• Secured Creditor’s Right To Credit Bid Protected
  • June 1, 2012 | Author: Randye B. Soref
  • Law Firm: Buchalter Nemer A Professional Corporation - Los Angeles Office
  • In a big win for creditors, the U.S. Supreme Court unanimously ruled on May 29, 2012 that a secured creditor must be granted the right to credit bid up to the full amount of its claim where the debtor pursues a Chapter 11 plan that proposes to sell assets free and clear of liens. RadLAX Gateway Hotel, LLC v. Amalgamated Bank, No. 11-166 (U.S. May 29, 2012). The decision strengthens a secured creditor’s ability to maximize repayment and recovery against its collateral, removes a Chapter 11 debtor’s unfair advantage to attempt a sale of its assets at the creditor’s expense, and provides creditors with assurance that their rights will be protected.