What is the Rule 6004(h) stay, and should a sale order waive it?
Bankruptcy Rule 6004(h) stays an order authorizing the use, sale or lease of estate property for 14 days after entry unless the court orders otherwise. Counsel ask to waive it when delay costs value. For a SourceX records license, the stay sets the earliest safe closing and delivery date.
What is the Rule 6004(h) stay?
Bankruptcy Rule 6004(h) is a 14-day automatic stay on an order authorizing the use, sale or lease of estate property, unless the court orders otherwise. The buyer or licensee cannot safely close, and the estate cannot safely hand anything over, until the stay runs out or is waived.
The rule exists to give a losing party time to appeal before property leaves the estate. A companion rule, 6006(d), applies the same idea to orders authorizing the assignment of executory contracts and unexpired leases. Read the current text of both rules, and any local rules, before drafting an order.
This page is a definition for restructuring counsel. It matters to a SourceX introduction for one practical reason: the stay sets the earliest date a records license can close and the earliest date an export can safely start.
How the stay works in practice
Most proposed sale orders include a sentence that says the order is effective immediately and that the stay is waived. A court can grant that request, shorten the stay or deny it, and a credible plan to appeal by an objector is one reason it may do the latter two.
- The court enters an order approving the sale, use or lease.
- The 14-day clock starts on entry, not on the hearing date.
- If the order waives the stay, the transaction can close on entry.
- If it does not, closing waits for day 15, or for an earlier date the court sets.
- A timely appeal or a motion for a stay pending appeal changes the analysis again, and good-faith buyer protection under section 363(m) becomes the question to review with counsel.
This is general information, not legal, tax or financial advice. Confirm with your own counsel before acting.
Why waiving the stay is requested
Counsel usually asks to waive when delay costs the estate money or value. For a business with records, delay has specific costs.
| Pressure | Why it argues for a waiver | What to check first |
|---|---|---|
| Subscriptions lapsing | A SaaS or hosting contract may end before day 15 and archives can be purged | Renewal dates and vendor deletion policies |
| Payroll and rent | Each week of operation burns cash that a prompt closing would stop | The budget under any cash collateral or DIP order |
| Buyer deadlines | A buyer may have walk rights tied to a closing date | Outside dates in the purchase or license agreement |
| Key employees leaving | The people who can run exports often leave once a sale is announced | Retention terms and who holds admin credentials |
| Lender milestones | A DIP loan may require a sale order and closing by set dates | Milestones in the DIP credit agreement |
When keeping the stay is the better answer
A waiver is not free. Keep the 14 days, or ask for a shorter period, when an objector has real appellate grounds, when the buyer wants appeal protection and will not close at risk, or when the licensed material includes categories a privacy ombudsman or the court is still reviewing. Where customer personal information is involved, section 363(b)(1) adds its own conditions and may require a consumer privacy ombudsman.
Rule 6004(h) versus nearby terms
| Term | What it does | Relationship to a records license |
|---|---|---|
| Rule 6004(h) | Stays orders on use, sale or lease for 14 days unless the court orders otherwise | Sets the earliest safe closing and delivery date |
| Rule 6006(d) | Same stay for assignment of executory contracts and leases | Matters if a vendor or data contract is assumed and assigned |
| Section 363(m) | Protects a good-faith purchaser if a sale order is later reversed | Why buyers ask for a waiver or wait out the stay |
| Stay pending appeal | A court-ordered stop issued after an appeal is filed | Can freeze delivery even after the 14 days |
What it means for a SourceX records license
A records license is not a sale of the company's business, and SourceX deals are licenses where the company keeps ownership. If the estate licenses records, debtor-side counsel will usually still need court approval if the license is outside the ordinary course, and the same stay question arises.
Practical points to plan around:
- Export date: do not schedule a data export or any handover for a date inside the stay unless the order waives it.
- Preservation first: if a system will be shut off before day 15, preserve a full export now, even though nothing is delivered. Preserving is different from licensing.
- Agreements first: nothing is delivered to a buyer without an executed agreement and the company's authorization, and de-identification rules are agreed before work starts.
- Cloud accounts: the guide to finding a debtor's cloud accounts helps you list which subscriptions may lapse during the stay.
A checklist before you ask for the waiver
- The order names the exact assets or rights being licensed, including any records
- Renewal and purge dates for hosting, email and collaboration tools are listed
- Someone with admin rights is identified and retained through closing
- Any privacy-policy constraint on customer data is reviewed under the Code
- The lender's milestones and the budget are consistent with the closing date
- Rights to the records are clear; see UCC-3 terminations and lien clearing for stale filings
Next step
If you represent a debtor, trustee or lender and want a preliminary view of whether the records are worth a licensing look, run the company fit checker and compare the result with the who qualifies baseline. Then register as a partner to make the introduction, or have the company's authorized sponsor apply at sourcex.si/apply.
The partner reward is a share of SourceX's fee and is never deducted from what the company receives. It is payable only after the buyer pays and SourceX receives its fee, and no reward is guaranteed. Check your own professional rules on referral fees, and any court-approval requirements, first. See the program terms.
- Step 1Share your linkSend your personal link to a company you know.
- Step 2Company appliesThe company applies itself at /apply.
- Step 3Buyer selects and paysThe buyer selects and pays for the data and SourceX receives its fee.
- Step 4You get your rewardYour share of SourceX fees becomes payable.
Common questions
Can the court shorten the Rule 6004(h) stay instead of waiving it?
Yes. The rule says the stay applies unless the court orders otherwise, so a judge can waive it, shorten it or set a specific date. Counsel often propose a short stay, such as a few days, when an objector exists but delay is costly. Check the court's local practice and the judge's preferences.
Does the stay apply to a license of records or only to a sale?
The rule covers orders authorizing the use, sale or lease of property other than cash collateral. Whether a records license is within that language, and whether it needs approval at all, depends on the structure and on whether it is in the ordinary course. Ask your counsel how the court will treat it.
Does the 14 days run from the hearing or from entry of the order?
The period runs from entry of the order, not from the hearing date. If the court rules at a hearing but the written order is entered days later, the clock starts at entry. That is why counsel track docket entry dates carefully when planning a closing.
What if a system will be shut off before the stay ends?
Preserve a full export of the records while the system is still live, and document who holds it. Preserving is not delivering. Nothing goes to a buyer until the agreement is signed, the company authorizes it and the order allows the closing, so the stay and the preservation step are separate.
Does a waiver of the stay guarantee the buyer is protected?
No. A waiver lets the parties close immediately, but an appeal can still be filed, and protection for a good-faith purchaser depends on the facts and the findings in the order. Buyers and their counsel decide how much appeal risk they will take.
Related pages
Free resources
- AI readiness assessment — Ten questions, five dimensions, a score out of 100.
- EBITDA calculator — Reported and adjusted EBITDA from net income.
- MOIC calculator — Multiple on invested capital from realized and unrealized value.
- All free tools · MCP resource center
By SourceX Partnerships Team · Published 2026-10-09 · Updated 2026-10-09
Know a US company with valuable proprietary data?
Become a referral partner from anywhere we support, get your link and introduce an owner or authorized decision-maker.
Refer a company →I own a business
Explore licensing your company's data to AI developers worldwide. Start a short assessment; no uploads needed.
Start an assessment