Leveling the Playing Field: Seventh Circuit Rejects Philadelphia Newspapers; Upholds Secured Lender Credit Bid Rights in Cram Down Plans

During the last bankruptcy boomlet of 2008-09, many borrowers found themselves faced with lending groups led by aggressive, non-traditional lenders that used the an event of default as an opportunity to force an acquisition of their business. As such, borrowers used the protections of the Bankruptcy Code to try to stave off what they viewed as opportunistic takeover attempts by their lenders. At the center of many of these cases lies the lenders’ right to credit bid. Here we look at two such cases.

To Improve or Not to Improve? Pre-Disposition Preparation and Processing of Collateral

What constitutes commercial reasonableness in preparing and processing collateral for disposition is not expressly set forth in the Uniform Commercial Code. A general rule of thumb has developed under UCC lore: the secured creditor about to dispose of a car on default should wash the car, but probably should not overhaul its engine. This crude example is clear enough, but in between the two extremes of washing a car and overhauling its engine lies an immense middle ground.

The Pendulum Swings Again: The Assault on Secured Creditors (Part 2 of 2)

In Part I of this two-part article appearing in the previous issue of ABF Journal, a leading restructuring attorney teamed up with a well-known turnaround professional to describe how recent court decisions may have seriously eroded secured creditors’ rights. In Part II below, the authors suggest strategies and tactics to help lenders protect themselves.

The Pendulum Swings Again: The Assault on Secured Creditors (Part 1 of 2)

Recent court decisions may have seriously eroded secured creditors’ rights. In this two-part article, a leading restructuring attorney has teamed up with a well-known turnaround professional to describe in Part I new challenges facing lenders, and in Part II to suggest strategies and tactics to help lenders protect themselves.