Seventh Circuit Holds that Free and Clear Sale Plan Cannot be Confirmed Without Preserving Secured Creditor's Credit Bidding Rights – Ruling Creates Circuit Split (The National Law Review)

On June 28, 2011, the Court of Appeals for the Seventh Circuit rejected the views of the Third Circuit and the Fifth Circuit and held that a reorganization plan which proposes the sale of encumbered assets free and clear of liens must honor the secured creditor’s right to credit bid its claim in order to be confirmed under the “fair and equitable” standard of the Bankruptcy Code. The Seventh Circuit in River Road takes a completely different approach to statutory interpretation and is discussed in detail in this article authored by Michael Goldstein. Goldstein joined Goodwin in 2014 and serves as co-chair of the firm’s Financial Restructuring practice. Read the article in The National Law Review here.