LexisNexis® CLE On-Demand features premium content from partners like American Law Institute Continuing Legal Education and Pozner & Dodd. Choose from a broad listing of topics suited for law firms, corporate legal departments, and government entities. Individual courses and subscriptions available.
As I noted three years ago in my "What's
Bothering Ruthie?" post on Justice Ginsburg's one-liner that
stopped the Chrysler sale dead in its tracks, today's Supreme Court oral
argument in RadLAX Gateway Hotel, LLC v. Amalgamated Bank (transcript)
left no doubt about what's bothering the Supreme Court Justices in approaching
the question of whether a debtor can cram a chapter 11 plan down a secured
lender by selling its collateral at auction without allowing it to credit bid
in its claim. And while lenders viscerally support the Seventh Circuit's
ruling below (as the protest board paraded before the Court this morning leaves
no doubt), the final result is no "roll" for them (as one seasoned
So what's bothering the Justices in this case? Here
are questions they asked, grouped by category:
So where do all these questions leave us? With
anything but a slam dunk for the lenders, to be sure. BAPCPA stripped
bankruptcy judges of much discretion and the Justices here will grapple with
whether Congress in 1978 also intended to likewise limit judicial discretion in
cramdowns of secured creditors.
Notably, there was an empty chair in the Court, with
Justice Kennedy having recused himself from the deliberations. Someone
suggested that Justice Kennedy recused himself because he or a friend once
stayed at the Radisson LAX and
so disliked it that he could no longer be objective. As a result,
however, I have some concern that we'll witness another Marathon-ish
vacuum from a 4-4 split on an opinion of critical importance to the bankruptcy
world. Yet I doubt Justice Roberts--who showed the most even hand at oral
argument today--will let that happen. He certainly didn't appear to have
made his mind up yet, but when he does, I expect a majority of the Court will
I also expect the decision will follow through on (i) the
reasoning in Ransom where an 8-1 majority looked to the "text,
context, and purpose of the statutory provision at issue" to interpret
a Bankruptcy Code provision and (ii) the Court's
reasoning in Howard Delivery which showed the "plain
meaning" doctrine to have its own bankruptcy ocular.
Finally, don't forget to sign up for the first
post-RadLAX argument webinar at 12:30 eastern on April 24 to discuss the
RadLAX oral argument, sponsored by Wilmer Hale and LSTA, and featuring
LSTA's Elliot Ganz and WilmerHale Partners Craig Goldblatt and Danielle
Spinelli (all of whom were on an amicus
brief filed with the Court for a number of leading financial industry trade
associations). Here is the link
to the webinar. Here's
the SCOTUS Blog page linking to all briefs filed in the case.
Thanks for reading!
Read the RadLAX Oral Argument Part 1: A Chicago Bankruptcy Case Lands at the US Supreme Court
To read more items by Steve Jakubowski, visit the
Bankruptcy Litigation Blog
For more information about LexisNexis
products and solutions connect with us through our corporate site.