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The Bankruptcy StrategistLJN NewslettersNewsSections

Seventh Circuit Upholds Secured Creditors' Credit Bid Rights Under Cramdown Plan

By Lawrence V. Gelber, James T. Bentley, and Mike Paek
August 29, 2011

On June 28, 2011, in a decision of great significance to secured creditors, the United States Court of Appeals for the Seventh Circuit held that secured creditors have a statutory right to credit bid their debt at an asset sale conducted under a so-called “cramdown” plan. River Rd. Hotel Partners, LLC v. Amalgamated Bank, ___ F.3d ____, 2011 WL 2547615 (7th Cir. Jun. 28, 2011). This decision is directly at odds with recent decisions in the Third and Fifth Circuits regarding a secured creditor's right to credit bid under a plan. See In re Phila. Newspapers, 599 F.3d 298 (3d Cir. 2010); In re Pacific Lumber Co., 584 F.3d 229 (5th Cir. 2009).

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