Aeropostale Reaffirms Secured Lender Right To Credit Bid

Law360, New York (August 30, 2016, 12:04 PM EDT) -- In a significant victory for secured lenders, Judge Sean Lane of the U.S. Bankruptcy Court for the Southern District of New York entered a decision on Friday that reaffirmed a secured lender’s right to credit bid under Section 363(k) of the Bankruptcy Code and limited the circumstances under which a debtor could defeat such right.

What is Credit Bidding?

Section 363(f) of the Bankruptcy Code permits a debtor, under certain specified circumstances, to sell property of the debtor’s bankruptcy estate free and clear of liens, claims and interests. In some cases, the debtor may do so regardless of whether the lender...

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