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§ 1126

In re LichtinWade LLC

Ruling
Creditor's vote against debtor's plan could not be disallowed absent evidence of alleged bad faith.
Procedural posture

Debtor LLC filed a petition under chapter 11 of the Bankruptcy Code and operated its business renting commercial real estate as a debtor-in-possession. A secured creditor filed an objection to a chapter 11 bankruptcy plan the debtor proposed, and the debtor filed a motion which asked the court to disallow all votes the creditor cast against the debtor's plan, pursuant to 11 U.S.C.S. § 1126(e). The court held a hearing on the debtor's motion.

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Commercial opinion summary, case decided on December 17, 2012 , LexisNexis #0113-029

In re Charles St. African Methodist Episcopal Church of Boston

Ruling
Motion to designate votes by secured creditor against plan and disregard objections denied.
Procedural posture

A chapter 11 debtor filed a motion under 11 U.S.C.S. § 1126(e) to designate the votes cast by a secured creditor against the debtor's plan of reorganization and, by virtue of the designation, to disregard the objections to confirmation of the plan.

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Commercial opinion summary, case decided on September 11, 2012 , LexisNexis #1012-061

In re BataaKierland LLC

Ruling
Motion to designate impaired creditor's acceptance of plan for bad faith denied.
Procedural posture

Movant secured creditor, a lender, sought to "designate," that is, to disqualify another secured creditor's acceptance of the plan of reorganization, pursuant to 11 U.S.C.S. § 1126(e), alleging that the acceptance was not made in good faith. Debtor owned a single real estate asset. The creditor's apparent motive in approving the plan under 11 U.S.C.S. § 1129(a)(10), was to see the debtor succeed in its reorganization.

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Commercial opinion summary, case decided on September 04, 2012 , LexisNexis #1012-095

In re DBSD N. Am. Inc.

Ruling
Votes of creditor that purchased debtor's first lien debt in order to acquire primary asset designated and disqualified.
Procedural posture

The debtors, a development-stage enterprise formed to develop an integrated mobile satellite and terrestrial services network, moved, pursuant to 11 U.S.C.S. § 1126(e), to designate and disqualify the votes of a competing creditor, which had just purchased and was the sole holder of debt in the first lien debt class. The creditor's votes rejected the debtors' reorganization plan before the court for confirmation.

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Commercial opinion summary, case decided on December 21, 2009 , LexisNexis #0210-064

In re G & C Foundry Co.

Ruling
Court refused to strike union's ballot in favor of debtor's plan even though preventing acceptance of competing plan.
Procedural posture

In a chapter 11 case, two competing liquidation plans were presented, one by the debtor and one by the Official Committee of Unsecured Creditors (Creditors' Committee). The Creditors' Committee sought an order pursuant to 11 U.S.C.S. § 1126(c) striking the plan ballot of a union that accepted the debtor's plan.

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Commercial opinion summary, case decided on October 09, 2008 , LexisNexis #1208-024

In re Bennett

Ruling
Plan confirmed over objection of judgment creditor against which debtor had filed avoidance proceeding.
Procedural posture

Debtor filed a voluntary petition under chapter 11 of the Bankruptcy Code, and an amended reorganization plan. A creditor filed an objection to the debtor's plan.

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Consumer opinion summary, case decided on April 23, 2008 , LexisNexis #0708-015

In re Quigley

Ruling
Personal injury claimants' inability to satisfy state's proof requirements did not affect right to vote on chapter 11 plan.
Procedural posture

A bankruptcy debtor submitted a proposed ballot to solicit votes on the debtor's reorganization plan from individuals who held asbestos personal injury claims. An ad hoc committee of asbestos victims objected to the ballot on the ground that it did not seek to identify individuals whose causes of action were unenforceable under state tort reform laws.

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Commercial opinion summary, case decided on February 26, 2008 , LexisNexis #0308-103

In re Eastport Golf Club Inc.

Ruling
Creditor's assignee could not vote on plan confirmation where creditor had not filed a proof of claim.
Procedural posture

Debtor operated a golf course. Debtor filed a petition under chapter 11. Debtor filed its proposed plan of reorganization. The bankruptcy court entered an order setting a deadline to file ballots accepting or rejecting the plan. Creditor did not file a proof of claim prior to the initial confirmation hearing. The matter was before the bankruptcy court for a confirmation hearing. Debtor orally moved to allow the ballot of an assignee of creditor.

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opinion summary, case decided on March 28, 2007 , LexisNexis #0507-012

In re Adelphia Communs. Corp.

Ruling
Court refused to designate creditors'votes for confirmation on grounds of bad faith absent highly egregious conduct.
Procedural posture

The bondholders filed a motion to designate, for bad faith, the votes in the class of senior notes of the three targeted creditors that voted to support the chapter 11 plan for confirmation. The targeted creditors and creditors committee opposed the motion on the ground that there was no basis for disqualifying the votes.

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opinion summary, case decided on December 11, 2006 , LexisNexis #0107-027

In re Quigley Co.

Ruling
Reduction of asbestos claims to 90% resulted in dilution of claimants'votes and prevented consensual plan confirmation.
Procedural posture

The debtor and its non-debtor parent company sought to confirm the debtor's third amended plan of reorganization under chapter 11 to deal with their asbestos-related liability. The holders of unfiled and unliquidated asbestos-related personal injury claims (claimants) voted to accept or reject the plan.

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opinion summary, case decided on August 09, 2006 , LexisNexis #0906-033