In Re Figter Limited

118 F.3d 635 (1997)

Purchase the Printed Copy at bsmsphd.com

Nature of the Case

To access this section all you need to do is click here and register.

Facts

P filed Chapter 11. P owns Skyline Terrace, a 198-unit residential apartment complex located in Los Angeles. Teachers (D) is a creditor. D holds a $15,600,000 promissory note executed by P. The note is secured by a first deed of trust on Skyline Terrace and by $1,400,000 of cash on hand. D is P's only secured creditor and is the only member of Class 2 in a reorganization plan proposed by P. P was to pay D in full but at a disputed rate of interest. Under P's plan, D's claim is not impaired. Class 3 unsecured claims would get 80% of their face value. D opposed the plan and proposed its own, which provided for the transfer of Skyline Terrace and the cash collateral to D in satisfaction of its secured claim, as well as a payment of Class 3 unsecured claims at 90%. D then purchased twenty-one of the thirty-four unsecured claims in Class 3 at one hundred cents on the dollar, for a total purchase price of $14,588.62. D then filed notices of transfer of claims with the court. No objections were filed by the unsecured creditors. The district court upheld the bankruptcy court's determination regarding D's purchase of the unsecured claims. P's plan is unconfirmable because it is unable to meet the requirements of §1129(a)(10); there will not be an impaired, consenting class of claims. That will preclude a 'cram down' of D's secured claim under §1129(b). P appealed. P contends that D should be precluded from voting its purchased Class 3 claims because it did not buy them in good faith. Even if the claims were purchased in good faith, P asserts that D cannot vote them separately, but is limited to one total vote as a Class 3 creditor.