Now Updating
In re Edwin Earl Elliott

Summarizing by Bradley Pearce

In re Donald and Jane Nichols

Summarizing by Lars Fuller

Marlow Manor Downtown, LLC v. Wells Fargo Bank (In re Marlow Manor Downtown LLC)

Citation:
In re Marlow Manor Downtown, LLC, No. AK-14-1122-JuKiKu (9th Cir. B.A.P. Feb. 6, 2015).
Tag(s):
Ruling:
A chapter 11 debtor’s plan may not classify an under-secured creditor’s claim as entirely secured unless the creditor itself makes the section 1111(b)(2) election. (Not-for-publication memorandum.)
Procedural context:
The debtor, Marlow Manor Downtown, LLC, proposed a plan. Creditor AHFC moved for an order determining that the classification was improper. The bankruptcy court granted the motion. Marlow appealed to the BAP, which affirmed.
Facts:
AHFC held two loans to Marlow nominally secured by liens against Marlow’s real estate. One loan was partially secured, and the other was entirely unsecured. Marlow’s plan separately classified as secured claims the unsecured portion of the first loan and the entire second loan in two classes, separate from the general-unsecured claims. The plan sought to treat AHFC’s unsecured claims as though AHFC had made the section 1111(b)(2) election (which it had not); that treatment requires the creditor’s election. Under section 1124(2), those claims were impaired under the plan because the plan did not purport to cure all defaults. Under section 1122(a), separate classification of AHFC’s unsecured claims was improper because there were no characteristics distinguishing them from general-unsecured claims; the guarantor was not a source of recovery because he was insolvent. Marlow also failed to point to any legitimate business or economic reason for separate classification, and Marlow all but admitted that the purpose for separate classification was to prevent AHFC from voting against the plan.
Judge(s):
Meredith A. Jury, Ralph B. Kirscher, and Frank L. Kurtz, Bankruptcy Judges.

ABI Membership is required to access the full summary. Please Sign In using your ABI Member credentials. Not a Member yet? Join ABI now - it is absolutely worth it!

About us in numbers

3123 in the system

3003 Summarized

2 Being Processed