Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

BankruptcyFeaturesLitigationThe Bankruptcy Strategist

Ninth Circuit Ruling Eases Plan Acceptance Requirement in Multi-Debtor Plans of Reorganization

By Adam H. Friedman, Jonathan T. Koevary and Lauren B. Irby
May 01, 2018

 In a case of first impression at the circuit level, the United States Court of Appeals for the Ninth Circuit held that section 1129(a)(10) of the Bankruptcy Code — which requires a favorable vote of at least one impaired class of creditors in order to confirm a Chapter 11 plan — applies on a “per-plan” basis, rather than a “per-debtor” basis. See, JPMCC 2007-C1 Grasslawn Lodging, LLC v. Transwest Resort Props. Inc., et al. (In re Transwest Resort Props. Inc.), No. 16-16221, 2018 WL 615431 (9th Cir. Jan. 25, 2018).

Bankruptcy Code section 1129(a) sets forth the legal requirements that must be met before a court may confirm a Chapter 11 plan of reorganization. Among them are the creditor acceptance requirements necessary for plan confirmation. A Chapter 11 plan must divide creditors into classes of similarly situated creditors — generally according to the priority level of their claims. 11 U.S.C. §1122. Impaired creditors vote on a Chapter 11 plan together with other members of their class. A class of creditors is deemed to accept when at least two thirds by number of creditors and over one half by dollar amount votes in favor of the plan. 11 U.S.C. §1126. Bankruptcy Code section 1129(a)(8) suggests that all creditor classes must vote to accept in order to confirm a Chapter 11 plan. However, if certain additional statutory requirements are met, a “cramdown” plan may be confirmed under section 1129(a)(10), provided that at least one class of impaired creditors has voted to accept the plan.

This premium content is locked for The Bankruptcy Strategist subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
The DOJ's Corporate Enforcement Policy: One Year Later Image

The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.

The DOJ's New Parameters for Evaluating Corporate Compliance Programs Image

The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.

Use of Deferred Prosecution Agreements In White Collar Investigations Image

This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.

Bankruptcy Sales: Finding a Diamond In the Rough Image

There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.

Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability Image

This article explores legal developments over the past year that may impact compliance officer personal liability.