By Vijay Malik, 2012 J.D. Candidate
The Supreme Court recently granted certiorari in River Rd. Hotel Partners, LLC v. Amalgamated Bank, 651 F.3d 642 (7th Cir. 2011). In that case, the debtor, RadLAX Gateway Hotel, LLC, owned a hotel, and in a desire to expand, took out a construction loan to fund the expansion. The debtor ultimately filed for Chapter 11 protection, and in its plan, proposed to sell substantially all of its assets without allowing the creditor to credit bid at the sale. The creditor, Amalgamated Bank, objected to the plan on the grounds that it was allowed to credit bid when a debtor proposes to sell its collateral free of liens. The Bankruptcy Court agreed with Amalgamated, and the U.S. Court of Appeals for the Seventh Circuit affirmed the bankruptcy court’s decision. The debtor appealed the Seventh Circuit’s decision.
The question the Supreme Court will address is whether a debtor may propose a Chapter 11 plan which proposes to sell all of its assets, free of liens, while providing the debtor the “indubitable equivalent” of its claim under Section 1129(b)(2)(A)(iii) of the Bankruptcy Code but not allowing the secured creditor to credit bid.
To read the Seventh Circuit’s decision, petition for certiorari, brief in opposition, petitioner’s reply, and amicus briefs, please click here.
|Mr. Malik is a law student at Creighton University in Omaha, Nebraska. Prior to law school, Mr. Malik worked in real estate private equity and investing banking for various firms in New York and Washington, D.C.|