In re: Midpoint Dev., L.L.C.
(10/31/06 - No. 05-6046) (10th Cir. Ct. Apps) Dismissal of a
debtor's Chapter 11 bankruptcy petition is affirmed where
the district court correctly concluded that the debtor had
ceased to legally exist prior to its bankruptcy filing, and
that thus, its bankruptcy filing was a nullity and subject
to dismissal.
http://laws.lp.findlaw.com/10th/056046.html
IN RE: DEBBIE
REYNOLDS HOTEL & CASINO, INC. (07/06/01 - No. 99-17240) (9th
Cir. Ct App) Bankruptcy Code Section 506(c), which limits
standing to challenge a settlement agreement to the trustee or
Chapter 11 debtors-in-possession, applies retroactively.
http://caselaw.lp.findlaw.com/data2/circs/9th/9917240p.pdf
IN RE: CIRCLE
K CORP. (12/05/01 - No. 00-15361) (9th Cir. Ct App)
A professional's application for services in a Chapter 11
proceeding must unambiguously seek pre-approval under 11 USC
328 or it will be subject to reasonableness review under 11
USC 330, although a bankruptcy court's failure to specify will
not preclude review under section 328.
http://caselaw.lp.findlaw.com/data2/circs/9th/0015361p.pdf
ATALANTA
CORP. v. ALLEN (08/16/02 - No. 01-15301/04) Bankruptcy court
did not err in confirming a reorganization plan that did not
incorporate either the terms of a stipulation between the
parties, or the court's order approving it, where neither
document indicated it would be binding in a subsequent
reorganization plan.
http://caselaw.lp.findlaw.com/data2/circs/9th/0115301p.pdf
TEMECULA v.
LPM CORP., No. 01-56570 (9th Cir. August 22, 2002) Chapter 11
rent claims, having administrative priority under 11 U.S.C.
section 365(d)(3), do not have super-priority over other
administrative claims when a bankruptcy is converted to
Chapter 7.
http://caselaw.lp.findlaw.com/data2/circs/9th/0156570p.pdf
CRAM DOWNS IN CHAPTER 11: 1129
AND 1111(b)(2)
Imagine that the debt is $200,000 and that it is secured by
a first lien on real property worth $150,000. If the
undersecured creditor does not make the section 1111(b)(2)
election, you can strip the lien down to the $150,000 value
of the real property and pay that $150,000 off with interest
over whatever period of time the court will allow (probably
at least fifteen years, I'd think, but it may depend on the
condition of the collateral and on the expected financial
stability of the reorganized debtor). Assuming you use
1129(b)(2)(A)(i), the plan will have to let
the creditor retain its lien on the property for the amount
of the allowed secured claim ($150,000), will have to
provide for cash payments over time that have a present
value as of the effective date of the plan equal to the
value of the lien ($150,000) (which means you will have to
provide for payment of the $150,000 with interest over a
period of time), and will have to provide for cash payments
(including both principal and interest) that total at least
$150,000 (which will obviously be satisfied because there is
no way, if you don't have a time machine, to make payments
with a present value of $150,000 without paying at least
150,000 total dollars of principal and interest).
The language of (b)(2)(A)(i) is complex due to the
possibility that the undersecured creditor will make the
section 1111(b)(2) election.
If the unsecured creditor makes the section 1111(b)(2)
election then you have to let the creditor keep a lien for
the entire amount of its $200,000 debt (because the whole
$200,000 will be treated as an allowed secured claim), and
you have to provide for the total of all the payments to be
at least $200,000 (because the allowed secured claim will be
$200,000), but the present value of the payments need not be
more than $150,000 (because that continues to be the value
of the lien -- a lien cannot be worth more than the value of
the collateral, and thus the making of the section
1111(b)(2) election does not increase the value of the
lien). Interest payments made under the modified mortgage
are permitted to count toward the $200,000 in total cash
payments. Thus, as long as the court will let you make
payments over a long enough time period, you can meet the
$200,000 total payment requirement without having to pay
more than $150,000 in present value. That means the making
of the election usually does not require you to provide
larger payments in the plan. But if the reorganized debtor
then wants to refinance or to sell the property free and
clear in the next several years, the secured creditor can
block the sale or refinancing unless it is paid the
remaining amount that is not yet paid of the $200,000. That
gives the secured creditor leverage to extract a payment in
exchange for releasing its lien
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