(6th Cir. B.A.P. Jan. 28, 2016)

(6th Cir. Jan. 27, 2016)

The Sixth Circuit affirms the district court’s finding that the Chapter 11 plan was proposed in bad faith. The plan proposed to pay small claims in full but over a 60-day period. This class of claims was technically impaired due to the delayed payment and it voted to accept the plan. The principle secured lender appealed. The Court finds that the plan was not proposed in good faith, as required by 11 U.S.C. § 1129(a)(3), because it was designed to circumvent  § 1129(a)(10)’s requirement for an accepting impaired class of claims. Opinion below.

Background – As Things Currently Stand

The aim of EC Regulation on Insolvency Proceedings 2000 (the Regulation) is to improve the efficiency of insolvency proceedings with cross-border implications. It provides, within the EU, rules for determining:

The much awaited court decision on the status of Financial Support Directions (“FSDs”) and Contribution Notices (“CNs”) * issued by the Pensions Regulator against target companies after the commencement of English insolvency processes in respect of such targets was handed down by the court on Friday 10 December 2010. The reluctant decision of Mr Justice Briggs that FSDs and CNs in these circumstances were not provable debts but ranked as expenses of the insolvency process, taking precedence ahead of unsecured creditors, has caused dismay in the restructuring community.