credit bidding
USA
credit bid, Also known as credit bidding. The right of a secured creditor under the Bankruptcy Code to use its secured claim against a debtor as currency in an auction of its collateral in a debtor's Section 363 sale (§ 363(k), Bankruptcy Code). In most jurisdictions, the secured creditor can offset up to the full face amount of its claim against the purchase price of the collateral. This mechanism allows a secured creditor to acquire the assets of the debtor on which it holds a lien in exchange for a full or partial cancellation of the debt, allowing it to acquire the assets without paying any actual cash for them.
Credit bidding can be used as a defensive strategy by lenders to protect the value of their collateral from falling asset prices. It can also be used as a defensive loan-to-own strategy by investors to acquire distressed assets at below-market prices.
For more information on credit bidding, see Practice Note, Credit Bidding in Section 363 Bankruptcy Sales (www.practicallaw.com/7-500-4339).

Practical Law Dictionary. Glossary of UK, US and international legal terms. . 2010.

Look at other dictionaries:

  • credit bid — USA credit bid, Also known as credit bidding. The right of a secured creditor under the Bankruptcy Code to use its secured claim against a debtor as currency in an auction of its collateral in a debtor s Section 363 sale (§ 363(k) …   Law dictionary

  • Credit crunch — For information about the late 2000s credit crisis, see Financial crisis of 2007–2010. For the credit crunch used in closing credits, see Closing credits#Marginalization for television promotion. A credit crunch (also known as a credit squeeze or …   Wikipedia

  • Credit cycle — Economic Waves series (see Business cycles) Cycle/Wave Name Years Kitchin inventory 3–5 Juglar fixed investment 7–11 Kuznets infrastructural investment 15–25 Kondratiev wave 45–60 The credit cycle is the expansion and contraction of access to… …   Wikipedia

  • Preferential bidding system — Preferential bidding is a method of solving transport workforce schedules consisting of specific flights and certain qualified crewmembers, or pairings , while allowing those crewmembers to request periodic work schedules using weighted… …   Wikipedia

  • Business and Industry Review — ▪ 1999 Introduction Overview        Annual Average Rates of Growth of Manufacturing Output, 1980 97, Table Pattern of Output, 1994 97, Table Index Numbers of Production, Employment, and Productivity in Manufacturing Industries, Table (For Annual… …   Universalium

  • Metro-Goldwyn-Mayer — MGM redirects here. For other uses, see MGM (disambiguation). Metro Goldwyn Mayer Studios Inc. Type Privately held company[1] Industry Film …   Wikipedia

  • Online dispute resolution — Alternative Dispute Resolution Arbitration …   Wikipedia

  • Nationalisation of Northern Rock — People queuing at a branch of the Northern Rock bank in Brighton on 14 September 2007. In 2008 the Northern Rock bank was nationalised by the British Government, due to financial problems caused by the subprime mortgage crisis. In 2010 the bank… …   Wikipedia

  • Feed-in tariff — Part of a series on Green economics Concepts …   Wikipedia

  • ECONOMIC AFFAIRS — THE PRE MANDATE (LATE OTTOMAN) PERIOD Geography and Borders In September 1923 a new political entity was formally recognized by the international community. Palestine, or Ereẓ Israel as Jews have continued to refer to it for 2,000 years,… …   Encyclopedia of Judaism

Share the article and excerpts

Direct link
Do a right-click on the link above
and select “Copy Link”

We are using cookies for the best presentation of our site. Continuing to use this site, you agree with this.