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We Get a Chapter 11 Case!

posted by Stephen Lubben

The Supreme Court has granted cert. in RadLAX Gateway Hotel, LLC, a case involving the right to credit bid when a sale is done as part of a chapter 11 plan. The Code clearly allows credit bidding in 363 sales, but the courts had split on the issue in the plan context.


I'm glad your Dealbook prediction turned out to be wrong and the court granted cert. I too want to see the 7th Circuit affirmed. The rational of the 3rd and 5th Circuits not only undercuts 363(k) credit bidding protections, but it also would enable a debtor to avoid the consequences of an 1111(b) election by a major secured creditor. Both of these are protections against undervaluations of collateral.

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