On April 23, 2012, the Supreme Court heard argument in the RadLAX Gateway Hotel, LLC v. Amalgamated Bank case. The Court has been asked to resolve the question of whether a debtor may confirm a plan of reorganization that prohibits a secured creditor from credit bidding the amount of its claim during an auction sale. A credit bid allows a secured lender to use the debt owed to it as "currency" to bid for the debtor's assets in which it has a security interest.

The debtor, RadLAX argued that the Supreme Court should reverse the decision of the Seventh Circuit Court of Appeals, which prohibited it from implementing a sale process that would have provided for the sale of substantially all of its assets, a Radisson Hotel at the Los Angeles International Airport and an adjacent parking structure, free and clear of liens without allowing the secured credit an opportunity to credit bid. The RadLAX chapter 11 plan proposed to conduct an auction of the assets and the distribution of the sale proceeds to its creditors. The plan specified that no secured creditor would be permitted to credit bid at auction, which is a significant departure from past bankruptcy practice. The secured creditor's administrative agent and trustee, Amalgamated Bank, objected to the proposed bid procedures on the grounds that the sale of its collateral, free of liens, required that the lender be permitted to credit bid the amount of its outstanding indebtedness. The bankruptcy court agreed with Amalgamated Bank and denied RadLax’s proposal with regard to not permitting credit bids. On a direct appeal, the Seventh Circuit affirmed the bankruptcy court's decision. RadLAX subsequently appealed the decision to the U.S. Supreme Court.