This spring the Supreme Court will consider a critical bankruptcy issue: whether a debtor may sell assets free and clear of liens without permitting a secured creditor to credit bid.  Restructuring Review will be providing extensive ongoing coverage of this case:  RadLAX Gateway Hotel, LLC v. Amalgamated Bank, No. 11-166.  This first entry looks at Cadwalader’s prior coverage of key rulings along the road to the Supreme Court and the schedule of key upcoming dates.

The Road to the Supreme Court.

We expect the Supreme Court’s decision in RadLAX to resolve a circuit split over this issue.  The case before the Supreme Court stems from In re River Road Partners, LLC, 651 F.3d 642 (7th Cir. 2011), in which the Seventh Circuit prohibited a debtor from pursuing confirmation of a plan that denied secured creditors the right to credit bid but proposed to provide the indubitable equivalent of their existing secured claims.  Cadwalader reviewed the 7^th Circuit River Road decision here.  RadLAX, which was a party to the River Road appellate litigation, appealed the decision to the Supreme Court and the case was restyled as RadLAX Gateway Hotel, LLC v. Amalgamated Bank.

This ruling conflicted with a 2010 decision In re Philadelphia Newspapers, LLC, 599 F.3d 298 (3d Cir. 2010) in which the Third Circuit allowed a debtor to pursue a chapter 11 plan under the indubitable equivalent prong of section 1129(b)(A) without allowing secured creditors the right to credit bid.  Cadwalader reviewed the Philadelphia Newspapers decision here.

A list of important dates and deadlines in this case can be found here.

posted in Plans/Confirmation