MFA and Associations File Amicus Curiae Brief in RadLAX Gateway v. Amalgamated Bank Case Before U.S. Supreme Court

March 09, 2012

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Topics: American Bankers Association amici curiae, asset-backed financing, available bidders, Bank of America National Trust & Savings Association v. 203 North LaSalle St. Partnership, Bankruptcy Code, bankruptcy estate, bankruptcy law, BFP v. Resolution Trust Corp., bidder, Bloate v. United States, borrowers, cash out, chapter 11 plan of reorganization, clear and manifest contrary intention, Clearing House Association, CMBS, collateral, Commercial Finance Association, commercial mortgage-backed securities, commercial real-estate loans, consenual plans, corporate and commercial loans, Craig Goldblatt, cram-down, credit-bid, D. Ginsberg & Sons Inc. v. Popkin, Danielle Spinelli, Dewsnup v. Timm, Duncan v. Walker, Dynamics Corp. of America v. CTS Corp., Easton v. German-American Bank, Elliot Ganz, Equipment Leasing and Finance Association, Eric F. Citron, existing management, fair and equitable, favored bidders, Financial Services Roundtable, free-and-clear sale, funds of funds, hedge funds, In re Beker Industries Corp., In re California Hancock Inc., In re FCX Inc., In re Murel Holding Corp., In re Philadelphia Newspapers LLC, In re River East Plaza LLC, In re Yale Express System Inc., inconsequential value, indubitable equivalent, investment banks, Judge Hand, Justice Brandeis, lien, Loan Syndications and Trading Association, Louisville Joint Stock Land Bank v. Radford, managed futures funds, manufacturers, Mortgage Bankers Association, mortgage-backed financing, non-consenting class of secured creditors, nonconsensual free-and-clear sale, old equity, Pacific Gas & Electric Co. v. California ex rel. California Department of Toxic Substances Control, present value, private investment fund, RadLAX Gateway Hotel LLC and RadLAX Gateway Deck LLC v Amagamated Bank, real estate mortgage investment conduits, real-estate finance industry, REMICs, Sage v. Central Railroad Co., sale, sale exception, secured credit, secured creditor, secured creditors, secured financing, Securities Industry and Financial Markets Association, Seth P. Waxman, Shivaprasad Nagaraj, speedy-trial deadline, stalking-horse bidder, statutory surplusage, Toibb v. Radloff, trade associations, transfer, undervaluation, valuation, W.B. Worthen Co. v. Kavanaugh, white knight bidders, Wright v. Vinton Branch of Mountain Trust Bank, write of certiorari,
From: MFA, Loan Syndications and Trading Association, American Bankers Association, Clearing House Association, Commercial Finance Association, Equipment Leasing and Finance Association, Financial Services Roundtable, Mortgage Bankers Association, Securities Industry and Financial Markets Association

To:

Supreme Court of the United States

MFA, with the Loan Syndications and Trading Association, SIFMA, and seven other trade associations submitted an amicus brief in the RadLAX Gateway Hotel, LLC v. Amalgamated Bank case before the U.S. Supreme Court. At issue is whether a secured lender always has the right in bankruptcy to credit-bid on its collateral. We believe it does. The right to credit-bid protects secured lenders against potential undervaluation of their collateral in bankruptcy. A new rule allowing debtors to bar credit-bidding would increase the risk of undervaluation, and thus lead to an increased cost of capital. Such a rule would have a significant negative impact on the market for secured financing.

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