Bourbon, Monet, and Tax Credits Find a Niche Market in Bankruptcy

It’s hard to sell bourbon that isn’t bourbon yet.

As more distilleries become insolvent amid weakening demand, bankruptcy trustees tasked with raising as much money as possible to repay creditors face a problem: how to sell off alcohol that needs years of aging before it can be called straight bourbon. Anything before that point is raw distillate with far less value.

Bourbon is just one example of the increasingly eclectic, and often difficult to value, classes of assets being offered for sale through the bankruptcy marketplace. Alongside real estate, unused tax credits, intellectual property, and unpaid judgments, debtors across the financial spectrum have offered a 1990 Ferrari F40, private jets, thoroughbred horses, crypto accounts, and even batches of unused Starbucks gift cards.

The marketplace offers a window into a hidden corner of the economy, where conventional, unconventional, and emerging assets are priced, marketed, and sold under court supervision. What appears for sale often mirrors broader bankruptcy filings and financial stress.

Spirit Airlines, for instance, listed 23 aircraft for sale during its first bankruptcy in 2024 as travel demand softened after the Covid-19 pandemic.

“The economy dictates what we may see and what we may be selling, it’s debtor-driven,” Donald R. Lassman, an attorney and bankruptcy trustee in Massachusetts, said.

Most recently, a Claude Monet ‘Water Lilies’ painting from the collection of bankrupt hedge fund manager George Weiss showed up on Inforuptcy, a subscription website for professionals and distressed-asset investors that scans court documents and sale motions from the government’s online docket system and converts them into listings. Think Craigslist, only for bankruptcy assets.

Inforuptcy, a for-profit business founded in 2012, had about 8,000 listings last year.

“That’s the beauty of bankruptcy, any type of asset can come through the courts,” co-founder Michael Mikikian said. “There’s been crypto, $100 million homes, $100-plus-million companies. Everything flows through here.”

There are deals to be found, but low-ball offers generally won’t go anywhere. Every purchase must survive sale hearings, potential creditor objections, and approval from a judge—though court-approved sales have the advantage of being declared in good faith and free of most liens, claims, and other encumbrances.

“You must read the sale motion, maybe you have to show up to the hearing, or have a security deposit to bid,” Mikikian said.

The Monet

A Monet Nymphéas oil painting from between 1914 and 1917 is something you’d expect to see at a Christie’s or Sotheby’s auction. But since it was part of the Weiss bankruptcy estate, it went through a court-ordered sale.

“There is a limited universe of buyers who can put forward close to $40 million,” said Jennifer Morris, an art historian and attorney at Morris Art Law who represented the eventual buyer. “This isn’t your average art buyer.”

The Monet is one of the artist’s later works, marked by looser and thicker brushstrokes due to his declining eyesight, Morris said. Unlike earlier pieces, this one offers a top-down view onto the water, features pastel colors like violets and blues, and is notable for its balanced, almost square composition that draws the viewer’s eye directly to the center.

It lacks the complexity seen in Monet’s more significant later paintings of ‘Water Lilies,’ said David Shapiro, an art adviser with experience appraising the collection of the Detroit Institute of Arts. They have richer color and “are more resolved paintings, with this painting looking more sketch-like by comparison,” he said.

As of late November, nine Monet paintings of ‘Water Lilies’ have sold at public auctions for more than $50 million, including buyer’s premium, he added.

The bankruptcy court ultimately approved the sale of Weiss’s Monet in October for $36.5 million. There were no competing bids after another deal fell through, when a potential buyer couldn’t secure funding.

The art world has crossed into bankruptcy before, most notably through Detroit’s “Grand Bargain,” launched to prohibit the sale of works from the then city-owned art institute to pay off debt and to help raise funds to protect pensions in 2014. And more recently, artwork from the Boy Scouts of America’s collection, including paintings by Norman Rockwell, was auctioned to raise money for a trust to compensate former Scouts who claimed they were sexually abused.

Shifting Marketplace

More asset categories, such as credits tied to emissions reduction programs and tax credits, are entering the market.

Among recent credit sellers is Nikola Corp., the electric-vehicle maker founded by Trevor Milton, who was convicted of securities and wire fraud and then pardoned last year by President Donald Trump. The company sold environmental credits issued by the Environmental Protection Agency, the National Highway Traffic Safety Administration, and California’s Air Resources Board for $15.3 million.

Manufacturers often buy these credits to comply with federal and state emissions and fuel-efficiency standards.

Tax credits can also be challenging to value, and some could create exposure for buyers, particularly when they are subject to recapture depending on their structure, use, and transfer.

“It’s notoriously difficult to value tax assets, as the tax laws can change at any time and often do change with new presidential administrations, and most credits can only be enjoyed if there’s future income to generate sufficient tax liability,” said Diane Lourdes Dick, who teaches business and tax law at the University of Iowa College of Law.

Other assets seemingly making a comeback, based on Inforuptcy listings, are judgments and claims. Judgments can be sold for $2,500 to $171,300, as in a recent listing. An employment discrimination claim against a health-care tech company was listed at $5,000.

David Pullman, CEO of the Pullman Group, contacts trustees seeking income streams of all kinds, such as music, book, and film and TV royalties, as well as oil and gas royalties. Getting that federal court order finding as a good faith buyer is a win, he explained.

“It’s helped us expedite things in terms of parties that need to pay us. Using a federal court order to resolve these matters works better than just relying on an agreement or assignment,” Pullman said. “You can run into more issues with just an assignment without a court order.”

Gregory G. Plotko, a partner at Barnes & Thornburg LLP in New York who often represents creditors and distressed asset buyers, said investment and credit funds are interested in “esoteric” assets such as class-action claims, tax refunds, and litigation claims. While the legal challenge to Trump’s tariffs is before the Supreme Court, claims for potential tariff reimbursements are being monetized as well, he said.

Due to liquidity constraints and financial needs, distressed companies “won’t wait to see what happens with the cases, if the government will really pay it back, or how long that will take,” Plotko said.

In his role as a trustee, Lassman sometimes prefers to sell judgments instead of trying to collect them to cut litigation costs. The market for judgments isn’t well-defined, he said, so he solicits offers rather than setting prices.

“I want to close the bankruptcy cases and get money to creditors as fast as I can, so it’s much better for me to discount or just to list it for sale and see what kind of offers I can get,” Lassman said.

Tricky Valuations

Intellectual property is a common bankruptcy asset, but valuation can be challenging because it often varies based on interest and market trends. Trademarks are especially difficult to value, said Christine H. McCarthy from Barnes & Thornburg in Washington.

While bankruptcy lets a company break many contracts or obligations attached to its assets, that’s not always true for trademark rights.

“A proper and complete valuation of an IP portfolio requires figuring out exactly what rights are involved and who owns them,” she said.

A recent example involves golf legend Jack Nicklaus, who is challenging his former golf services company’s bid to sell assets in bankruptcy. He claims he holds veto rights over the use, sale, or transfer of IP.

Trustees also struggle over what to do with crypto assets. “First, how do you find them?” Lassman said. “Assume you find them, how do you gain control so you can then sell them?”

With other assets, the challenge is the cost of holding them.

With a thoroughbred horse, “you can’t put it in a warehouse until some later time,” said Ellen Arvin Kennedy, a partner at Dinsmore & Shohl LLP in Kentucky. “But maximizing its value in a bankruptcy would be very difficult.”

The timing of bankruptcy may not align with thoroughbred sales seasons in which sellers benefit from competitive bidding among a large pool of buyers—typically spring and fall—and in the meantime, the estate must cover food, shelter, boarding, and other care to preserve the horses’ value, she added.

“Thoroughbred horses are notoriously difficult to value depending on how they perform, their lineage, how they’ve been trained, and who’s trained them, all those things sort of factor into their value,” Kennedy said.

Holding bourbon barrels until the liquor matures isn’t simple either. Warehousing costs money, and a trustee would need court approval to finance storage. The market is also narrow, with established distillers already tied to their own brands and flavor profiles and less likely to buy an untested product.

“Some investors may say, ‘I’ll buy it, pay for the warehouse space, and see what happens. Maybe bourbon weathers the storm, and by the time it is ready to sell, I can bottle it and make a profit,’” she said.

As for fine art, while the Monet may have been the first to appear on Inforuptcy, it wasn’t the last artwork.

Soon after came works by Sam Gilliam, Bob Thompson, and Norman Lewis, all from the bankruptcy estate of entertainment attorney Ronald E. Sweeney, a collector of African-American art who once represented rapper Lil Wayne.

At least one buyer has expressed interest in one of the paintings, according to a court filing, though talks slowed over the winter holidays.

If the works sell—and a judge is satisfied—the bankruptcy estate could net as much as $1.6 million.