Single Asset Real Estate Cramdown: Analyzing Impaired Accepting Class and Per-Plan vs. Per-Debtor Under Sec. 1129

Navigating Plan Confirmation Challenges for Real Estate Debtors and Senior Mortgage Lenders

Recording of a 90-minute CLE webinar with Q&A


Conducted on Wednesday, December 21, 2016

Recorded event now available

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Program Materials

This CLE webinar will provide counsel with approaches for commercial real estate debtors and senior mortgage lenders to deal with plan cramdown involving single asset real estate (SARE) entities. Specifically, the program will look at the meaning of impaired accepting class and analyze the per-plan vs. per-debtor approaches under Sec. 1129.

Description

Approval of a cramdown plan by a single asset real estate entity requires that at least one class of “impaired” creditors vote to accept the plan. Practitioners representing clients in SARE bankruptcies must navigate the impaired creditor rules and keep abreast of the evolving case law developments impacting plan cramdown.

A recent Arizona district court’s interpretation of “impaired accepting class” jeopardizes senior lender protections in single-asset entity reorganization plans. Noting the split in authority between New York and Delaware Bankruptcy courts on whether Section 1129(a)(10) applies on a per plan or a per debtor basis, the Arizona court applied the per plan approach.

A recent Sixth Circuit case made it more difficult for SARE debtors to cramdown a plan on the secured lenders. While the court allowed the plan to “artificially impair” claims of unsecured creditors, it then found the plan was not proposed in good faith.

The Ninth Circuit ruled that an insider can sell its claim to a friendly third-party creditor who can then fulfill Section 1129(a)(10)’s requirement of an impaired consenting class so long as the third party does not have a close relationship with the debtor and the purchase of the claim was negotiated at arm’s length.

Listen as our authoritative panel of bankruptcy attorneys guides you through the morass of complexities facing debtors and senior mortgage lenders in plan cramdown involving SAREs. The panel will focus on the court interpretation of impaired accepting class and the per-plan vs. per-debtor approaches under Sec. 1129.

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Outline

  1. Overview of plan cramdown rules
  2. Impaired accepting class
  3. Per-plan vs. per-debtor approaches
  4. Perspectives for the secured mortgage lenders
  5. Perspectives for the debtor/borrower

Benefits

The panel will review these and other key issues:

  • What hurdles do the SARE rules impose for real estate debtors?
  • How do the SARE rules impact the viability of Chapter 11 as a restructuring strategy?
  • How does the application of the per-plan or per-debtor approach impact the secured lender’s ability to look only to their specific borrower for repayment of the loan?

Faculty

Eric J. Fromme
Eric J. Fromme

Partner
Jeffer Mangels Butler & Mitchell

Mr. Fromme advises domestic and international clients facing high-stakes litigation and challenges. He also assists...  |  Read More

Newman, Samuel
Samuel A. Newman

Partner
Gibson Dunn & Crutcher

Mr. Newman is a member of the firm’s Business Restructuring and Reorganization Group and the Corporate...  |  Read More

Other Formats
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Strafford will process CLE credit for one person on each recording. All formats include program handouts. To find out which recorded format will provide the best CLE option, select your state:

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