46 U.S.C. § 31329
Court sales of documented vessels
(a)
A documented vessel may be sold by order of a district court only to—
(1)
a person eligible to own a documented vessel under section 12103 of this title ; or
(2)
a mortgagee of that vessel.
(b)
When a vessel is sold to a mortgagee not eligible to own a documented vessel—
(1)
the vessel must be held by the mortgagee for resale;
(2)
the vessel held by the mortgagee is subject to chapter 563 of this title; and
(3)
the sale of the vessel to the mortgagee is not a sale to a person not a citizen of the United States under section 12132 of this title .
(c)
Unless waived by the Secretary of Transportation, a person purchasing a vessel by court order under subsection (a)(1) of this section or from a mortgagee under subsection (a)(2) of this section must document the vessel under chapter 121 of this title.
(d)
The vessel may be operated by the mortgagee not eligible to own a documented vessel only with the approval of the Secretary of Transportation.
(e)
A sale of a vessel contrary to this section is void.
(f)
This section does not apply to a documented vessel that has been operated only for pleasure.
( Pub. L. 100–710, title I, § 102(c) , Nov. 23, 1988 , 102 Stat. 4747 ; Pub. L. 104–324, title XI, § 1118 , Oct. 19, 1996 , 110 Stat. 3973 ; Pub. L. 109–304, § 15(32) , Oct. 6, 2006 , 120 Stat. 1704 ; Pub. L. 111–281, title IX, § 913(c) , Oct. 15, 2010 , 124 Stat. 3017 .)