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363 Sale

Questionable Right to Credit Bid

90 Second Lesson: The (Arguable) Right to Credit Bid in Plan Sales

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 […]


Basic Chapter 11 Concepts

Dealing with Corporate Distress 06: Four Basic Chapter 11 Concepts to Know Before We Go any Further

The ABCs of ABCs, Business Bankruptcy, & Corporate Restructuring/Insolvency In the last two installments of this series, we introduced you to things a company should consider before deciding whether to file chapter 11, and a timeline for understanding how a “typical” chapter 11 case proceeds. In this quick little ditty, we want to make sure […]


Penthouse Magazine bankruptcy

From Penthouse to Ground Floor: The Penthouse Magazine Bankruptcy

Creative Destruction and an Inevitable Fall: What Can We Learn From the Penthouse Magazine Bankruptcy? Penthouse International, publisher of Penthouse Magazine, sold for $11.2 million in June of 2018. The company was worth about $700 million (adjusted for inflation) at its height. The latest Penthouse Magazine bankruptcy highlights just how far Penthouse has fallen, and […]


Boston post-petition interest bankruptcy case

Lender vs Debtor on the Payment of Post-Petition Interest

The Battle Over Post-Petition Interest for Oversecured Creditors In bankruptcy, an oversecured creditor (in which the value of its collateral is higher than its claim) is first in line to be paid. Unfortunately, oversecured creditors are also entitled to post-petition interest (interest that accrues or would accrue after the start of bankruptcy proceedings, regardless of […]


Issues in healthcare restructuring

Potential Pitfalls and Opportunities in Healthcare Restructuring

How Unique Issues in Healthcare Restructuring Set It Apart from Corporate Restructuring   Over the past decade, arguably no industry experienced such dramatic regulatory change or consistent legislative uncertainty as healthcare. Today, continued efforts to repeal, defund, replace, or amend the Affordable Care Act—coupled with rising pharmaceutical costs, increased competition, massive capital investment expenses, etc.—virtually […]


Buying a distressed business

90 Second Lesson: First Step Before Buying a Distressed Business

How Types of Sales Affect the Purchase of a Distressed Business   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 What is the first integral decision a buyer must make […]


Chilled bidding

Limiting Credit Bidding in Section 363 Bankruptcy Sales Post-In Re Aéropostale, Inc.

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 […]


363 Sale vs Article 9 Sale

90 Second Lesson: Selling Collateral in a 363 Sale vs Article 9 Sale

Why a Secured Creditor May Push to Sell Collateral Outside of Bankruptcy   Editors’ 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: An investment banker recently wrote in, saying: “I am currently […]


Wind Turbine LLC tries to challenge a 363 sale

Can You Challenge a Section 363 Sale? Bid Now or Forever Hold Your Peace

How Natural Chem Holdings Tried to Beat the Wind in a 363 Sale Appeal    You would like to buy wind turbines in a lease-to-own scenario—that is, you would like to take possession of certain items and pay over time or in a lump-sum at some point in the future. You prefer this mode to […]


Bankruptcy gifts from senior class to junior creditor

Bankruptcy Gifts: When a Court Will Look a Gift Horse in the Mouth

Is the Jury In or Out on Chapter 11 Bankruptcy Gifts?   The gifting doctrine in bankruptcy is not new and often is used to obtain creditor consensus to a debtor’s proposed exit—either through a chapter 11 plan or a Section 363 sale. Bankruptcy “gifts” typically involve a structurally senior class voluntarily giving some of […]


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