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Bankruptcy court applies Third Circuit test for addressing “debt” versus “equity” question.

The Issue

USA, Insolvency & Restructuring, Litigation, Seyfarth Shaw LLP, Bankruptcy, Debtor, Interest, Limited liability company, Debt, United States bankruptcy court, Third Circuit
U.S. Supreme Court resolves circuit split in favor of secured lenders’ credit-bid rights in chapter 11 bankruptcy cases

The U.S. Supreme Court issued a unanimous decision on May 29, 2012, finding that a chapter 11 bankruptcy plan of liquidation is not confirmable over a secured lender’s objection if such plan prohibits the lender from credit bidding at a sale of its collateral.1 See RadLAX Gateway Hotel, LLC et al. v. Amalgamated Bank, No. 11-166, 566 U.S. ___ (2012).

USA, Insolvency & Restructuring, Litigation, Seyfarth Shaw LLP, Bankruptcy, Collateral (finance), United States bankruptcy court, Fifth Circuit, Seventh Circuit