Credit bidding has historically been a valuable right afforded to secured creditors under the Bankruptcy Code and state law.
Credit Bidding: Secured Creditor Beware
The right to credit bid under section 363(k) of the Bankruptcy Code can be an important safeguard that protects a secured creditor against the risk that its collateral may be undervalued at an asset sale, and courts have traditionally described a secured creditor's right to credit bid as fundamental and near absolute. However, as some bankruptcy courts have recently reminded us, the right is not absolute, and may be limited by the bankruptcy court "for cause" under section 363(k) of the Bankruptcy Code.
By
Linda V. Donhauser And Kristen M. SiracusaThis premium content is locked for The Bankruptcy Strategist subscribers only
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