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Secured Creditors’ Rights to Credit Bid: Back on the Auction Block
16 August 2011
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The United States Court of Appeals for the Seventh Circuit, in In re River Road Hotel Partners, LLC, ruled that a plan of reorganization providing for a sale of encumbered assets but denying secured creditors the right to credit bid on such assets may not be confirmed over the objection of secured creditors.
The Seventh Circuit’s holding represents a significant shift in precedent, after prior Third and Fifth Circuit decisions established a trend limiting a secured creditor’s right to credit bid in a cramdown plan.
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