First and Second Liens

One of the leading issues currently faced by bankruptcy practitioners can be found in the frequently recurring disputes between first and second lienholders ' an issue that was recently addressed in the context of a ' 363 sale. In <i>Contrarian Funds, LLC v. Westpoint Stevens, Inc.</i> (<i>In re Westpoint Stevens, Inc.</i>), 333 B.R. 30 (S.D.N.Y. 2005), the United States District Court for the Southern District of New York (the District Court) reversed a ' 363(b) sale order (Sale Order) of the bankruptcy court on the grounds that the Sale Order authorized an in-kind distribution of equities ' rather than cash ' to first lien holders outside the Chapter 11 plan confirmation process.