Fifth Circuit rules in credit bidder's favor

The U.S. Court of Appeals for the Fifth Circuit has issued a case useful for credit bidders that successfully bid on their own collateral at a bankruptcy sale, which goes forward without a specific agreement "carving out" expenses. Borrego Springs Bank N.A. v. Skuna River Lumber L.L.C., (In re Skuna River Lumber, LLC), 564 F.3d 353 (5th Cir. 2009).

Filed under:
USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Costs in English law, Credit (finance), Debtor, Collateral (finance), Federal Reporter, Marketing, Commission (remuneration), Secured loan, Title 11 of the US Code, United States bankruptcy court, Fifth Circuit
Authors:
Alex Terras
Location:
USA
Firm:
Reed Smith LLP
Secured creditor's loan equitably subordinated; loan found to benefit lender, not debtor

In a harshly worded decision, a federal bankruptcy judge concluded that a syndicated loan product was so one-sided in favor of the lender as to "shock the conscience" of the court. The judge therefore equitably subordinated the secured lender's claim. See In re Yellowstone Mountain Club, LLC, No. 08-61570, 2009 WL 1324950 (Bankr. D. Mont. May 12, 2009).

Yellowstone Mountain Club

Filed under:
USA, Insolvency & Restructuring, Litigation, Reed Smith LLP, Bankruptcy, Credit (finance), Debtor, Unsecured debt, Dividends, Debt, Mortgage loan, Secured loan, US Federal Government, Credit Suisse
Authors:
Alex Terras
Location:
USA
Firm:
Reed Smith LLP