Fisker and Free Lance Star Anomalies Signs Trend

Section 363(k) of the Bankruptcy Code permits a secured creditor to credit bid at a sale of its collateral unless the court orders otherwise for cause. If the secured creditor is the winning bidder, it may offset its claim with the purchase price of the collateral. The U.S. Supreme Court’s Radlax opinion (Radlax Gateway Hotel, LLC v. Amalgamated Bank, 132 S. Ct. 2065 (2012)) affirmed secured creditors’ rights under section 363(k), but two 2014 opinions addressing credit bidding issues found cause to limit section 363(k) credit bidding. During our call we will analyze whether these two 2014 opinions are outliers, based on unique facts, or if the new opinions represent the start of a trend of which we should be aware.