In Re Orfa Corporation Of Philadelphia

129 B.R. 404 (1991)

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Nature of the Case

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Facts

Orfa et al. (D), debtors were licensed to recycle solid waste. They each filed Chapter 11. Although Ds have never been formally consolidated, the Plan, for the most part, treats the creditors of each as one body, i.e., as if their cases were consolidated. Nevertheless, in a paragraph addressing 'revesting of assets,' the Plan provides that Ds will operate as separate entities post-petition. SPNB, BEC, and Licensors (Ps) challenged the plan in that it fails to meet the 'feasibility' requirement of 11 U.S.C. § 1129(a)(11), that confirmation is 'not likely to be followed by liquidation, or the need for future financial reorganization, . . .' All secured and unsecured claims of SPNB were placed into a single class. SPNB was to receive full payment on the effective date if the Proponents obtain financing sought from Chase Manhattan Bank, N.A. ('Chase'). If the Chase loan is not consummated, as has not occurred to date, the Proponents, who are investment brokers and counselors by profession, will undertake a private placement of preferred stock of Ds. BEC's claim, secured by ORFADEL's stock, was placed into a class (Class H), which included unsecured noteholders and all other unsecured claims of Ds. That class was to get twenty (20%) percent of such claims with the remaining eighty (80%) percent to be paid in quarterly payments extending over five years. Licensors' licenses were to be assumed, and the Licensors paid their claims in full on the effective date.