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Credit Bidding And The Design Of Bankruptcy Auctions, Vincent S. J. Buccola, Ashley C. Keller
Credit Bidding And The Design Of Bankruptcy Auctions, Vincent S. J. Buccola, Ashley C. Keller
Vincent S. J. Buccola
Now that most chapter 11 “reorganizations” are glorified asset sales in which the debtor uses bankruptcy to prepare itself for auction, the design of sale procedures has become a paramount concern to bankruptcy practitioners and courts. Among the choices they face is whether — and if so, how — to permit credit bidding, the practice of offsetting the value of a creditor’s claim against the purchase price of the debtor’s assets. This paper shows that credit bidding tends to augment, and cannot depress, total creditor recoveries, and we therefore conclude that it should be a mandatory feature of bankruptcy auctions. …
Designing Bankruptcy Auctions: The Indubitable Value Of Credit Bidding, Vincent S. J. Buccola, Ashley C. Keller
Designing Bankruptcy Auctions: The Indubitable Value Of Credit Bidding, Vincent S. J. Buccola, Ashley C. Keller
Vincent S. J. Buccola
Now that most chapter 11 “reorganizations” are glorified asset sales in which the debtor uses bankruptcy to prepare itself for auction, the design of sale procedures has become a paramount concern to bankruptcy practitioners and courts. Among the choices they face is whether — and if so, how — to permit credit bidding, the practice of offsetting the value of a creditor’s claim against the purchase price of the debtor’s assets. This paper shows that credit bidding tends to augment, and cannot depress, total creditor recoveries, and we therefore conclude that it should be a mandatory feature of bankruptcy auctions. …