• Buyer Beware: Bankruptcy Court Rules That A Non-Collusive Foreclosure Sale May Be A Bankruptcy “Preference”
  • March 8, 2012 | Authors: Adam H. Friedman; Jayme M. Halli; Jonathan T. Koevary
  • Law Firm: Olshan Frome Wolosky LLP - New York Office
  • Secured lenders seeking to enforce their remedies have sought refuge in the safety net of complying with state law foreclosures as a means of ensuring the validity of the sale. However, a recent case requires lenders to take notice. In re Whittle Development, Inc., presents a case where a U.S. Bankruptcy Court in Texas ruled that a debtor may be able to avoid a validly conducted prepetition foreclosure sale and credit bid of the secured lender on the grounds that the foreclosure constituted a “preferential transfer” under the Bankruptcy Code.