Solar. On May 20, 2024, Standard Solar terminated all three contracts for convenience, two weeks before the bankruptcy filing.

iSun and its affiliates commenced their cases on June 3, 2024. The Court entered the Bidding Procedures Order on July 3, 2024, designating Clean Royalties as the stalking horse bidder. The form purchase agreement was then revised, in connection with a settlement with the Official Committee of Unsecured Creditors, to expand the acquired assets to include all of the debtors' accounts receivable. That revision proved central to the later dispute. The inclusion of all receivables was a negotiated term that cleared the path to the sale, and iSun Industrial held the substantial majority of them.

The Court entered the Sale Order on Friday, August 23, 2024, approving the Amended and Restated Asset Purchase Agreement, including any amendments, supplements, and modifications, and approving the sale free and clear under Sections 363(b) and (f). iSun Industrial executed the final agreement, and the executed agreement names iSun Industrial as a seller. The defect existed only in the unsigned form attached to the order.

The counterparties, which the Court grouped together as the SS Entities, made an argument that asked the Court to read two documents and take them at their word. The preamble defined "Sellers" as iSun and each affiliate or subsidiary listed on the signature page. iSun Industrial was not listed on that page. Because the specific governs the general, they argued, the narrow definition controlled over the broad cover-page language, and iSun Industrial was therefore not a Seller and had nothing to sell.

The Court agreed that if the signature pages were the only relevant text, the argument would have force. The problem is that they are not. The word of a contract is the whole of it, not a single page read in isolation. Set the unsigned signature page against everything else in the agreement and the order, and the rest of the record points the other way.

The Court found the omission to be a drafting lapse rather than a deliberate carve-out of one debtor's principal assets. That conclusion did not rest on intuition. It rested on four independent textual anchors in the agreement and the order, reinforced by a fifth provision that made the fix ministerial.

Before reaching the merits, the Court addressed a threshold challenge. The SS Entities argued that the Court lacked subject matter jurisdiction, relying on Judge Goldblatt's recent decision in In re SunPower Corp., 2026 WL 1599285 (Bankr. D. Del. June 3, 2026). In SunPower, the dispute turned on whether a solar power lease had ever entered the estate at all, a factual question that predated the bankruptcy by years and that the court found too distant from the meaning of the plan to support enforcement jurisdiction.

The Court distinguished SunPower on the nature of the question presented. The disagreement here is not a factual dispute that sits outside the order. It is a dispute about what the order itself authorized and sold. The parties offered competing interpretations of the Sale Order's decretal paragraphs and their relationship to the agreement's definitional terms, and that kind of conflict is precisely what a court's retained jurisdiction exists to resolve.

The Sale Order expressly retained jurisdiction to interpret, implement, and enforce its own terms, and to address the terms of the Stalking Horse Agreement. Because answering whether iSun Industrial's assets were sold first requires deciding what the order authorized, the question is about the meaning of the order, not about facts external to it. The jurisdictional objection was overruled, consistent with the guidance of Travelers Indemnity Co. v. Bailey and In re Lazy Days' RV Center.

The SS Entities objected to the admission of the post-sale email correspondence under Federal Rule of Evidence 408, arguing that those messages were settlement communications offered to show that the SS Entities had admitted or waived an objection to Clean Royalties' standing, which they treated as part of the validity of the claim. Clean Royalties responded that the emails were not offered to prove what was owed, a question reserved for the Vermont court, but to show a course of dealing and to establish estoppel.

The Court overruled the objection. Rule 408 is not a blanket bar on evidence that touches a compromise discussion. It forbids using such evidence to prove or disprove the validity or amount of a disputed claim, while permitting its use for another purpose. The disputed claim, within the meaning of the rule, is the monetary question of what remains owing under the terminated contracts. The emails were not offered for that purpose. They contained no negotiation over the operative question, which is whether iSun Industrial sold its receivables under the order. Offered to show contemporaneous conduct and understanding after entry of the Sale Order, they fell within a qualifying other purpose, consistent with the Third Circuit's approach in Moon Express, Inc. v. Intuitive Machines, LLC.

A sale order and the purchase agreement it approves are construed together, applying ordinary principles of contract interpretation, and the court that entered the order is well positioned to determine what it authorized. Those principles include the rule that a contract should be read as a whole and construed, where reasonably possible, to give effect to every provision and to avoid rendering language surplusage. Measured against that standard, the agreement and order admit of only one reasonable construction. The table below collects the textual anchors the Court relied on.

The first two anchors are about the assets. A schedule that transfers all of "the Debtors'" receivables, and that names iSun Industrial's three terminated contracts in a provision drafted specifically to capture rights under terminated and non-executory contracts, cannot be read to exclude the debtor that owns those very assets. The rule against surplusage forbids that result where a harmonizing construction is available. The Court noted that a debtor's rights under a non-executory contract may be sold as property of the estate, citing In re Weinstein Co. Holdings, LLC.

The next two anchors are about the order. The Sale Order authorized the debtors as a group, and its specific provisions resolving objections by counterparties to iSun Industrial contracts would have been unnecessary if iSun Industrial were a stranger to the transaction. The final anchor disposes of the charge that iSun Industrial was added through some backdoor transaction after the fact. Clean Royalties does not derive its rights from the unsigned signature pages. It derives them from the Sale Order, under whose authority the debtors executed the final agreement and closed. Conforming the signature pages to the deal described throughout the document required no further order, because that step had no adverse effect on the estates, a conclusion the Chief Restructuring Officer's uncontroverted declaration confirmed. The SS Entities offered no contrary evidence.

The SS Entities argued that whatever was served on them could not have alerted them that iSun Industrial's assets were being sold, because the deal documents omitted iSun Industrial from the signature pages. The Court took the concern seriously and agreed with the governing principle the SS Entities advanced: a recital in a sale order that all parties were properly served cannot, by itself, bind a party who in fact received no notice. Due process requires notice reasonably calculated, under all the circumstances, to apprise interested parties of the pendency of the action and afford an opportunity to be heard, the standard set in Mullane v. Central Hanover Bank & Trust Co.

That principle did not help the SS Entities, because the record established actual notice, comprehension, and engagement. The certificates of service showed that the sale notice was served on the SS Entities at the addresses designated in their own contracts, including care of Standard Solar, the very entity each contract named as the notice recipient. Standard Solar appeared in the cases through Delaware counsel on July 22, 2024, before the sale hearing. A counterparty examining the Acquired Assets schedule, on file since early July, would have found its own three contracts listed by name and a provision transferring all of the debtors' receivables.

The Court's ruling rested on the construction of the documents and on the adequacy of notice. The post-sale communications corroborated both, and the Court gave them weight for that limited purpose. The pattern is consistent across the correspondence. When Clean Royalties stated in writing that the amounts at issue were originally owed to iSun and now owed to the purchaser pursuant to the agreement, the SS Entities disputed whether anything was owed, but never disputed that Clean Royalties had become the owner of whatever was owed. Their in-house counsel asked what amounts Clean Royalties believed were owed, and acknowledged that they had been asking iSun, and now Clean Royalties, for these items.

The contrary reading surfaced only after litigation began, when, as their counsel forthrightly put it, he stumbled upon the signature-page omission while preparing the counterclaims. The Court accepted that parties may negotiate a disputed claim without admitting liability, and that silence in commercial negotiation is not always acquiescence. It did not treat the emails as a waiver of the underlying payment dispute, which Clean Royalties itself reserves for Vermont. But on the only question before the Court, what the parties understood the order to have authorized and sold, the contemporaneous conduct was probative and entirely consistent with the construction the Court adopted. Because the motion was granted on construction and notice grounds, the Court did not need to decide whether the same conduct would independently support estoppel or acquiescence.

The remaining relief concerned the limits of the transfer. The Sale Order permanently enjoins all persons holding interests against a debtor or the acquired assets, arising before the closing, from asserting those interests against the purchaser, whether by payment, setoff, or otherwise. It also provides that the purchaser is not a successor to the debtors and has no liability for pre-closing claims other than the Assumed Obligations.

The SS Entities' cross-complaint, on its face, sought to recover money damages for the debtor's alleged breach of contract, through counts for breach of contract, unjust enrichment, quantum meruit, and declaratory relief. At argument, counsel allowed that the word "recover" in that opening statement was a bit overbroad, but the pleading says what it says. Each count culminates in a request for a money judgment against the purchaser on account of alleged prepetition breaches. Those are paradigmatic interests within the meaning of the Sale Order and Third Circuit law, which construes interests under Section 363(f) broadly to include claims arising from the assets sold, as in In re Trans World Airlines.

The counterclaims also fell outside the Assumed Obligations exception. Assumed Obligations comprise scheduled obligations, which these are not, and obligations relating to an Assumed Contract first arising at or after the closing. The EPC Contracts were terminated prepetition, so every breach alleged is, by definition, a pre-closing breach. A buyer in a Section 363 sale takes on only the obligations it clearly agrees to assume, and Clean Royalties assumed none of these.

Two limitations frame the relief. First, consistent with Folger Adam Security, Inc. v. DeMatteis/MacGregor, the injunction reaches affirmative claims for recovery, not defenses. If the SS Entities have defenses to the Vermont complaint, they remain free to assert them. The Sale Order does not strip a party of the right to defend.

Setoff presents a different question, and the Court addressed it only to the extent the record required. Setoff, unlike recoupment, nets obligations arising from separate transactions. To the extent the SS Entities seek to use setoff as an affirmative vehicle for recovering money from Clean Royalties, that relief is enjoined by the plain terms of the order. Whether a purely defensive use of setoff exists, and whether it would be distinguishable from the affirmative recovery the order forecloses, was not developed on this record and was left for the Vermont court in the first instance, subject to the bankruptcy court's retained jurisdiction to interpret the Sale Order. Nothing in the ruling adjudicates the validity or amount of the receivables. What is actually owed remains for Vermont.

The Court granted the motion in full and directed the parties to present a form of order under certification of counsel. Stated plainly, the opinion resolves four things. The Sale Order authorized each of the debtors, including iSun Industrial, to sell the Acquired Assets to Clean Royalties. Those assets included all the debtors' unpaid accounts receivable and the debtors' rights and interests in and under the Stone Mill, Trolley Tracks, and Halladay contracts, regardless of their prepetition termination. The assets transferred to Clean Royalties free and clear of all interests. And the SS Entities, having received adequate notice, are bound by the order and are enjoined from prosecuting their affirmative counterclaims against the purchaser in Vermont, without prejudice to their defenses, including recoupment.

The decision is final on the questions it reaches, but it deliberately leaves the merits of the payment dispute open. The bankruptcy court decided what was sold and to whom. The Vermont court will decide what, if anything, the SS Entities owe on the receivables, and whether their defenses reduce or eliminate that amount.

The holding will not surprise anyone who has run a Section 363 process. The interest lies in how a drafting slip put the most valuable assets in the deal into dispute, and in what the opinion tells you about insulating a sale from that kind of attack.

Signature-page hygiene is not clerical work

The version of the agreement attached to a sale order is the version the court approves. If a seller is missing from those signature pages, you have handed a future adversary a clean argument, even when the rest of the document and the order plainly contemplate that seller's participation. Reconcile the preamble, the cover page, the schedules, and the signature blocks before the order is entered, not after a counterparty's litigation counsel finds the gap. The fix here was ministerial only because the Sale Order contained a modification provision and the schedules already conveyed the assets by name. Do not assume your order gives you the same cushion.

Construe the order and the agreement as one instrument

When you draft a sale order, you are drafting the document a court will later read alongside the purchase agreement to decide what was sold. Authorizations that run to "the Debtors," schedules that convey assets of "the Debtors," and negotiated provisions resolving specific counterparty objections all do interpretive work later. They are the anchors that let a court reject a narrow reading built on a single page. The more your order and your schedules name assets and parties specifically, the harder it is for anyone to argue those assets were silently excluded.

Retained jurisdiction is only as good as the dispute's connection to the order

SunPower and iSun mark the line. A dispute that turns on facts antecedent to and independent of your order may land outside the court's enforcement jurisdiction, even with broad retention language. A dispute about what the order means and what it authorized sits squarely inside it. When you need a bankruptcy court to protect a buyer, frame the question as one of interpreting the court's own order, because that is the framing that keeps the matter in front of the judge who entered it.

Know the line between an interest and a defense

Section 363(f) gives a buyer powerful protection against affirmative claims, but it is not a universal shield. A counterparty's affirmative claims for a money judgment are interests that a free-and-clear sale extinguishes. Recoupment is a defense that survives. If your buyer plans to sue on acquired receivables, plan for the counterparty to assert recoupment defensively on the same contracts, and price the litigation accordingly. The buyer here won the question of ownership and still faces a Vermont proceeding over what the receivables are actually worth.

Course of dealing matters

For a full month after the sale closed, the counterparties negotiated with the buyer as the owner of the receivables and never once suggested the assets had not been conveyed. That conduct did not decide the case, but it corroborated the court's construction and undercut the due process argument. The practical lesson runs both ways. If you represent a buyer, contemporaneous correspondence that treats the transfer as complete is worth preserving. If you represent a counterparty, a position you adopt only after litigation counsel finds a defect will be read against the record of how you actually behaved.