Norton Bankruptcy Law Advisor: Preserving The Credit Bid: A Balancing Of Interests
Everyone who has attended a commercial bankruptcy seminar or read an advance sheet in the past two years is aware of the "credit bid" controversy arising under the cram-down provisions of i i U.S.C.A. § I 129(b)(2)(A)(ii) and (iii). Under § 1129(b)(2)(A) (iii), can a plan proponent sell property without allowing the creditor secured by that property to credit bid, instead giving that creditor the proceeds of an auction sale or a private sale based on a judicial valuation of the property, on the basis that such proceeds are the "indubitable equivalent" of the creditor's claim? A circuit split on the issue has arisen among the Third, i Fifth,2 and Seventh3 Circuit Courts of Appeals. On December 12, 20 I I, the U.S. Supreme Court granted certiorari in III re River Road Hotel Partiiers, LLC,4 which may, but is certainly not guaranteed to, resolve this conflict.
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