ABI Poll: Credit-Bidding Should Be Allowed in Bankruptcy Sales
An overwhelming majority of respondents in a recent ABI Quick Poll think that credit bidding should be allowed in a bankruptcy sale. Seventy-eight percent of respondents disagreed strongly (58%) or somewhat disagreed (20%) when asked whether credit-bidding shouldn’t be allowed in a bankruptcy sale. Eighteen percent thought that credit-bidding should not be allowed (8% strongly agreeing with the poll question and 10% somewhat agreeing). Three percent did not know had no opinion on the poll.
Credit-bidding is a process in bankruptcy sales used by secured creditors to bid using the amount of debt that they are owed, rather than using cash. The right to credit-bid gives secured creditors more control over the sale of collateral, which normally happens in Bankruptcy Code § 363 sales. In the case of RadLAX Gateway Hotel, LLC v. Amalgamated Bank, the Supreme Court in 2012 held that debtors must permit credit-bidding when selling an asset free and clear of a secured creditor’s lien under a Chapter 11 plan.
Visit http://news.abi.orgquick-pollsarchive to access the results of previous ABI Quick Polls.