3rd Circ. Blocks Phila. News Lenders From Credit Bids

Law360, New York (March 23, 2010, 4:45 PM EDT) -- A federal appeals court has ruled that bankrupt news publisher Philadelphia Newspapers LLC has the right to bar lenders from credit bidding at an upcoming asset auction sale, affirming a district court's interpretation of the U.S. Bankruptcy Code's latest hot-button statute.

The U.S. Court of Appeals for the Third Circuit on Monday said Bankruptcy Code Section 1129(b), by using the disjunctive “or,” gives debtors leeway to choose among multiple options of paying lenders back on secured claims.

The court ruled 2-1 to approve the terms of...
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