Secured Lender’s Credit Bid Right In Bankruptcy Sale Denied -

A secured creditor’s right to “credit bid” the amount of its allowed claim in a bankruptcy sale of its collateral is an important creditor protection codified in section 363(k) of the Bankruptcy Code. Even so, a ruling recently issued by the U.S. Bankruptcy Court for the Central District of California reaffirms the principle that the right to credit bid a claim is not absolute and may be limited or denied altogether “for cause.”