In the context of bankruptcy, the net value a secured creditor would realize from a hypothetical, commercially reasonable foreclosure sale of the creditor's collateral under applicable non-bankruptcy law.

The ABI Commission to Study the Reform of Chapter 11 determined that foreclosure value is the appropriate standard to determine whether a secured creditor's interest in property of the estate is adequately protected because it captures the value that state law foreclosure efforts would produce if the automatic stay were lifted or the bankruptcy case had not been filed.

For more information on foreclosure value, see Practice Note, ABI Commission Report on Chapter 11 Reform: Selected Proposals Affecting Secured Creditors and Distressed Investors.