Secured Lenders Do Not Have an Absolute Right to Credit Bid at Bankruptcy Plan Sales

In a decision that could have wide-ranging consequences for secured lenders and the distressed debt market, a divided U.S. Court of Appeals for the Third Circuit has held that secured creditors do not have an absolute right to credit bid the value of their loans in Chapter 11 plan-based sales of assets.

27 minute read May 25, 2010 at 09:20 AM
By
Sam J. Alberts And David Lee Tayman
Secured Lenders Do Not Have an Absolute Right to Credit Bid at Bankruptcy Plan Sales

In a decision that could have wide-ranging consequences for secured lenders and the distressed debt market, a divided U.S. Court of Appeals for the Third Circuit has held that secured creditors do not have an absolute right to credit bid the value of their loans in Chapter 11 plan-based sales of assets.

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