NextEra Ruling Could Support Initial-Bidder Expense Claims

Law360 (June 11, 2021, 12:46 PM EDT) -- On March 15, the U.S. Court of Appeals for the Third Circuit held that a stalking horse bidder may assert an administrative expense claim pursuant to Section 503(b)(1)(A) of the Bankruptcy Code for costs incurred in attempting to close on an unsuccessful transaction, even when the stalking horse bidder is not entitled to a breakup or termination fee.

In In re: Energy Future Holdings Corp., the debtors terminated a merger agreement with a stalking horse bidder due to the stalking horse bidder's failure to obtain the regulatory approval necessary to consummate the contemplated merger.

After the stalking horse bidder's application for...

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