It will be almost Christmas before we know, at least for portfolio companies that can file in the Delaware Bankruptcy Court. The case that will provide guidance is Friendly Ice Cream Corp., where Sun Capital, which is both equity owner and term lender, put Friendly into Chapter 11 on October 5, 2011. It did so after agreeing to a Section 363 purchase agreement with Friendly that would allow a Sun affiliate to buy assets (including desirable lease locations) free and clear by credit bidding outstanding pre-petition term debt owed to Sun.

On November 1, the Delaware Bankruptcy Court approved bidding procedures submitted in connection with the Sun agreement and awarded an affiliate of Sun Capital stalking horse status. The court also approved the $1,000,000 termination expense reimbursement Sun sought.

That was the good news for Sun. The principal setbacks in the bidding procedures order were that...