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argued that a non-insider impaired class had not accepted the plan. This debate centered on whether the main secured lender, which had a common owner with the debtor, was an insider. The court explained that the common owner was an affiliate insider of the debtor, but the common owner did not own enough of the secured creditor to make it an affiliate of the common owner. Thus, the court found that the secured creditor was not an affiliate or insider of the debtor. As to feasibility, the court found the debtor's plan was feasible despite a balloon payment to the objecting creditor at the conclusion of the plan term. By the end of the plan term, the debtor would have paid a substantial portion of its debt to the objecting creditor and would have freed up its assets to secure refinancing. As to cramdown requirements, the objecting creditor claimed that that the plan unfairly discriminated by allowing the debtor the option to prepay unsecured creditors and for favoring the secured creditor over the objecting creditor, which was the debtor's largest unsecured creditor. The court explained that the prepay option was not discriminatory because it was an option, not a requirement. The court also rejected the second argument because a plan can discriminate between a secured creditor and an unsecured creditor. Lastly, the court found that the 5% interest rate met the Till prime-plus formula and was sufficient to provide the objecting creditor with its full present value.
xi. In re Hales, 493 B.R. 861 (Bankr. D. Utah 2013)
Issue: What date was appropriate for determining the value of commercial property that the debtors proposed to retain but strip down the liens secured by such property.
Holding: The bankruptcy court held that the date of confirmation or a date close to it was the appropriate date to value property for lien stripping. The debtors main asset increased in value from the petition date to the date of confirmation. The debtors sought to cram down a plan by stripping the lien on the property to that amount of its value. Because of the increase in value during the bankruptcy, the debtors attempted to use the value as of the petition date to value the collateral for the lien strip. The court relied on the language of Section 506 of the Bankruptcy Code in determining that the date for valuing the collateral "shall be determined in light of the purpose of the valuation and the proposed disposition or use of such property." Because the debtors intended to retain the property as an investment and the purpose of the valuation was for confirmation, the court found that Section 1129 of the Code, which contains several provisions referring to the value as of the plan's effective date, was consistent with valuing collateral as of the confirmation date or a date near the confirmation date.
xii. In re GAC Storage El Monte, LLC, 489 B.R. 747 (Bankr. N.D. Ill. 2013)
Issue: Whether the debtor limited liability company met the requirements for plan confirmation. Whether the secured creditor was entitled to stay relief.
Holding: The bankruptcy court denied confirmation on various grounds and awarded the objecting secured creditor stay relief. The debtor owned storage unit buildings. The secured
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