Lender bids in bankruptcy
RadLAX Gateway Hotel v. Amalgamated Bank
In brief
The Court ruled that RadLAX could not sell the collateral under its proposed plan while preventing the bank from bidding with its debt.
- Where it stands
- Decided
Decided · May 29, 2012 · Opinion by Justice Scalia
- What it’s about
- The Supreme Court agreed with the Seventh Circuit that RadLAX could not get approval for a Chapter 11 plan to sell hotel collateral free of Amalgamated Bank’s lien while barring the bank from bidding with the debt it was owed (credit-bidding).
- Who it affects
- RadLAX’s proposed plan could not be approved unless the bank was allowed to bid with the debt it was owed.
Summary: written with AI from the case record.
What it's about
RadLAX proposed giving Amalgamated Bank the equivalent of its claim instead of letting it bid with the debt it was owed.
Question presented
Under the bankruptcy code, may RadLAX pursue a Chapter 11 bankruptcy plan which proposes to sell assets free of liens, without allowing Amalgamated Bank to bid on credit, but instead providing the creditor with the equivalent of its claim?
What the Court decided
Holding
The debtors may not obtain confirmation of a Chapter 11 cramdown plan that provides for the sale of collateral free and clear of the Bank’s lien, but does not permit the Bank to credit-bid at the sale. 651 F. 3d 642, affirmed.
- Result
- Affirmed
The Court's reasoning
The Court relied on the Bankruptcy Code’s clear language, concluding that this kind of sale plan could not be approved without allowing the bank to credit-bid.
The vote
- Majority author
- Antonin Scalia
What's next
To get approval for this proposed sale, RadLAX would have to allow the bank to credit-bid.
Documents
Opinions
Audio
Docket activity
New analysis added
AI analysis generated: Impact Analysis
AI analysis generated: Opinion Summary
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AI analysis generated: Case Briefing
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AI analysis generated: Decision Record
Case data updated: summary, question_presented, generation_metadata
Case data updated: question_presented, extraction_metadata
Audio Recording added: Oral Arguments - RadLAX Gateway Hotel, LLC v. Amalgamated Bank
Opinion added: Opinion
Sources
Primary materials plus reporting. Best-effort analysis: this explainer relies on a mix of primary materials and trusted secondary sources. Official filings and opinions remain authoritative.