Radlax — 'An Easy Case'

Law360, New York (July 10, 2012, 12:36 PM ET) -- "This is an easy case," Justice Antonin Scalia wrote in his brief, 12-page, May 29, 2012, opinion that settles the issue of whether the Bankruptcy Code grants the secured creditor a right to credit bid in an auction sale under a plan. See Radlax Gateway Hotel LLC v. Amalgamated Bank, 132 S. Ct. 2065 (May 29, 2012).

However, interestingly, the opinion barely mentions the infamous Philadelphia News[1] decision from the Third Circuit which was effectively overruled by the Supreme Court, putting to rest a split in the circuits regarding a secured creditor's right to credit bid under a bankruptcy plan.

By way of background, the debtors purchased the Radisson Hotel at Los Angeles International Airport, planning to renovate the hotel and build a parking structure. The debtors, however, ran out of funds, owing the secured creditor over $120 million in principal. The debtors had no real hope of obtaining additional funding