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December 13, 2011

Supreme Court Granted Cert. Today in RadLAX Gateway Hotel, LLC vs. Amalgamated Bank

Jon and Roksana,

A note to let you know that the Supreme Court granted cert. today in RadLAX Gateway Hotel, LLC vs. Amalgamated Bank (11-166) rising from the 7th Circuit, containing an important chapter 11 issue:  whether a bankruptcy court may confirm a plan of reorganization that proposes to sell substantially all of the debtor’s assets without permitting secured creditors to bid with credit.

The Third and Fifth Circuits hold that creditors are not entitled to credit bid under these circumstances, and the Seventh Circuit held to the contrary.  There doesn’t seem to be definitive 9th Circuit case law on this issue.

A group of “Bankruptcy Scholars” presented an amicus brief supporting review of the 7th Cir. decision, arguing that “(1) the appellate courts have extensively considered the question presented; (2) the doctrine of “equitable mootness” impedes the development of deeper splits over legal questions concerning plans of reorganization; (3) an unusually permissive venue statute allows debtors to forum shop, increasing the importance of providing a uniform national construction of the Bankruptcy Code; and (4) the answer to the question presented holds billions of dollars in the balance.”

Here is the 7th Circuit Opinion which will be reviewed:

http://www.bloomberglaw.com/public/document/River_Rd_Hotel_Partners_LLC_v_Amalgamated_Bank_651_F3d_642_7th_Ci

Regards, Judge Clarkson

December 13, 2011 | Permalink

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