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Judge Bruce Black (Bankr. N.D. Ill.) Issues New Decision on Secured Lenders' Right to Credit Bid in Bankruptcy Asset Sales in River Road Hotel Partners, LLC Bankruptcy Cases, Rejects Third Circuit's Decision in Philadelphia Newspapers

 Bankruptcy Judge Bruce Black of the Northern District of Illinois bankruptcy court entered an order today denying a bidding procedures motion filed by River Road Hotel Partners, LLC and its affiliates, which filed chapter 11 bankruptcy cases in August of 2009. The debtors developed and manage the the InterContinental Hotel Chicago O'Hare located in Rosemont, Illinois (a suburb of Chicago close to O'Hare International Airport).

In June, the debtors filed a motion seeking the approval of bidding procedures for the sale of substantially all of their assets. Among other things, the debtors' proposed bid procedures sought to deny their secured creditors the right to submit a credit bid, which the debtors asserted was appropriate because they were proceeding under section 1129(b)(2)(NYSE:A)(iii) of the Bankruptcy Code (11 U.S.C. § 1129(b)(2)(A)(iii)) or, alternatively, because cause exists under section 1129(b)(2)(A)(ii). Two of the debtors' lenders, Amalgamated Bank (acting as trustee of Longview Ultra Construction Loan Investment Fund) and the Federal Deposit Insurance Corporation (as receiver for San Diego National Bank), objected to the proposed denial of their right to credit bid. In support of their objection, they argued that the debtors could only proceed under section 1129(b)(2)(A)(ii) and that the debtors had not demonstrated cause under that subsection to deny the lenders' right to credit bid.

Read more: http://www.netdocketsblog.com/2010/10/judge-bruce-black-bankr-nd-ill-issues.html#ixzz11YaMgm3K


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