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Bankruptcy court permits second lien creditor to oppose bid procedures for judicial sale

A New York bankruptcy judge held on October 4, 2010, that second lien lenders could object to a debtor’s bid procedures approved by the first lien lenders despite the terms of an intercreditor agreement inIn re Boston Generating, LLC, No. 10-14419 (SCC) (Bankr. S.D.N.Y. Oct. 4, 2010).1 The intercreditor agreement provided the first lien lenders with the “exclusive right to…make determinations regarding the…sale” of the collateral. According to the court, however, the agreement did not expressly preclude the second lien lenders from objecting to bid procedures.

USA, New York, Insolvency & Restructuring, Litigation, Schulte Roth & Zabel LLP, Bankruptcy, Debtor, Unsecured debt, Collateral (finance), Waiver, Fiduciary, Debt, Unsecured creditor, Exclusive right
Third Circuit refines break-up standard

Break-up fees1 remain difficult for initial (or so-called “stalking horse”) bidders to obtain in the Third Circuit. In Kelson Channelview LLC v. Reliant Energy Channelview LP (In re Reliant Energy Channelview LP), No. 09-2074 (3d Cir. Jan.

USA, Insolvency & Restructuring, Litigation, Schulte Roth & Zabel LLP, Shareholder, Debtor, Limited liability company, Testimony, Bright-line rule, Business judgement rule, United States bankruptcy court, Third Circuit