On February 16th, the Third Circuit addressed an issue of first impression and held that the discounted cash flow method was the proper measure of damages under Bankruptcy Code Section 562 when a market price cannot be determined. The parties had entered into a $1.2 billion repurchase agreement for a portfolio of home mortgages. On the day the debtor defaulted, the distressed state of the credit markets made it commercially unreasonable for the purchaser to sell the portfolio and the market price would not reflect the asset's worth. In part to avoid the moral hazard of a repo participant holding an asset with little or no risk, an alternative measure was needed and the Court found that the discounted cash flow method was a proper measure. In re American Home Mortgage Holdings, Inc.