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date of assessment. § 1129(a)(9)(C). This priority treatment does not apply to secured tax claims, however, such as property taxes.76
Section 507(d) prevents this priority treatment from applying to one who asserts such a priority claim by subrogation, except for administrative and gap claims
The requirement that administrative claims be paid in full on confirmation has been called "administrative solvency," and an administratively insolvent debtor cannot confirm a plan.77
If any class of claims is impaired under the plan, at least one impaired class78 must accept the plan, not counting acceptances by insiders. § 1129(a)(10). "Insider" is defined in § 101(30) in several nonexclusive ways depending on the nature of the debtor.79 Because "insider" is defined according to the relationship to the debtor, this leaves open the question of whether a plan proponent's vote should be counted in determining acceptance where the proponent is not an insider of the debtor, as would occur with a creditor's plan. There is at least one case holding that plan proponents are not per se insiders.80
The accepting class requirement is the principal cause of classification issues, particularly in the single asset case. Consequently it is important to understand its historical background.
The Bankruptcy Act did not expressly require acceptance by an impaired class. Yet without statutory basis, many courts concluded cram down was not available when there was
retain their status in a subsequent case. In re Conston, Inc., 181 B.R. 769 (D. Del. 1995).
76 U.S. v. Victor, 121 F.3d 1383 (10th Cir. 1997).
77
Pan Am Corp. v. Delta Air Lines, Inc., 175 B.R. 438 (S.D.N.Y. 1994).
78
As originally drafted, the Code required only an accepting class, and was therefore ambiguous as to whether an unimpaired class that is deemed to accept the plan could satisfy the requirement; cases went both ways. Compare In re Marston Enterprises, Inc. 7 BCD 1403, 13 B.R. 514 (Bankr. E.D.N.Y. 1981); and In re Barrington Oaks General Partnership, 8 BCD 569, 5 CBC 2d 969 (Bankr. D. Utah 1981) with In re Mansnorth Corp., 18 B.R. 892, 10 BCD 553 (Bankr. N.D. Ga. 1983). However, the 1984 amendments made clear that the acceptance must be by an impaired class if any class is impaired.
If all classes are unimpaired, there need be no solicitation of votes. § 1126(f).
79
See, e.g., In re 7th Street & Beardsley Partnership, 181 B.R. 426 (Bankr. D. Az. 1994)(debtor's accountant not an insider because it does not fit the definitions in § 101(31), does not exert overt influence over the debtor nor is subject to overt influence by the debtor). But see In re Three Flints Hill Ltd. Ptshp., 213 B.R. 292 (D. Md. 1997).
80
In re Union Meeting Partners, 160 B.R. 757 (Bankr. E.D. Pa. 1993). In In re L&J Anaheim Assoc., 995 F.2d 940 (9th Cir. 1993), the Ninth Circuit permitted the proponent's vote to satisfy § 1129(a)(10)
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