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Credit (Bid) Where Credit's Due

By James H.M. Sprayregen, Christopher J. Marcus, David A. Agay and Benjamin J. Steele
December 17, 2009

The recent turn in the credit cycle has featured more complex capital structures with multiple tranches of secured debt. For years, commentators have written about the proliferation of secured debt and considered how this would impact in-court and out-of-court restructurings. However, few commentators foresaw the current issues swirling around an aspect of the Bankruptcy Code ' credit bidding ' that prior to the recent bankruptcy wave rarely drew much attention. This article focuses on the ability of a secured creditor to credit bid its claims at a sale under ' 363(k) or ' 1129(b)(2)(A)(ii).

Credit Bidding Under the Code

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