In December, SCOTUS agreed to hear a 7th Circuit case, RadLAX Gateway Hotel, LLC v. Amalgamated Bank, on whether a secured creditor can be denied a right to credit bid its note when a debtor sells its collateral, pre-confirmation, pursuant to a plan. The issue arises when a court is evaluating whether a plan satisfies the “fair and equitable” requirement for cram down on non-consenting impaired classes of secured claims, under an 1129(b). 1129(b)(2)(A) provides a set of three disjunctive descriptions of how a plan can provide secured claims with fair and equitable treatment, (i), (iii), or (iii).
The first prong involves either transfer of collateral or use by the debtor whereby the secured creditor’s lien remains, and the creditor receives a cash stream with present value of at least the collateral value and payments totaling the claim. Read more…
