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Search Results for: "Credit bid"

Understanding the Right to Credit Bid After Radlax [Editor’s Note: this is part of our irregular series in which we answer readers’ questions. If you have a question, submit it to [email protected] and we will try to answer it.] Question A private equity investor wrote in recently asking us to address credit bidding in the aftermath of Radlax. Answer For investors who are unfamiliar with the concept, the right to credit bid is the “right of the secured creditor under the Bankruptcy Code to use its secured claim against a […]

Chilled Credit Bidding and the Section 363 Sale Section 363(k) of the Bankruptcy Code (the “Code”) allows a secured creditor to bid at a section 363 sale and use the amount of their claim to offset the purchase price at the sale, called “credit bidding.” A court may limit this right “for cause.” The “for cause” standard is not defined in the Code, and disagreement exists as to what constitutes “for cause.” Traditional bases for limiting credit bidding include challenges related to the lien itself, failure to correctly assert the […]

Should Secured Creditors and Buyers of Distressed Assets Worry About Facing Limits On Their Credit Bids? One way to purchase assets (including the assets of a business as a going concern) is to prevail at a foreclosure sale or a § 363 bankruptcy auction with a credit bid. The first step is to acquire the senior secured debt on the assets at a steep discount. The next step is to outbid cash bidders with a credit bid up to the face value of the debt. In 2012, the US Supreme […]

To purchase one’s collateral without cash. The term “credit bid” is a colloquial term (it does not appear in the Bankruptcy Code) for a secured creditor’s right to bid at the sale of its collateral and then, at closing, to offset the purchase price by the value of its outstanding claim secured by the collateral being purchased. This colloquial term aptly describes a secured creditor’s rights as articulated in section 363(k) of the Bankruptcy Code.  A creditor with an allowed secured claim may credit bid at a sale of its collateral […]

Don’t expect to challenge a 363 sale so easily. Find out why you should pursue other options for purchasing assets from a distressed seller.

Erica DeGlopper’s 48% distributional interest in Art Shay Archive Project, LLC will be sold on November 8th, 2023.

An assignment for the benefit of creditors (ABC) can be a faster and more cost-effective alternative for a chapter 11 or 7 liquidation. Understand more about this alternative for selling distressed assets effectively.

In a Delaware assignment for the benefit of creditors case, court approval is not required for a sale, but, time, money, and preference can factor.

Let’s take a look at bankruptcy from the secured creditor’s perspective (they play a large role in a distressed business situation). Read about what a secured creditor should know when a business files for bankruptcy.

Assignment for Benefit of Creditors (ABC) might mitigate loss and preserve going-concern value for the company and its secured creditor.

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