Free With Registration: Chapter 11 Credit Bidding Called Into Question
Shmuel Vasser, a partner at Dechert, and Nicole Duva, an associate at the firm, discuss the recent decision from the Eastern District of Pennsylvania in the Philadelphia Newspapers matter, where the court held that when the sale of the collateral is conducted pursuant to a Chapter 11 plan, the secured lender may not be entitled to credit bid its secured debt. In the current economic environment, the authors write, where credit is tight and many bankruptcy cases are filed in order to consummate sales to the debtors’ secured creditors, either via a stand alone sale or a sale under a plan, the significance of this holding cannot be overstated.
