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than half in number of class to make the election not to bifurcate its undersecured claim under Section 506(a) of the Bankruptcy Code. Because of the unusual circumstances of this case--the secured class in question contained two creditors with liens of the same priority on the same collateral, which were nearly identical if not at least partially duplicative--the court held that if only one of the secured creditors in that class made a Section 1111(b) election, it did not meet the requirement that more than half of the members of the class make the election. The court rejected arguments by the creditor attempting to make a Section 1111(b) election that it, among others, controlled the fees relating to the secured collateral, and thus, it controlled the class. The court found that the other creditor's claims were not wholly duplicative because of its right to control certain "additional fees" not controlled by the electing creditor, which the court found to be a legitimate claim by the non-electing creditor. The court concluded that the creditor's 1111 (b) election was invalid and was to be treated as though no election had been made.
iii. In re Garrett, 494 B.R. 336 (Bankr. N.D. Ill. 2013)
Issue: Whether a creditor waived its right to elect to have its claims treated as fully secured under 11 U.S.C. § 1111(b) by entering into a stipulation with the debtor that the creditor's claim would be bifurcated based on the value of the property as determined by the bankruptcy court.
Holding: The bankruptcy court held that the creditor waived its right to a make a Section 1111 (b) election by entering into a stipulation with the debtor that its claim would be bifurcated. The debtor moved for the court to compel the creditor to vote for the plan based on a stipulation whereby the creditor agreed to its treatment. The court construed the motion as one to enforce a settlement agreement and disallow a Section 1111(b) election. The court explained that agreeing to treatment and voting on a plan were "two different decisions." The court enforced the agreement, disallowed the Section 1111(b) election, and barred the creditor from objecting to the plan on 11 U.S.C. § 1129(b) grounds.
iv. In re Castillo, 488 B.R. 441 (Bankr. C.D. Cal. 2013)
Issue: Whether an under-secured creditor that had made an 1111(b) election was entitled to attorney fees and post-petition interest?
Holding: The bankruptcy court held that the under-secured creditor that had made an 1111(b) election was entitled to both prepetition and post-petition attorney fees but not post-petition interest. The debtor objected to the secured creditor's amended proof of claim on the grounds that 11 U.S.C. § 1111(b) only expressly mentions 11 U.S.C. § 506(a), meaning that 11 U.S.C. § 506(b) remained effective and prohibited the secured creditor from claiming "charges that are only available to a creditor whose collateral has sufficient value to provide for payment of such charges." The court explained that 11 U.S.C. §502(b) did not disallow claims for attorney fees and that because such fees would be allowed under state law, the electing under-secured creditor was entitled to attorney fees. The court also reasoned that as long as the creditor's right to
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