Credit Bidding Dispute Comes Under Scrutiny by Supreme Court
by Joel R. Glucksman
Creditor’s rights are a hot topic in the Supreme Court currently, and the ruling in a current case may give secured creditors more rights when it comes to recouping losses.
Arguments in the case of RadLAX Gateway Hotel center around whether debtors who have entered into Chapter 11 bankruptcy are permitted to sell off secured creditors’ collateral without allowing them to submit a credit bid on the debt under bankruptcy law. The Supreme Court is considering a case that was heard last year and that caused a circuit split. The Seventh Circuit, ruling in the Chapter 11 reorganization of RadLAX Gateway Hotel’s companion company River Road Hotel Partners, disagreed with the Third Circuit’s 2010 decision involving Philadelphia Newspapers.
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