|Event:||Credit bidding at Sales Under Chapter 11 Plans: The Supreme Court and Radlax Gateway Hotel|
|Location:||Jacob Burns Moot Court Room, Cardozo School of Law|
Martin J. Bienenstock, Partner, Dewey & LeBoeuf
David G. Carlson, Professor, Cardozo School of Law
Gary Holtzer, Partner, Weil Gotshal & Manges LLP
Richard Lieb, Retired Partner, Cooley LLP; Research Professor, St. John's University School of Law
In chapter 11, when secured creditors oppose confirmation of the plan, 11 U.S.C. section 1129(b)(2)(A) describes three options. According to the second option, if the collateral is to be sold free and clear of the security interests, then the secured parties must have the opportunity to credit bid “subject to section 363(k).” According to the third option, the plan may be confirmed if the secured creditors realize “the indubitable equivalent of such claims.” Can a sale free and clear (but prohibiting the bid-in procedure) satisfy the third “indubitable equivalent option, even though it expressly violates the conditions of the second option? This is the question now before the Supreme Court in RadLAX Gateway Hotel, LLC v. Amalgamated Bank, 181 L.Ed. 547 (2011) (cert. granted), and will be the topic of discussion at our panel of distinguished experts in the chapter 11 confirmation process.
NY CLE approval pending.