American Bankruptcy Institute’s “Credit Bidding in Bankruptcy Sales: A Guide for Lenders, Creditors, and Distressed-Debt Investors” examines issues surrounding credit bidding in bankruptcy.

Credit bidding — in which the secured creditor can credit bid the amount of its allowed claim in any sale of its collateral by its debtor — is acknowledged as being an important part of the secured creditor’s bundle of rights, even though some experts argue that the practice can chill bidding or otherwise prevent the debtor from maximizing the value of its assets.

“Credit Bidding in Bankruptcy Sales” details how the courts have handled this debate, with reference to specific cases such as Fisker and Free Lance-Star, and also provides practitioners with the information that they need to know when reviewing credit agreements, debtor-in-possession financing orders and sale orders related to credit bidding.

Authors Paul R. Hage of Jaffe Raitt Heuer & Weiss (Southfield, MI), Brian M. Resnick of Davis Polk & Wardwell (New York) and Brent Weisenberg of Ballard Spahr (New York) cover when, and to what extent, credit bidding is allowed, as well as how a credit bid might be submitted in a bankruptcy sale, and they provide an in-depth analysis of how credit bidding affects professional fees. Listen to an ABI Podcast featuring Hage discussing the book and issues surrounding credit bidding in bankruptcy.

“Credit Bidding in Bankruptcy Sales: A Guide for Lenders, Creditors, and Distressed-Debt Investors” is currently available for purchase in the ABI Bookstore.