In what is sure to be a controversial opinion, the Third Circuit Court of Appeals (No. 09-4349) has issued an Opinion holding that the lenders in the contentious Philadelphia Newspapers’ bankruptcy case pending in the United States Bankruptcy Court for the Eastern District of Pennsylvania, No. 09-11204, may not credit bid for the sale of substantially all of the assets of Philadelphia Newspapers during a proposed auction to be conducted under Section 1129(b)(2)(A).  The Opinion affirms the decision of the District of Pennsylvania, which overruled the decision of the Bankruptcy Court.  For a good summary of the case history, click here.  The Third Circuit’s opinion is well-reasoned (using statutory construction and analysis), and even though the opinion is 2-1, it is now the law of the land (at least in the Third Circuit) and its impact on the sale process in Chapter 11 cases will be known only over time.