Category Archives: RADLAX

Supreme Court Affirms Secured Creditors’ Right to Credit Bid at Plan Sales

On May 29, 2012, the U.S. Supreme Court in RadLAX Gateway Hotel v. Amalgamated Bank, its first significant Chapter 11 opinion in several years, affirmed the U.S. Court of Appeals for the Seventh Circuit’s decision in River Road Hotel Partners v. Amalgamated Bank, prohibiting a debtor from selling assets free and clear of liens under a plan of reorganization without permitting a secured creditor to credit bid. RadLAX resolves a circuit split and reverses prior rulings of the U.S. Court of Appeals for the Third and Fifth circuits endorsing proposed plan sales that did not provide secured creditors with the right to credit bid. Continue reading

RadLAX Review – Supreme Court Requires Debtor to Permit Credit Bidding

The Supreme Court held 8-0 that section 1129(b)(2) of the bankruptcy code requires that if a debtor proposes to sell property under a plan of reorganization it must permit secured lenders to submit credit bids in the sale process. The outcome is consistent with our views of the rights of secured lenders under appropriate bankruptcy practice – however, the Supreme Court’s analysis eschews policy concerns and focuses almost exclusively on the plain language of the statute and applicable canons of statutory construction. Continue reading

RadLax Review – Oral Argument Observations

On Monday April 23, 2012, the U.S. Supreme Court heard oral arguments in RadLAX Gateway Hotel, LLC v. Amalgamated Bank. In this case, the Debtors proposed a plan of reorganization that prohibited their secured lenders from credit bidding on collateral to be sold pursuant to the plan under the indubitable equivalent prong of the cram down provisions of the Bankruptcy Code. Contrary to prior opinions of the Third and Fifth Circuits, the Seventh Circuit held that the plan was improper. Click here to view our previous posts on this case. The Court allotted thirty minutes of argument to RadLAX; and Amalgamated and the U.S. Government shared another thirty minutes of argument time. Restructuring Review attended the argument and, although it is generally difficult to predict how the Court will rule based on the questions directed to counsel during the argument, we note the following observations: Continue reading

Radlax Review – Summary of Petitioners’ Reply Brief

As part of our continuing coverage of RadLAX Gateway Hotel, LLC v. Amalgamated Bank, this is one of a series of posts summarizing the briefs filed with the Supreme Court. This post summarizes the petitioners’ reply brief, filed with Court on March 31, 2012. In the brief, RadLAX argues that the reading of section 1129 of the Bankruptcy Code by Amalgamated (the Respondent) is flawed and that credit bidding does not always maximize the value of the estate. Additionally, RadLAX denies Amalgamated’s allegations that the proposed plan prohibited credit bidding to benefit insiders or a favored third-party bidder and accuses Amalgamated of working to prevent confirmation of a plan that would benefit all creditors. Continue reading

Radlax Review: Summary of Amici Briefs

As part of our continuing coverage of RadLAX Gateway Hotel, LLC v. Amalgamated Bank, this is one of a series of posts summarizing the briefs filed with the Supreme Court. This post summarizes the arguments in the four amici briefs filed with the Court. The United States government, two groups of law professors and a coalition of financial industry trade groups filed amici briefs. The amici reprise many of the arguments raised in the respondent’s brief and all four argued in support of the position that secured creditors must be allowed to credit bid under a plan that provides for the sale of assets free and clear of liens and encumbrances. Continue reading

RadLAX Review: Summary of Respondents’ Brief in Supreme Court Credit Bidding Case

As part of our continuing coverage of RadLAX Gateway Hotel, LLC v. Amalgamated Bank, this is one of a series of posts summarizing the briefs filed with the Supreme Court. This post summarizes the respondents’ brief, which urges the Court to affirm the decision of the Seventh Circuit prohibiting a debtor from pursuing confirmation of a plan that provides for the sale of certain assets free and clear of liens and encumbrances without permitting a secured creditor the opportunity to credit bid. Continue reading

RadLAX Review: Summary of Petitioners’ Brief in Supreme Court Credit Bidding Case

As part of our continuing coverage of RadLAX Gateway Hotel, LLC v. Amalgamated Bank, this is one of a series of posts summarizing the briefs filed with the Supreme Court. This post summarizes the petitioners’ brief, arguing that section 1129(b)(2)(A) of the Bankrutpcy Code permits confirmation of a plan that denies secured creditors their right to credit bid. Continue reading

RadLAX Review: Supreme Court to Consider Validity of Plan Sale Without Credit Bidding in RadLAX Gateway Hotel

This spring the Supreme Court will consider a critical bankruptcy issue: whether a debtor may sell assets free and clear of liens without permitting a secured creditor to credit bid. Restructuring Review will be providing extensive ongoing coverage of this case: RadLAX Gateway Hotel, LLC v. Amalgamated Bank, No. 11-166. This first entry looks at Cadwalader’s prior coverage of key rulings along the road to the Supreme Court and the schedule of key upcoming dates. Continue reading