Davis Polk & Wardwell LLP; New York
Davis Polk & Wardwell LLP; New York
Credit bidding, which has been used with increasing frequency as a tool for secured creditors to obtain possession of their collateral rather than receive the proceeds of a sale for consideration they view as inadequate, allows a secured creditor to set off sums owed to such secured creditor as a bid in certain sales of property of a debtor’s estate. Sales of property of the estate outside of the ordinary course may be conducted pursuant to §363 of the Bankruptcy Code, as well as pursuant to a plan of reorganization. While §363(k) of the Bankruptcy Code expressly authorizes credit bidding in sales conducted pursuant to §363(b),[1] the Bankruptcy Code does not expressly require that a secured creditor be granted, in all circumstances, the right to credit bid for property of the estate being sold pursuant to a plan of reorganization.
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Nelson Mullins Riley & Scarborough, LLP; Raleigh, N.C.
Many secured lenders do not realize the risks associated with lending upon collateral involving underground storage tanks (USTs). Whereas the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as amended (CERCLA), was amended years ago to protect and insulate from liability lenders who foreclose on environmentally-tainted collateral, USTs are governed by the Resource Conservation and Recovery Act of 1976, as amended (RCRA). Because RCRA does not contain the protections afforded by CERCLA, secured creditors must be much more careful when making loans secured by real property that contains USTs.
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We write to you today as the Committee Co-Chairs of ABI's Secured Credit Committee (the "SCC"). It has been an exciting year for the SCC! We’d like to use this opportunity to update you as to what the committee is doing, and hopefully encourage you to get more involved with the SCC.
In case you have fallen behind on your ABI e-mails, we wanted to alert you to the upcoming SCC program at the Winter Leadership Conference in La Quinta, California. We joined forces with the Asset Sales and Unsecured Trade Creditors committees to put on an exciting program on 363 sales with a special focus on the Polaroid 363 sale. For those of you who are not familiar with the case, we promise a fun ride; the Polaroid 363 sale process had more unexpected twists and turns than most roller coasters. Polaroid is also a fun case to use to focus on good 363 practice and sale legal issues. This program should not be missed! We hope you will join us in La Quinta Dec. 3-5, 2009!
We are also happy to report that the SCC newsletter has been very successful in finding terrific articles from a host of new writers this year. Their focus: cutting-edge issues of particular interest to SCC members! Could it get any better? As the SCC newsletter team is now working on the next two issues, we would be remiss here if we didn't remind you to think about writing for the SCC newsletter or another ABI newsletter or publication. Writing is a great way to get involved! On a related front, we are always looking for the next SCC project or event. Let us know your thoughts—and then lead the charge on moving your project forward. It could be a web-based legal program for SCC members, a guide on secured credit issues, an article for the SCC newsletter or the ABI Journal, planning some social event for secured credit professionals or whatever else interests you. Whatever the case, pursue it! If you are trying to get more involved in ABI, any of the above are good ways to start.
If we can do anything to help you become more involved in the SCC, let us know! Hope to see you in La Quinta!
-- Doug & Scott
