District Court Limits the Right to Credit Bid in Asset Sale Conducted Under Chapter 11 Plan

The District Court for the Eastern District of Pennsylvania, in In re Philadelphia Newspapers, LLC, 2009 WL 3756362 (E.D. Pa. Nov. 10, 2009), recently ruled that debtors can preclude credit bids in asset sales conducted pursuant to a chapter 11 plan (not pursuant to section 363), where secured creditors receive the “indubitable equivalent” of their claims.