Credit Bidding by Secured Lenders in Bankruptcy Sales

Description

In the current economy, lenders are being forced into defensive credit bidding more frequently. Credit bidding can be a powerful tool for the secured lender but presents a number of challenges and pitfalls to navigate and overcome.

Lender disputes in syndicated credit facilities are common, and recent case law has addressed disputes between majority and minority lenders regarding consent to credit bid and the authority of the syndicate’s agent to bind all lenders.

Intercreditor disputes are another hurdle and are only now being tested in bankruptcy litigation. Case law is very much in flux with several recent cases addressing debtor's attempts to preclude the lender’s right to credit bid in its reorganization plan.

Listen as our authoritative panel of attorneys discusses key issues facing lenders in credit bidding in bankruptcy and best practices to protect their bid and resolve various disputes in the process.

Outline

1. Strategic decisions regarding credit bids
   1. Amount of bid
   2. Timing of bid
   3. Secured v. undersecured claims
   4. Bidding for assets in addition to lender’s collateral
2. Resolving disputes
   1. Collective action in syndicated loan facilities
      1. In re Chrysler
      2. In re GWLS Holdings
      3. In re Delphi Corp
   2. Intercreditor disputes — second lien holders
   3. Negotiations with committees of unsecured creditors
3. Challenges to right to credit bid
   1. Section 363 sale v. sale under plan of reorganization
      1. In re Pacific Lumber
      2. In re Philadelphia Newspapers
   2. Denial of right to credit bid “for cause”
   3. Equitable subordination of lien — loss of lender’s priority

Benefits

The panel will review these and other key questions:

• What issues arise when the lender bids for a basket of assets that includes assets of value in addition to the lender's collateral?
• What rights do minority lenders in a syndicated loan facility have to block the agent from credit bidding?
• Does a lender's right to credit bid differ under a Section 363 sale versus a sale under a plan of reorganization?
• What are the trends in enforcing intercreditor agreements in bankruptcy?

Webinar/Teleconference

Strafford webinars/teleconferences offer several options for participation: online viewing of speaker-controlled PowerPoint presentations with audio via computer speakers or via phone; or audio only via telephone (download speaker handouts prior to the program).  Please note that our webinars do not feature videos of the presenters.

CLE Credit

Strafford's live seminars qualify for CLE in every state that accredits webinars. They offer you a high quality, cost effective, and convenient CLE option, with no lost travel time or expenses.

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