Counterfeit products are destroyed, they are never auctioned. A court cannot order the auction of known counterfeit items, thats just crazy talk. And one cannot resell a counterfeit product, that's illegal.
They are talking about a seller of the original stuff, not about counterfeits.
It's possible that there are ways for the manufacturer to maintain control in case of an authorized seller's bankruptcy (e.g. not actually selling it to them until it's transferred to customer should work), but if they actually transfer it to them they only can demand contractual damages from them, not stop a buyer from doing anything with the product.
It's possible that there are ways for the manufacturer to maintain control in case of an authorized seller's bankruptcy (e.g. not actually selling it to them until it's transferred to customer should work), but if they actually transfer it to them they only can demand contractual damages from them, not stop a buyer from doing anything with the product.