Zone of Insolvency

Zone of Insolvency

Tag Archives: Credit Bidding

Limiting the Right to Credit Bid: A New Trend?

Posted in US

478243863Earlier this month, in the In re The Free Lance-Star Publishing Co. bankruptcy cases, Judge Huennekens of the Bankruptcy Court for the Eastern District of Virginia issued a memorandum opinion which laid out the Court’s decision limiting the right of a secured creditor to credit bid.  The Court, pointing to a “perfect storm” of factors which required the “curtailment of . . . credit bid rights,” limited a loan purchaser’s asserted $39 million credit bid to $13.9 million.  The factors cited by the Court for limiting the bid included the creditor’s (i) less than fully-secured status; (ii) overly zealous loan-to-own … Continue Reading