Summary
United Kingdom, Banking, Company & Commercial, Insolvency & Restructuring, Litigation, Mayer Brown, Sanctions, Financial Conduct Authority (UK), High Court of Justice (England & Wales)
EXECUTIVE SUMMARY
United Kingdom, Company & Commercial, Insolvency & Restructuring, K&L Gates LLP, Coronavirus, HM Revenue and Customs (UK)
Credit bidding is a mechanism, enshrined in the US bankruptcy legislation, whereby a secured creditor can ‘bid’ the amount of its secured debt, as consideration for the purchase of the assets over which it holds security. In effect, it allows the secured creditor to offset the secured debt as payment for the assets and to take ownership of those assets without necessarily having to pay any cash for the purchase. Whilst there is no statutory equivalent in the UK, the process has evolved here into an accepted practice.