Investors in the Australian market are more sophisticated than ever and – unsurprisingly – so too are the restructuring transactions being promoted by these investors. One such transaction is the credit bid. While not a...more
The UK High Court has considered and granted permission for a so called “credit bid” in an application by the Special Administrators of Sova Capital Ltd (in special administration) for a substantial portfolio of illiquid...more
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...more
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...more
The primary investment thesis of a private credit lender is simple — get the loan repaid at maturity. Private credit lenders do not make loans as a means to acquire their borrower’s business. There are circumstances, however,...more
Many investors, including PE firms, are waiting with bated breath to see how the UK economy, currently dependent on COVID-19-related government support, will respond once that stimulus is withdrawn. An increase in UK company...more
What is a credit bid? In certain circumstances, a secured lender can ‘bid’ its secured claim against the purchase price in a sale of the secured assets. The secured lender can compete with cash bids for the collateral,...more
In a year dominated by the pandemic, it is easy to lose sight of some of the more granular legal developments and trends coming over the horizon for 2021 which, in their own ways, can also have a significant impact on the...more
As discussed in Part 1 of this series, the vast majority of California commercial mortgage loan foreclosures are conducted non-judicially. Accordingly, this Legal Update will not address judicial foreclosures. ...more
Under Massachusetts law, a foreclosing lender has a duty of good faith and reasonable diligence to obtain the highest possible price for a property at auction. Until recently, it was considered appropriate for the lender to...more
Recently, in Official Comm. of Unsecured Creditors v. Victory Park Capital Advisors, LLC (In re Katy Indus., Inc.), Case No. 17-50937 (Bankr. D. Del. July 6, 2018), the Bankruptcy Court for the District of Delaware dismissed...more
The Arizona Supreme Court recently addressed what impact, if any, a lender’s credit bid at an Arizona trustee’s sale has on an insurer’s liability under Sections 2, 7 and 9 of the standard’s lender’s title policy (“Policy”),...more
Initially it seemed a universal truth that the holders of senior secured debt, regardless of whether purchased at a discount, had the right to credit bid at a Bankruptcy Code section 363 sale of their collateral, the face...more
The dust has yet to settle on the landmark decision of High Point Bank & Trust Co. v. Highmark Properties, LLC, 776 S.E.2d 838 (N.C. 2015). Before delving into the decision that should serve as a harbinger of imminent and...more
REAL PROPERTY UPDATE - Default Judgment/Voidable: because default judgment was merely voidable, rather than void, where complaint upon which judgment was based failed to state a cause of action, Rule 1.540(b) was not...more
On March 29, 2016, the Federal Communications Commission ("FCC") will begin its Television Broadcast Incentive Auction. Television broadcasters will first bid in a "reverse" auction to return their spectrum to the government...more
This is the fifth in a series of Alerts regarding the proposals made by the American Bankruptcy Institute Commission to Reform Chapter 11 Business Bankruptcies. This alert covers the Commission’s recommendations regarding the...more
In re RML Dev., Inc., 528 B.R. 150 (Bankr. W.D. Tenn. 2014) – A mortgagee sought to modify a sale order to (1) modify the bid procedures and (2) confirm that it had a right to credit bid. The debtor obtained a court...more
Recent legal and regulatory developments have raised issues for those considering a loan-to-own acquisition strategy, and have continued to impact both the structure of highly leveraged financings and the makeup of those...more
In December, the American Bankruptcy Institute issued its Final Report and Recommendations of the Commission to Study the Reform of Chapter 11. The Report is almost 400 pages long and contains more than 200 recommendations....more
Despite lower-than-average Chapter 11 activity in 2014, the legal landscape for distressed investors has continued to evolve, with significant legal developments in credit bidding, make-whole premiums and intercreditor...more
The decisions by the Bankruptcy Court for the District of Delaware in In re Fisker Auto. Holdings, Inc., and the Bankruptcy Court for the Eastern District of Virginia in Free Lance-Star Publ'g Co., have sparked discussions as...more
In re Charles Street African Methodist Episcopal Church of Boston, 510 B.R. 453 (Bankr. D. Mass. 2014) – In connection with a proposed sale of real property, a chapter 11 debtor sought to prohibit the mortgagee from...more
The right to credit bid is one of the most important protections afforded a secured creditor. Recognized under both state and bankruptcy law, the right to credit bid safeguards against undervaluation at an asset sale, whether...more
In the case of Bank of Idaho v. First American Title released June 17, 2014, the Idaho Supreme Court covered some new ground and revisited some old ground....more