## In the



# U n ited S ta tes Co urt o f Ap p ea ls

F o rth eS e v e n th C ir cu it

N os. 10

- 3597& 10

- 3598 I N THE M A T T E ROF : R IVER R OAD H OTEL P ARTN ERS, LLC , R IVER R OAD E X PAN S I ON P ARTN ERS, LLC , R AD L AX G ATE W AY H OTEL, LLC an d R AD L AX G ATE W AY D EC K, LLC , D eb tors -App el lants , v. A MAL GAMA T ED B ANK, A pp ellee.

Appeals from the United States Ban kruptcy Court fo r the N o rthernDi stricto f Illino is, Eas tern Div isi on. No s. 09-B-30029, 09-B -30047— Bruce W. Bla ck, Ba nkru ptcy Judge

.
A RG UE D A PRI L 7, 2011

— D ECI DE D J UNE 28, 2011

Befo re C UDAH Y, M A NI ON, a nd H A MI L T ON, C ircu it Judges. C UDAH Y, Circ uit Ju dg e. Debto rs - A pp el l ants appeal fro m a ba nkruptcy cour t o rderdenyin g the bi d procedure s mot i o ns tha tthe y fi l e d i n c o nn e c t i o n wi th the the i rCh a pter1 1 r e o r g a ni zati on pl ans. They a rgue thatthe bankr up tcy2 N os. 10

- 3597& 10

- 3598

This opini on has been ci rcul ated am ong all j ud ges ofthi s court 1 i n re gul ar ac t i ve s er vi c e purs uan tt o Ci rc ui tRul e 40 ( e)

. No j udge as ke d t o hea r thi s cas e enb anc . J udge Fl aum too k no p ar ti n the consi derati on or decis ion ofthi s cas e. co ur t er r ed i n fi ndi ngtha t th ei rplan c o ul d no t be c o nfi rm ed ove r the obj ecti ons of i ts secur ed cre dit or s be cause i t di d not qual i fy for“f ai r an d equi tabl e” sta tus under 11 U. S

. C

. § 1 1 2 9 ( b ) ( 2 ) ( A)

. We a ffi r m. 1

I . F a c t ua l B a c kg r o und A . T h e R ive r R oa d D eb tors I n 200 7 a nd 2008 , Riv er Road H ote lPar tner s, LLC , Ri ver Road Exp ansio n Partners , LLC , and re l ate d enti ti es ( “the R iverRoad Debto rs ”) bui l t the Inter Conti nental C h ica go O ’H ar e H ot el a n d affiliat ed e v e n t sp ac e. In or der t o const ruct the ho teland eve nt space , thes e e nti ti es ob ta in ed co n st ru c tio n loan s t ot allin g a p p ro x im at ely $1 55, 500, 000 fro m the Longvi ew U l tr a Const ructi on Loan I nvest m ent Fund a nd the Longvi ew U l tr a IConstr uction L oan Inv estm en t Fun d ( “th e River R oad Le nd ers”). Th e l o a n do c ume nt s de s i g na t e d Am a l g a mat e d Ba nk as the a dm i ni str ati ve age nt and tr ustee o fthe R i verRoad Lend er s. T h e In te rC on tin en ta l C h ica go O ’H ar e H ot el a n d affiliat ed f ac il i ti es o pen ed i n S ept embe r2 00 8. S ev er almonths l ate r, the Riv erRoad Debto rs re quested that the Ri verRoad L en d ers su p p ly th em w ith severa l m il li on d oll arsN os. 10

- 3597& 10

- 3598 3

The R iver R oad Lend ers hes it ancy to e xt end the R iv er Road 2 D ebtors add it ional cr edi t i s und ers tandab le , given thatthe River Roa d De bt or s h a d a l r e a dy be e n pr ov i de d wi th a ddi t i on a l fun ds on ce an d d efau lted un d er o ne of the existing loan s b y failing to m a k e r eq u ir ed in te re st p a y m en ts. i n a ddi ti o na lfundi ngs o tha t th eyc ou l d fi ni shb ui l di ng th e ho te l ’ s r es ta ur an t an d pay th ei r g en er al co nt r ac to r s an d supp l i er s. The Ri verRoad Lenders enter ed i nto nego ti atio n s w ith th e R ive r R oa d D eb to r s c o n c er n in g t h e c on d it i o ns u nd e rwh i c h a ddi t i o na lfun di ng wo ul d b e p r o v i de d, bu t the p a rties could not agree on m ut ua ll y satisfactory ter m s. 2 On A ugust 17, 20 09, ea ch ofthe Riv erRoad Debto rs fi l ed vol untarypeti ti ons f orr el i efunder Chapter 11 of11 U .S.C . §§ 1 01 , e t seq
. ( the Bankr up tcy Code, her ei nafter “the Code”) i n the U ni ted S tat es Bankrup tc y Court f or the Nor th ern Di st r i cto fI l l i no i s, Ea st ern Di vi si o n. At the ti m e the pet iti on was fi l ed, the Riv erRoad Debto rs o w ed at l eas t $ 140, 000, 000 on the l oans, with o ver$1 , 000, 000 inint er es t a c c ru in g pe r m on th

. Inad d itio n, ap p ro x im at ely $9, 500, 000 i n m echani cs’ l i ens hav e be en as ser ted ag ai nst th e In te rC on tin en ta l C h ica go O ’H ar e H ot el an d its a f f iliate d event spaces.

B . T h e R ad L A X D eb tors I n 2 00 7, Ra dLA X Ga te way H otel, LLC, pur ch as ed th e proper ty now kno w n as the Radi sso n H ote latLos A ngel es4 N os. 10

- 3597& 10

- 3598

W hil e the Rad LA X Lend ers cl aim thatthe Rad LA X D ebtors 3 ex hau s t ed a l l ofthe m one y a vai l abl e underthe i r l oan, the RadLA X D ebt or s cl ai m thatthe y on l y c am e up s hor tbe c aus e the R adL A X Lend ers i m prop erl y d enie d theircons tr ucti on d raw re que s t s . W hi c h a c c ounti s c or re ct i s i nc ons equen t i al f or the p u rp o se s o f th is a p p ea l. I nter nati onalA i rpor t. In or der t o pu rchas e the hot el, pay for r enova ti ons and buil d a park i ng st ructur e o n an adj acent parce lo fr eales tat e ( w hi ch w as to be o w ned by a r el at ed e n t i t y, R a d L AX G a t e wa y D e c k, L L C ) , R a d L AX Ga t e wa y Ho t e l, L L C , a n d i t s a ff i l i at e s ( “ th e R a d L AX D eb to rs ” ) ob ta in ed a c on st ru c tio n loan to ta lin g a p p ro x im ate l y $ 142, 000, 000 fro m theLo ngvi ew U l tr a Const ructi on Lo anInv es tmentF und ( “the Ra dLA X L en der s” )

. The l o ando cument s des i g na te d Am al g amat ed Ban ka s th e adm i ni str ati ve age nt and tr ustee o fthe RadL A X Lend er s. Dur i ngthe c o ur se o fb ui l di ngthe pa r k i ngs tructure the RadL A X Debtor s i ncurr ed seve ra l m i l l i on dol l ar s o f u n a n t i c i p a t e d c o s t s . Ar o u n d Ma r c h 2 0 0 9 , th e R a d L AX Deb to r s r ano uto ffunds a nd ha d t o ha l t co ns truct i o n. 3 The Ra dLA X Le nde r s en te red into ne g o ti at i o ns wi ththe RadL A X Debtor s co ncer ni ng the con d itio ns under which add i ti onalfund i ng would be provi ded , but the par ti es coul d not a gr ee on m utual l y s ati sf acto ryte rm s. O n A ug us t 17, 2009 , each of th e Ra d L A X De btors fi l ed voluntarypeti ti ons f orr elie funder Chapter 11 of the C od e in the U n it e d Sta tes B an krup tcy C ou rt f o rthe Nor th ern Di st r i cto fI l l i no i s, Ea st ern Di vi si o n.N os. 10

- 3597& 10

- 3598 5 A t the tim e the pet iti on w a s fil ed , the R ad L A X De btors owed atlea st $120 , 000, 000 on the l oans, with o ver $1 , 00 0, 00 0 in i nt er es t ac cr ui ngpe rmonth. In a ddi ti o n, ove r $15, 000, 000 i n m echani cs’ l i ens hav e be en as ser ted aga i nst the RadL A X proper ti es.

C . P roc ee d in gs Be fore th e B an k ru p tc y C ou rt O n A ug us t 2 0, 2009 , th e b an krup tcy cou rt en tered orders dir ecting the j oi nt adm i ni str ati on o fthe Riv erRoad Debtors’ bankru p tcy cases un d er C ase N o. 09-3002 9. T he cou rt als o en ter ed or ders dir ecting the j oi nt adm i ni str ati on o f the RadLA X Debtor s’ bank ruptcy case s under Case N o. 09

- 30 04 7. E ac h se t o f D eb to r s co n tin u es to op er at e t h eir bus i ne ss es a s d ebt o r s- i n- po ss es si o n pur su an t to s ec ti o ns 1107 ( a) and 110 8 o fthe Code. O n Jun e 4, 201 0 , t h e R iver Road and Rad L A X De btors ( co l l e c t i v e ly, “ theDeb t o rs ”) subm i tte d thei r re or gani zati on pla ns to the bankr up tcy cour t forco nfi rm ati on. Both pla ns so ught t o sel lsubst anti al l y a l lo fthe Debtor s’ as set s, w i th the pro ceeds to be di str ibuted am ong the Debt or s’ cre d ito rs i n acco rdance w i th the Code’ s pri or i ty rul es. T he De btors also f ile d m otions req ue sting th e cou rt’s appr o va lo fthe i rpr o po se d pr o ce dur es f o rc o nd ucting the a sse t s al es. B oth set s o fpro posal s s ought to aucti on offthe Debtor s’ as set s t o the hi ghest bi dd er, w i th the i ni ti al bi d i n each aucti on be i ng suppli ed by a s tal ki ng hor se bi dd erthathad bee n l i ned up i n the post- peti ti on, pre - pla n peri od. In one oftheir bi d procedure s m oti ons, the Riv er Ro ad Deb to r s cl ai m ed th atthe yha d pr o cur ed a st al k i ng6 N os. 10

- 3597& 10

- 3598 hor se offero f$4 2, 000, 000 f orthei r ass ets
. O n J une 22, 20 10, the RadLA X Debtor s fi l ed copie s of a pro posed ass et pu rchas e agr eem ent that o ffer ed $47, 500, 000 f or thei r ass ets
. On J ul y 8 , 2 01 0, Am al g amat ed B ank, o n b eh al fo fthe Ri ve r Ro ad an d Ra dLA X Len der s ( co l l ec ti ve l y, “ th e Lend er s”) , fi l ed o bj ecti ons to the Debt or s’ pro posed b id p ro c ed u re s. B ec au se t h e D eb to rs ’ p lan s w ou ld im p air the Lenders’ in te re sts and the Lend er s had notacc epted t h e p lan s, th ey co u ld n otbe co n firm ed u n les s t h ey qu alifi e d f o ro n e o ft h e e x c e p t i o n s l i s t e d i n S e c t i o n 1 1 2 9 ( b ) ( 2 ) ( A) of th e C od e. See 11 U
. S. C. § 1 129 (a)(8) , (b)

. A m al gam ate d ar gued that the Debt or s’ pl ans co uld notsa ti sfy S ecti on 1129 ( b) ( 2) ( A ) ’ s r equ i re m ents because theyso ught t o se l l en cumbe r ed as se ts fr ee an d cl ea r o f l i en s w itho ut al l owing th e L enders to bi d thei r cre ditatthe ass et aucti ons, i n vi ol ati on of11 U

. S. C. § 1 129(b) ( 2) ( A ) ( i i ) ’ s r equi re m ent tha t secur ed l enders be g i ven cr edi t-bi dd i ng r i ghts. T he D ebtors fil ed om nibu s rep li es to A m algam ated ’s obj ecti ons, ar gui ng tha t, wh ile thei r pla ns di d not com ply w i th S ecti on 1 129(b) ( 2) ( A ) ( i i ) ’ s r equi re m ents, they w er e s ti l lco nfi rm abl e be cau se t hey s ati sfi ed Se cti on 1129 ( b) ( 2) ( A ) ( i i i ) ’ s r equi re m ents. On Jul y 2 2, 20 10, the bankr up tcy cour t o ra l l y rule d that the Debt or s’ pl ans co uld notbe confirm ed u nd erS ecti on 1129 ( b)(2)( A ) ( i i i )

. On October5, 20 10, the cour t e nter ed o r der s den y i ngthe De bt o rs ’ b i d pr o ce dur e m o ti o ns . The Debtor s fi l ed noti ces of appeal and m oti ons re questi ng tha t th e b a n kr u p tc y c ou rtce rt ify th eir ap p ea ls d ire c tly to th isN os. 10

- 3597& 10

- 3598 7

cour t pursuant to 11 U
. S. C. § 158( d)( 2) ( A )

. On N ove m ber 4, 20 10, the court en ter ed cer ti fi cati ons f ordi re ct a pp eal t o th i s c o u r t f o rb o th c a s e s . O n No v e mb e r3 0 , 2 0 1 0 , we enter ed an o rderautho ri zi ng an d c onso l i dati ng the Ri ver Road and RadL A X app eal s.

I I . D i scussi on This appeal p re sents two i ssues f orthi s co urt to deci de. Fi rs t, we m ust dete rm i ne wh etherev ents that occur re d su bs eque ntt o the fi l i ngo fthe a ppea lhav e m o o te d the parti es’ di spute. S eco nd , i fw e find that the appeali s no t m oot, w e m ust turn to the m er i ts ofthe Debtor s’ appeal and deci de w hether the b ankr up tcy cour t’ s inter preta ti on of11 U
. S. C. § 1 129(b) ( 2) ( A ) was cor re ct.

A. Th e I s s ue Ra i s e d by t he Deb t o r s ’ Appe a l I s Not M oot T h e L en d er s c laim th at it w ou ld b e in ap p ro p ria te for th is cour t to re vi ew the bankr uptcy cour t’ s deni alo fthe Debtor s’ bi d procedure m oti ons because the Debtor s’ pro posed pla ns ar e no l onge r pend i ng be f or e the bank ruptcy cour t. The Le nde r s co nt en d tha t th e r eo r g an i za ti o n pl an s th atthe cour t o ri gi nal l y c onsi dered ar e no l onge r vi abl e due to th e pas singo fs ev er ale xpi r at i o n da te s co nt aine d i n the ass et pu rchas e a gr ee m en ts that the Debt or s fi l ed. They alternat ively argu e tha t statem en ts from the D ebtors i nd i c a t e tha tthe Deb t o r s h a v e ab a nd o ne d the i ro r i g i nal re or gani zati on pl ans.8 N os. 10

- 3597& 10

- 3598 W e rej ec t t h e L en d er s’ m o o t n e s s a rg u m en t. W h ile “it i s w el l

- set tl ed that a fe deralcourt has no author i ty to gi ve op in ion s u p o n m oo t q u es tio n s o r ab st ra c t p ro p os itio n s,” Porc o v. Trs . of

Ind. U ni v. , 453 F .3 d 3 90, 394 ( 7th Cir. 20 06) , a n i ss ue wi l lno t be c o ns i der ed m o o t unl es s th e p ar tie s lac k a “le ga lly c og n iza b le in te re st in t h e o u tc om e.” Ols on v . Brown , 59 4 F

. 3d 577, 580 ( 7th Ci r. 20 10)

. I t doe s no t appear that the Debto rs ’ r eor gani zati on pl ans s ufferfro m ei thero f t h e defects

— the pass i ng o fexpi ra ti on date s o r ab an do nm en t

— i denti fi ed by the Lend er s. On Febr uary15 , 2011 , the R ad L A X D e btors fil ed an am en d ed asset p urc h as e agr ee m en t w ith th e ba n kr u p tc y cou rt th a t la rg ely re sem bl ed the agr eem ent that w as subm i tte d i n connect i on w i th the o ri gina l reo rg ani zati on pl ans. On M ar ch 2, 20 11, th e R i v e rR o a d D e b t o r s fi l e d a s i mi l a ra g r e e me n t
. No ne ofthe confi rm ati on d eadl i nes c ontained i n the am ended agr eem ents have expir ed. Further, the Debtor s’ st ate m ents bef or e thi s co urt and the f act that they have fi l ed am ended agreem en ts p rovide c onv incing evid en ce th at th e D ebtors have not abandoned thei r ass et sal e pl ans. Even i fw e were to fi nd thatthe Debtor s’ o ri gi nalr eor gani zati on pl ans were base d on as set purchase ag re em ents th at ha d e xpi r ed, the Le nde r s ha ve f ai l ed to s ho w w hy thi s a pp ealwould not fi t square l y withi n the excepti on to moo tn es s th atwe ha ve r ec o g ni ze d f o rc as es th at, due to tim in g iss u es , w ou ld oth e r w i s e e va d e re vie w . See, e . g. , Fed. E le cti on C om m ’n v. Wis
. R ight to Life, Inc. , 551 U

. S. 44 9, 46 2 (2 00 7); Kris l ov v . Re dnou r, 22 6 F

. 3d 851, 85 8 (7t h C ir. 20 00 ). A c ou rtc an d isr eg ar d m oo tn es s a n d ret ain j u ris d ict ion ov er an ap p e a l w h en th e c h alle n ge d ac tio n isN os. 10

- 3597& 10

- 3598 9 ( 1) to o shor t in durati on t o be fully l i ti gat ed pri orto cess ati on or expir ati on and ( 2) ther e i s a r eas onabl e e xpectat i on that t h e sa m e a pp eal i ng par ty w i l lbe subj ect to th e sam e ac tio n ag ain
. Fed. E le cti on C om m ’n v. Wis
. Right to Life, Inc. , 55 1 U.S

. at46 2. This ap p ea lsa ti sfi es both ofthes e r equi re m ents. Fi rs t, es se nt i all y a l lb an k r upt cypl an s th ats ee kt o l i qui dat e th e debtor ’ s a sse ts w i l lbe base d on as setpurchase ag re em ents that conta i n sal es provi si ons w i th co nfi rm ati on deadl i nes. T he se d ead line s are, by econ om ic n e cess ity, qu ite short i n durati on. H ence, i t wil lr ar el y, if ev er, be the c ase that an appel l ate co urt w ou l d have the o pp or tuni ty to re vi ew a b a nk r up t c y c o ur t ’ s c o nfi r mat i o n de c i s i o n pr i or to the expir ati on of such deadli nes. S eco nd , i t i s r eas onabl e t o expect that, i f thi s appeal w er e dism i sse d form oo tness , th e Deb to r s woul d si m pl y r e- fi l e th ei rr eo r g an i za ti o n pl an s w i th new asse t purchas e a gr eem ents and the ba nkruptcy cour t would deny c onfi rm atio n on the sa m e g ro und s, gi vi ng the Debto rs gr ounds f orbr i ngi ng t h e sa m e a pp eal bef or e thi s co urt.

B . 11 U . S.C. § 11 29( b)( 2) ( A ) D oes N ot A uthor i ze De b t o r s T o Us e S u b s e c t i o n ( i i i ) T o C o n f i r m a Re o r g a n i z a t i o n P l a n t h a tS e e k s To S e l l E n c u mbe r e d As s e t s F r e e a nd Cl e a ro fL i e ns Wi t ho ut P rovidin g S ecu red C red it ors t h e R ight T o Cred it Bid T he De btors con ten d s tha t the b ank rupt cyc o ur t m i sinterp re te d Sec tio n 11 29 (b )( 2 ) ( A ) o f th e C od e w h en it h eld10 N os. 10

- 3597& 10

- 3598 that thei r pla ns co uld n ot be confi rm ed beca use they did not“com plyw i th the speci fi c r equi re m ents ofS ecti on 11 29 (b )(2) (A ) ( i i ).” T h ey arg u e t h at th eir p lan s s h ou ld ha ve b ee n co nfi r m ed be ca us e th eys at i sfi ed th e co ndi ti o ns setf or th i n Se cti on 1 129(b) ( 2) ( A ) ( i i i )

. Thus, t h is a pp eal prese nts a singl e, r elati vel y s tr ai ghtf or w ar d questi on concer ni ng the pro per i nter p re ta tio n ofS ecti on 1129 ( b) ( 2) ( A ) and i ts subsect i ons. The bankr up tcy cour t hel d that, w hen a debtor ’ s r eor gan iza tio n p lan h as n otbe en ap p ro ve d by its se c u re d cr ed ito r s an d pr o po se s th e sa l e o fe nc um be r ed as se ts fr ee a nd cl earo fl i ens, S ecti on 1 129(b) ( 2) ( A ) p ro vi des the excl usi ve m eans by w hi ch i t ca n be confi rm ed . T h e courtdi d not attem p t t o provi de i ts own i n-depth j usti fi cati on f ori ts const rualo fS ecti on 1 129(b) ( 2) ( A ) , but sta ted thati ts h old in g w as b as ed u p on th e s ta tu to ry an aly sis se t fo rt h in J udg e Am br o ’ s di ss en t i n In re P hil a delp hia New spa pers , 59 9 F. 3d 298 ( 3d Cir

. 20 10 ). B ecause we re vi ew a bankr up tcy cour t’ s inter preta ti on o fthe Code’s provi si ons und erthe de novo st an dar d, we m us t co nduc t o uro wn, i nde pen den t an a l y s i s o f Sec tio n 11 29 (b )(2) (A )’s m ea n in g. F r eyv . EPA , 403 F.3d 828, 833 (7th Cir. 2005).
( 1 ) Ov e rv i e w o fSe c t i o n 1 1 2 9 ( b) ( 2 ) ( A) a nd Re l e v a nt P reced en ts B efore atte m p ting to d ecip he r Section 1129 (b)( 2)(A )’ s p ro p er m ea n in g, a b rie f r ev iew of th e s ta tu te an d th e w ay it has be en co nstr ued by the co u rt s is m er i ted. S ecti on 1 129 o f the Co de s e t s f o r th the c r i t e r i a tha t a de b t o r ’ s Chapter 11 re or gani zati on pl an m ust s atisfy t o be c onfi rm ed byN os. 10

- 3597& 10

- 3598 11 a ba nkruptcy cour t. W hi l e the Code gener al l y r equi re s that re or gani zati on pl ans be acc epted by each cl ass ofcl ai m ants ( or, al ternati vel y, lea ve the cl ai m s ofnon- ass enti ng cl ass es u n im p air ed ), see 11 U
. S. C. § 1 129(a) ( 8) , S ubsect i on (b) of Sec tio n 11 29 ex c ep ts ce rt ain p lan s fro m th is re q u ire m ent. Pl ans that ar e c onfi rm ed und erS ecti on 1 129(b) ar e o ften re fer re d to as cra m d ow n pl ans be cause they have been “c ra m m ed d ow n th e t h ro at s o f ob j ec tin g c re d ito rs .” Kham & Nat e ’s Sh oe s No. 2, Inc . v. Fi rs tBank, 90 8 F. 2d 1351 , 1359 ( 7th Ci r. 19 90)

. S ubsect i on (b) ( 1) s ta te s that, i n or der f ora pla n to be confi rm ed ove r the obj ect ion o f a cl ass ofcr edi tor s, i t m ust be “fa ir an d equit abl e, with r espect to each clas s of claim s or int erests th at is i m p aired u nd er, a n d h a s no ta c c e p t e d , th e p l a n . ” S u b s e c t i o n (b ) ( 2 ) ( A) defi ne s whatc o ns ti tu te s “ f ai ra nd e qui tabl e” t r ea tment int h e se c u re d c re d ito r c on te x t. It st at es t h at a p lan is “fa ir and equit abl e” i fi t pr ovi des: (i)( I ) that th e ho l der s o fs uchc l ai m s r et ain the l i en s secur i ng such c l ai m s, wh etherthe proper ty subj ect to such l i ens i s ret ain ed bythe debtoro r tr ansfer re d to anothe r enti ty, to the extent ofthe allow ed am ount o f su chc l ai m s; a nd ( I I ) thatea ch hol der of a cl ai m of such cl ass r ecei ve on ac co unto f su ch cl ai m defer r ed ca shpa y m en ts t o ta l i ng at l eas t th e al l owed am ount o fsuch cl ai m , o fa val ue, as o fthe e ffec ti ve dat e o fthe pl an, ofatl ea stthe v alue ofsuch hol der’ s inter estin the es tat e’ s inter esti n such proper ty;12 N os. 10

- 3597& 10

- 3598 ( i i ) f orthe sal e, subj ect to sect i on 3 63( k) o fthis t i tl e, o f any pr oper ty that i s s ubj ect to the l i ens s ecuring such cl ai m s, fre e a nd cl earo fsuch l i ens, with s u c h lie ns to att ach t o the pr oce eds o fsuch s al e, and the tr eat m ent o f su c h lien s o n p ro c e e d s u n d er cla u se (i) or (iii) of th is subparag ra ph; or (iii) for th e rea liza tio n b y su c h h old er s of th e in d u b ita b le eq u iva len t o f su c h cla im s. 11 U

. S. C

. § 1129(b)(2)( A ). Tradi ti onal l y, the m aj or i ty ofcr am dow n p lans hav e sou gh t con fi rm ation und er Sub sect ion (i i) of 1129(b)(2) (A ). Give n the detai l ed and car efully t ai l or ed l anguage used i n thi s subsect i on, i t has ra re l y been diffi cul t f or co u rts to deter m i ne wh etherpl ans qual i fy for “f ai r and equit abl e” sta tus. Pl ans that propose sel l i ng an encum ber ed ass et fre e an d c l ea ro fl i en s cou l d b e co nfi r m ed o ve rthe o bj ec ti o ns of s ec u re d cr ed ito rs so lon g a s t h e d eb to r’ s as se t s ale c om p lies w ith Sec tio n 36 3(k ) of th e C od e. Sa le s co m p ly w i th S ecti on 3 63( k) i fthey p erm i t par ti es w i th se cured cl ai m s t o “off set[ thei r] cl ai m ag ai nst the p u rc hase pri ce of[ the a sse t] ” when enter i ng bi ds to p urchase the ass et, an ar ra ngem ent that i s popul ar l y r efer re d to as cre ditbi dd i ng. An i nc r ea singnumbe ro fde bt o r s, ho wev er, ha ve b egun to se ek co n firm at ion of th eir p l a n s u n d er Su b se c tio n (iii) of 1 12 9(b )(2) (A ). B ec au se th e la n gu ag e u se d i n t h is p ro visi on i s bo th spar se and gener al, deter m i ni ng wh ether a r eorga ni zati on pl an can quali fy a s “ f ai r and equit abl e” unde rthi s su bsecti o n i s no s i m pl e ta sk

. As wr i tt en, the s tatute doe s no t pr ovi de gui dance concerni ng ( 1) wh at types ofpl ans f al lwithin Subsecti on ( i i i ) ’ s s cope o rN os. 10

- 3597& 10

- 3598 13 ( 2) wh at const i tutes the “ind ubi tabl e e quiva l ent” of a s ecure d cre dit or ’ s cl ai m . R es ol vi ng the fi rs t i ssue i s no t e a s y b e c a u s e n o th i ng i n th e t e x to fS e c t i o n 1 1 2 9 ( b ) ( 2 ) ( A) ind icates w he th er sub sect ion (iii) c an be us ed to confirm eve rytype of re or gani zati on pl an o r onl y those pl ans that f al lo ut si de th e sc o pe o f S ubs ec ti o ns ( i ) a nd ( i i )

. Re so l ving the s eco nd i ssue is diffi cul t be cause “i nd ubi tabl e e quiva

l ent” i s no t a te rm thathas been defined b y th e Code o r th e c ou rt s. In r e Pa c i

f i c L u mb e r, Co. , 5 84 F. 3d 229, 24 6 ( 5th Ci r . 2 00 9) ( no tingtha t “[ w]h atmeas ure s co ns ti tu te the in d u b ita b le e q u iva len t o f th e v alu e o f th e [s ec u re d cr ed itor’s] coll ateral are rarel y exp lai ne d i n ca se law ”). Two o fo urs i st erc i r cui ts r ec en tly i ss ue d opi ni o ns an aly zin g Se c tio n 11 29 (b )(2) (A ). P hil a delp hia New spa pers , 5 99 F.3d 29 8; P a cific L um ber, 5 84 F
. 3d 22 9. In Pac if ic Lu m ber, the F i fth Ci r cui t he l d th at a pl an th at pr o po se d the sal e o fthe debtor ’ s e ncu m b er ed as set s t o a s peci fi ed pu rchas erf oran a m ount e qual to the j ud i c i a l ly - de t er m i ned val ue o fthe ass ets qual i fi ed as “f ai r and equit abl e” unde r S ub sect ion (i ii ) of S ection 1129(b)(2)( A ). P a cific L um ber, 5 84 F.3d at2 49

. In P hil a delp hia New spa pers , the Thi rd Ci rcui t hel d, i n a 2

- 1 decis ion with one of the m em ber s o f the m aj or i ty concurr i ng i n the j ud gm ent, that a pl an thatpro posed sel l i ng the debto r’ s e ncum ber ed asset s free and clear ofl iens in a n a uc tion w he re cre ditbi dd i ng would notbe al l ow ed c ou l d quali fy a s “fa ir an d eq u ita b le” u n d er Su b se c tio n (iii). P hiladelphia N e w s p a pers , 59 9 F
. 3d at 318. Both m aj or i ty opi ni ons he ld th atS ubs ec ti o n ( i i i ) ’ s sc o pe was no t l i m i te d b y i ts ne i g hb or i ng subsect i ons and that the proce eds fro m the sale of encum ber ed ass ets const i tuted the i nd ubi tabl e eq u iva-14 N os. 10

- 3597& 10

- 3598 l en t o fthe s ec ur ed c r edi to r s’ c l ai m s. J udg e Am br o ’ s di ss en t i n P h i la delp hia New spa pers r ej ec te d b o tho fthe se c o nc l usi ons, ar gui ng that t he m aj or i ty’ s r eadi ng o fthe sta tute was a t o dds wi ththe t ex t o fthe statut e i ts el f, v ar i o us canons ofst atuto ryi nter preta ti on, the sta tute’ s l egi sl ati ve hi st o r y, i nt er es ts e xpr es se d i n o th erpa r ts o fthe Co de an d the s ett l ed expectat i ons ofl enders and bor ro w er s.
( 2) Th e Plai n La nguage of Secti on 1129 ( b)( 2) ( A ) D oes N ot Clearly A u thorize C on fi rm ation of th e D eb to r s ’ Re o r g a ni z a t i o n P l a ns W i th thi s ba ckg ro und i nfo rm ation i n m i nd , we can be g i n o ura na l y si s o fS ec ti o n 1 12 9(b) ( 2) ( A)’ s m ea ni ng i n earne st . W hen att em pti ng to deci pher the pro per i nt er pr et at i o n o fa s ta tu te , we be g i n b y de te r m i ni ng “whe th erthe l an g ua g e a t i ss ue has a pl ain a nd un ambi g uou s m ea n in g w ith reg ar d to th e p ar tic u lar d isp u te in the c ase . ” Robi ns on v. Sh e l l O i l Co. , 5 19 U
. S. 3 37, 340 ( 1997 ). W he n int er pre tings ta tu to r y l an g ua g e, the mean i ng at tr ibut ed to a phr as e “de pen ds upo n r ea di ngthe whol e st atut o r y t ex t, co ns i der i ngthe pur po se a nd c o nt ex t ofthe sta tute, and c onsul ti ng any pr ecedents o r author i ti es that i nfo rm the anal ysi s. ” Kaste n v. Sa i n t

- Gob ain Perf orm ance Plas t i cs Corp. , 131 S.C t
. 1 3 2 5 , 1 33 0 (2 01 1); see also U nited Sta tes v. Webber, 5 36 F
. 3d 58 4, 5 93 (7th Ci r . 2 00 8) ( st at i ng that “w e gi ve w or ds thei r or dinar y m eanin g u nl ess th e co nt ex t co uns el s o th er wi se ”)

. I fwe fi nd tha t th e l anguage i n a s tatute i s unam bi guous, we w i l lnotco nd uct furth e ri nqui r y i nt o i t s me a ninga nd e nfo r c e the s t a t ut e ina c c or d an c e w ith it s p lain m ea n in g. B edR o c, Ltd . v. U nitedN os. 10

- 3597& 10

- 3598 15

Give n th a tth e De b t o r s ’ a s s e t s i n th i s c a s e h a v e n o tg o ne 4 thr ough the j udi c i al v alu atio n p ro cess an d the D eb tor s’ reo rg an iza tion p lan s inv olv e u sing an au ction to d eterm i n e th e assets’ c u r r en t va lue , it is clear tha t P hil adelphia N ew spap ers i s m ore re l eva ntpr ec ede ntthan P acif i c Lu m ber

. Sta tes , 541 U .S. 17 6, 18 3 (2 00 4); Ind. Fore stAlliance, Inc. v. U ni t e d S ta t e s Fo r e s tSe r v. , 325 F.3d 851 , 857 (7th C ir. 20 03 ). Th u s, th e firs t s t e p w e m u st ta ke in re so lvin g t h is appeal i s deter m i ni ng w hether the l anguage of Secti on 1129 ( b) ( 2) ( A ) unam bi guousl y a uthor i zes the c onfi rm ati on o f r e o r g a ni z a t i o n pl a ns s uc h a s tho s e pr o po s e d b y th e D ebtors un d er Sub sect ion (i ii ). The Debtor s co ntend that the pl ai n l anguage o fS ecti on 1 1 2 9 ( b ) ( 2 ) ( A) o r d e r s c o u r t s t o a p p r o v e a ny c r a mdo wn pla n

— i ncl ud i ng thos e that propos e sel l i ng en c um ber ed asset s free and clear ofl i en s

— th at satisfi es Sub sect ion (i ii )’ s requ irem en t th at th e p lan p rovide s secu r e d c red itors w i th the i nd ubi tabl e e quiva l ent o fthei r cl ai m s. They als o a rg u e t h at th e s ta tu te ’s la n gu ag e u n am b igu ou sly i nd i cate s that a pl an thatpro vi des a secur ed cr ed itor w i th the pro ceeds fro m the sal e o fan as se t a t a n aucti on th at d oe s n otp erm i t cre d it b id d in g s at isfie s t h e in d u b ita b le equi val ence re quir em en t. I n supp or t o fthei r posi ti ons, th e D e b t o r s c ite th e m ajorit y’s d ec isio n inPh il adelphia New spa pers , r ei ter ating m any o fthe ar gum ents ar ti cul ate d i n that case . U nsurpri si ngl y, the Lend ers disa gr ee w i th 4 the Debt or s’ cl ai m s, ar gui ng tha t cr a mdo wn pl ans that s eek to sell encu m ber ed ass ets fre e a nd cl earo fl i ens m ust sat i sfy Subse cti on ( i i ) ’ s r equi re m ents and that the Debto rs ’ prop os ed sal es w oul d not pro vi de the Lend er s with16 N os. 10

- 3597& 10

- 3598

W e dis a g ree w ith the P hil adelphia N ew spap ers m ajo r i t y ’s 5 concl usi on that the use of“or” i n Sect ion 1129(b)( 2) ( A ) res olves th is is su e. P hil ade lp hia New spap ers , 59 9 F .3d at 30 5-06

. W hile Sect ion 102( 5) ofthe Co de i nd ic ates that“or” s hould be und erstoo d in t h e te rm ’ s no n-exclu sive sense, seve ral exc ep tion s to th is ru le h a v e b ee n re co g n iz ed

. S ee Ph i l adelphia N ew spap ers , 599 F .3d at 32 4 (A m b ro , J. , d iss en tin g ); L a w r e n ce P . K in g etal ., 2 C ol l i eron Bankr uptcy ¶ 1 02
. 06 ( 16 th e d. Rev. 20 11 )

. H en c e, the m ere p resen ce of the ter m “o r” is insu fficient to reso lv e this is sue. th e ind ub itable equ ivalent of th eir claim s. T he Le nd ers co nt en d tha t J udg e Am br o ’ s di ss en t i n Phil ade l phi a News papers prov ides a sup erior an alysis of S ection 1129(b)(2)( A ). W e r ej ect the Debtor s’ co ntenti ons f ortwo r eas ons. Fi rs t, like th e ba n kr u p tc y cou rt, w e find th e sta t u t o r y an aly sis ar ti cul ate d by Judge A m bro i n hi s P hil a delp hia New spa pers diss ent t o be c om pel l i ng. N othing i n the text ofS ecti on 11 29 (b )(2) (A ) d ire c tly ind ica te s w h et h er Su b se c tio n (iii) c an be u se d to co n firm an y t yp e o f p lan or if itc an on ly be use d to confi rm pl ans that pr opose di sposing o fas set s i n w ays thatcan b e d isti ngui shed fro m tho se cove re d b y Su b se c tio n s (i) an d (ii). H en c e, th er e are tw o p lau sib le 5 in te rp re ta tio n s of th e st at u te : on e th at r ea d s Su b se c tio n (iii) as h av in g g lob al a p p lica b ility an d on e t h at rea d s it as h av in g a m u c h m or e lim ite d sc op e. SeePh il adelphia New spa pers , 599 F.3d at 324 -27 (A m bro, J. , d is s e nt ing). Because, atthi s s tag e o fo ur a nal ysi s, we are l i m i ted to c on sid er in g t h e p l a i n te x t o f th e s ta tu te an d “re as on ab le m i nd s ca n differ o n t he i nter preta ti on o fS ecti on 1 1 2 9 ( b ) ( 2 ) ( A) as i ta p p l i e s t o p l a n s a l e s fr e e o fl i e n s , ” weN os. 10

- 3597& 10

- 3598 17 fi nd thatthe sta tute does not have a sing l e pl ai n m eani ng. Id. at 32 2. Acco r di ng l y, we m us t l o o k be y o nd th e te xt of Se c tio n 11 29 (b )(2) (A ) to d et er m in e w h ich o f its p os sib le i n t e r p r e t a t i o n s i s th e c o r r e c t o n e . Se cond, we f i nd t hat, e v e n i f we a n a l y z e S u b s e c t i o n ( i i i ) o fS e c t i o n 1 1 2 9 ( b ) ( 2 ) ( A) i n i sol at i o n, the t ex t o fthe pr o vi si o n do es no t una m bi g uousl y ind i cate thatpl ans s uch as th ose pro posed by the Debt or s qu al i fy fo r “f ai r and equit abl e” sta tus. S ubsecti on ( i i i ) st ate s that a reor gani zati on pl an can be c onfi rm ed ove r the obj ecti ons ofse cured cr edi to rs i fi t pr ovi des th e c re d ito rs w ith th e “ in d u b ita b le e q u iva len t” of th eir c laim s. W hat co nsti tutes the “i nd ubi tabl e e quiva l ent” of a cr edi tor ’ s s ecure d cl ai m depend s o n the am ount o f the c re dit or ’ s l i en and the curr en t val ue o fthe secur ed ass et. I fa cre dit or ’ s cl ai m is ove rs ecure d, then the i nd ubi tabl e e quiva l ent o fthe cre dit or ’ s cl ai m i s it s face val ue. Fori nstance , wh er e a cr edi torhas a $ 100, 000 l i en o n an as se t w or th $5 00 ,00 0, a re or ga n iza tio n p lan w ill on ly giv e th e c re d ito r th e in d u b ita b le e q u iva len t o f its cla im if it g i ve s i t so m ethi ngwor th$ 10 0, 000 ( e. g . , tha t amoun t i n cash or a re pla cem ent l i en f or that am ou n t o n ano ther as se t)

. I fa c r edi to r ’ s cl ai m i s unde r se cur ed, the n the in d u b ita b le e q u iva len t o f th e c re d ito r’s se c u re d cla im eq ua ls t h e c u rrent va lue of the asset

. For ins tan ce, w he re a c re d ito r h as a $ 10 0,0 00 lie n o n a n as se t t h at h as d ep re c iat ed in v alu e a n d is n ow w o r th les s t h an $1 00 ,00 0, a re or ga n iza tio n p lan w ill giv e th e cre d ito r th e in d u b ita b le equi val ent of i ts cl ai m i fthe pla n gi ves the c re dit orso m ethi ng worth the a sse t’ s cur re nt m ar ketvalue. D eterm ining th e value of an u nd ersecu red cre d itor’ s cl ai m i s probl em ati c be cause i t i s usual l y di fficul t t o18 N os. 10

- 3597& 10

- 3598 disc er n the curr ent m ar ketval ue of the types ofas set s that ar e s ol d i n cor pora te bankr up tci es. The Code r eco gn izes tw o basi c m echani sm s forso l vi ng the se types ofvaluati on pr o b l e ms: j ud i c i a lv a l ua t i o n o fa n a s s et’ s v a l ue , 1 1 U. S

. C. § 50 6( a) ( 1) , an d fr ee m ar k et va l ua ti o n o f an asset’s va l ue as esta bli sh ed i n an op en auc tion, 11 U

. S. C

. §§ 363(k), 11 29 (b )(2) (A ). Th e D eb to rs arg u e t h at, bec au se th eir propos ed pla ns would se l lthei r ass et s at an o pen aucti on an d the Le nd e r s wo ul d r e c e i v e the pr o c e e ds fr o m these sa l es , th e fr ee mar k etwi l lde te r m i ne the a ss et s’ c ur r en t val ues a nd the Lend er s wil lr ecei ve the ind ubi tabl e e quiva

l ent o fthei r secur ed cl ai m s. The Debtor s’ ar gum ent i s fl aw ed, however, bec ause of th e in c on gr u ity b e t w ee n th e a u c tio n s p ro p os ed in the pl ans a nd tho se re cog n ized el sewhere i n the Code. I n or der t o aucti on o ffan e ncum ber ed ass et fre e a nd cl ear ofl i ens under Se cti on s 363( k) o r 1129 ( a) ( 2) ( B)( i i ) , f or i nstance , the Code re quir es that parti es w ith s ecure d i nter est s in the ass ets be perm i tte d to cre ditbi d. By gr anting secu red pa rties this abil ity, the C od e p rovide s lend ers w i th m eans to prot ect them sel ves fro m the ri sk that the winni ng auct i on bi d wil l not capture the ass et’ s a ctual val ue. I fa se c u re d l ender feel s that the bi ds that have been subm i tte d i n an a ucti on do no t a ccurat el y r efl ect th e t ru e v alu e o f th e a ss etan d th at a sa le at th e h igh es t b id pri c e w oul d l eave them undercom pensated, then they m ay use thei r cre ditto t ru m p the exi sting bi ds and take posse ssi on o fthe ass et. In ess ence, byg ra n ting secur ed cred itors the right to cred it bi d , the C od e prom ises l en d ers that thei r l i ens wil lnot b e ex ti ngui shed f orl ess than face value w ithou t th eir con sen t. T his p rotection is i m p or-N os. 10

- 3597& 10

- 3598 19

M ul t i pl e f a c t or s c on t r ibute to the r i s k tha ta n a s s e twi l l be 6 u n d er v a lu ed in su ch sa le s. F ir st, th e sp ee d an d tim in g o f a b a n k r u p t c y a u c t i on o ft e n r e s u l t s i n u n de r v a l u a t i o n . L o r i e R. B ee rs , P re p a rin gth e D ist re ss ed C o m p a n y forS a le, A m . B an k r. Inst. J
. 44 , 45 ( Aug. 26 , 20 07 )

. Se c ond, an d cl os el y r el at ed, i s the in a b ili ty to p ro v id e su ffici en t n o tic e t o in te re ste d p a rt ie s. Seei d. at69 ( ex plain ing thatbe c aus e offi nan c i al c ons t ra i nt s , the dev el opm ent off orm al m arketi ng m ater ial s and noti ce to prospect ive buy ers i s often abb reviat ed, res ulti ng i n a s horter li stofi nter es ted parti es and t h er eb y reducing the c hance that the s a l e w i l l r e s ul ti n ful l r e a l i z a t i ono fthe a s s e t ’ s va l ue )

. Th i r d, t he r e i s a n i n h e r e n tr i s k o fs e l f

- de a l i n g o n th e p a r to fe x i s t i ng m ana ge m en t
. W e have r ec ogni ze d thate xi s t i ng m ana ge m en t m ay ha v e an incen tiv e to fav or “w hite k nig ht” b id d ers fav or ab ly dis po s e d t o pr e s e r vi ngthe e x i s t i ngbu s i ne s s o ve r o the rs w h o m i g h t e n t er h ig h er b id s. SeeDyn ami c Corp. of A m . v. C TS C orp. , 80 5 F .2d 705 , 7 1 1 ( 7th C ir. 19 86 ). Fo u rth , w hile the cre dit m arkets are m o re recentl y show ing s igns ofrepair, the y rem ain in a state o f lim ited liqu id ity. L iqu id ity co nstra ints are likely to k eep m an y p o t e ntia l bid d ers on the sid eline s, g rea tly re d u cing the ch an ce tha t com p etitiv e b id d i ng w ill occur. Finall y, the f act that bidd ers m ust expend theirres ources w he n pu tting tog eth er a b id an d are likely to tak e th ese c os t s i nt o c ons i der at i on when s et t i ng the val ue ofthe ir bi ds i nc re as es th e ch an c e thatthe as s et ’ s s al e pri c e wil l no t re fle ct its ac tu a l v a lu e. S ee V ince n t S . J. Bu ccol a & A shl ey C . K el le r, Cre di t Bi dd i ng a nd t he De s ign o f Bank r uptcy A uc t i o ns , 18 Geo. M as on L. Rev. 99 , 12 1 ( 20 10 ) ( not i ng thatane s t at e is (co n tinu ed ...) ta nts i nc e the r e a r e numbe roff ac to r s tha t cr ea te a s ubs ta ntia l r isk that ass ets so l d i n bankr up tcy aucti ons w i l lbe un de r v a l ue d. 620 N os. 10

- 3597& 10

- 3598

(

. . . conti nued) 6 u nlik ely to rea lize the e ntire v alu e of a n a sset be cau se b id s w ill ta k e i n to ac co u n t th e b id d er s’ fin a n ci n g co sts ). Bec au se the De bt o r s’ pr o po se d a uct ion s woul d de ny secur ed l enders the abi l i ty to cre ditbi d, they l ack a cruci al check aga i nst underva l uati on. Consequentl y, ther e i s a n i nc r ea se d r i sktha t th e wi nni ngb ids in the se a uct i o ns w oul d not p ro vi de the Lend er s with the curr ent m ar ket val ue o fthe encum ber ed a ss et s. N othing i n the text of Se ction 112 9( b) ( 2) ( A ) i nd i cate s that pl ans that m ight provi de sec ured l enders w i th the i nd ubi tabl e e quiva l ent o f thei r cl ai m s ca n be confi rm ed unde rSub s e c ti on ( i i i )

. H ence, w e fi nd tha t a pl ain- m ea ni ngr ea di ngo fS ubs ec ti o n ( i i i )’ s te xt do es no t es tabl i sh th ati t ca n b e us ed to c o nfi r m pl an s that propos e a ucti oni ng o ffa debtor ’ s e ncum ber ed ass ets fre e a n d cle ar of lien s w ith ou t a llow in g c re d it b id d in g.
( 3 ) Th e B e t t er Int er pret a t i o n o f Se c t i o n 1129 ( b)( 2) ( A ) ( i i i ) D oes N otP erm i tConfi r m at i on oft he D ebto r s’ Reor gani zat i on Plans Un der S u b sec ti on ( ii i) B ecau se th e tex t of Section 1 1 29(b)(2)( A ) su ggests m ore than on e plausibl e underst anding ofthe sta tute, we m ust ap p l y wel l

- est abl i shed pri nci ple s o fst atuto ryi nter preta
ti on t o deter m i ne wh i ch ofthes e understandings i s s up er i o r . I n g e ne r a l, c a no ns o f s t a t ut o r y c o ns t r uc t i on ur ge cou rts to i nt erp ret statu te s i n w ays th at m ake every p art of th e s ta tu te m ea n in gfu l. TRW In c . v . An dre ws , 53 4 U.S

. 19 , 31 ( 20 01 )

. Int er pr et at i o ns tha t r es ul t i n pr o vi si o ns b eingN os. 10

- 3597& 10

- 3598 21

su p er flu ou s a re h igh ly d isfa vo re d

. Id. Fur ther, wh en deci ding between co m peti ng und er sta nd i ngs of a s tatute, cou rts often con side r the objectives of th e larger stat ut ory sc he m e an d s el ec t th e m ea ni ngthat “ p roduce s a su bs ta ntiv e effec t th at is com p at ible w ith th e res t of t h e law .” U nited Sa v. A ss’n o

f Tex. v. Tim bers o

f I n w o o d F o rest Ass oc s . , Lt d. , 484 U .S. 36 5, 37 1 (1 98 8); Koons Bui ckPont i ac G M C, Inc. v. N igh , 543 U

. S. 50, 60 (2004). The Debtor s’ proposed i nter preta ti on o fS ecti on 1129 ( b) ( 2) ( A ) vi ol ate s a car dinal rul e o fst atuto ryco nstr uct i o n. On e o f the b a s i c t e ne t s tha t c o ur t s f o l l ow w hen in te rp re tin g a m b igu ou s t ex t s ta te s t h at “a st at u te ou gh t .
.

. t o b e s o c o ns t r ue d tha t, i f i t c a n b e pr e v e nt e d, no cl ause, s e n t e n c e , o r wo r d s ha l l b e s up e r f l uo us , v o i d, ori nsi gni fi cant. ” D un ca n v . Wa lk er, 533 U
. S. 167, 174 (2001 ). The fi rs t tw o Subse cti ons of 1129 ( b) ( 2) ( A ) se t fo rth the s peci fi c co nd i ti ons that re or gani zati on pl ans that s eek to sel lencum ber ed ass ets in p ar ti cul arm anners m ust m eet
. Subse cti on ( i) sets f or th r equi re m ents that apply to al lpl ans where the debt or seeks to r eta i n posse ssi on o f o rs e l la n encu mbe r e d a s s e twi th the l i e ns a t t a c he d. Su b se c tio n (ii) se t s fo rt h req u ire m en ts th at ap p ly to all pla ns that see k to sel l an encum ber ed ass et fre e an d cle ar of l i ens. The Debto rs pro pose that w e s houl d rea d Subsec

ti on( i i i ) a s s t a t i ngtha ta nyp l a n tha ts a t i s fi e s a g ener al r eq ui r ement

— th e i n d u b i t a b l e e q u i v al en ce s ta nd ard

— shoul d be g ra nted “ fai r and equit abl e” sta tus. U n d erthei r i nter preta ti on, pl ans co uld qual i fy fortr eat
m ent under Su b se c ti on ( i i i ) ev en i ftheyse ek to dispos e o fe nc um be r ed as se ts i n the way s di sc us se d i n S ubs ec ti o ns ( i ) and ( i i ) , but f ai l to m eet these S ubsect i ons’ r equi re m ents.22 N os. 10

- 3597& 10

- 3598

This i nter pretat ion wo uld als o violat e the canon ofs tatutory 7 con stru c t i o n th at states tha t w he n “ the re is an in escap ab le confli ctbetween general and s pecific
. . . p rovis ions o fa statute, the spe c i fi c w ill pre v ail.” N or m an J
. Sin g er & J .D

. Sh am b ie S i ng e r , 2 A Sut he r l a nd St a t ut e s & St a t ut o ry Co ns t r uc t i o n § 46: 5; seea l so B l oate v. U n i te d S tat es , 13 0 S. Ct

. 13 45 , 13 54 ( 20 10 ) ( s t at i ng that“general langu age ofa s tatutory prov is ion, al though b road en ough t o i nc l ude [ a m at t er ] , w ill n otbe he l d t o a ppl y t o a ma t t e r s p e c i fi c a l l y d e a l tw i th i n a n o th e r p a r to fth e s a me e n a c t me n t ” )

. A l l o w i n g p l a n s t o u s e S u b s e c t i o n ( i i i ) t o a c c o mplis h a s ale free ofl ie ns withou t ac cording le nd ers the procedu r a l p r ot e c t i o n s p r e s c r ib e d b y c l a u s e ( i i ) “ p l a c e s th e t wo c l aus es i n con fl i c t ” and w oul d al l ow the gene ra l to s ubs um e the sp ec ific

. In re P hil adelphia N ew spap ers , 55 9 F .3d a t 3 2 9 (A m b ro , J. , d iss en tin g ). T h is u n d er st an d in g of S ec t i o n 11 29 (b )(2) (A )(iii) is una cc ept ab l e b e c a u s e i two ul d r en derthe o th ers ubs ec ti o ns ofthe sta tute superfl uous. I f, as the Debtor s pro pose, 7 S ubs ec ti o n ( i i i ) pe r m i ts a de bt o rt o s el la n a ss etfr ee a nd c lea r of lien s w ith ou t p er m itt in g c re d it b id d i n g , t h en it is d ifficu lt t o s ee w h at, i f an y, sig n ifica n c e Su b se c tio n (ii) c an h av e. Sim ilar ly, th e D eb to rs ’ int er p re t a t i o n w ou ld p er m it p ro p er ly-d es ign ed r e o rg an iza tio n p lan s t o s ell encum ber ed ass ets witho ut sa ti sfying the co nd i ti ons set f or th i n Subse cti on ( i )

. W e ca nnot c oncei ve ofa re aso n w h y C on gr es s w ou ld s t a t e t h at a p lan m u st m ee t c er ta in r equi r ement s i fi t pr o vi des f o rthe sa l e o fa ss et s i n pa r ti cul arways and t hen i m m edi ate l y abandon these r equi re -N os. 10

- 3597& 10

- 3598 23

I nd e e d, the l e gi s l a t i ve h is t or y f orS e c t i on1 1 2 9 ( b) ( 2 ) ( A) 8 indicat es thatSubsect ion ( ii i) w as int ended to apply to plans that prop ose tr eati ng the es tat e’ s en cum bered ass ets i n w ays that a re d iffer en t fro m th o se co v er ed b y S u b se ct io n (i) a n d (i i). In re Ph i l adelphia N ew spap ers , 55 9 F .3d a t 3 35 -36 (Am b ro , J. , d issenting) (re view ing the congres si onal re cord and noti ng that neither of the exam ples of plans that a court could confir m u n der clau se ( iii)

— aba ndonm en tofthe e nc um be r e d a s s e to rpr ovi di ng the se cured cr editor w ith a re placem ent li en on s im il ar coll ater al

— overlap w ith plans thatcould be confir m ed un der S u b se ct io n s (i) a n d (ii)). m en ts in a sub seq ue nt sub s e c t ion
. Th e infinitely m ore 8 p lau sib le in te rp re ta tio n of Se c tio n 11 29 (b )(2) (A ) w ou ld read each sub s e c t ion as stating the req uirem en ts for a p articu lar typ e of sale and “con st r u ing each of th e [] su bp aragrap hs

. . . [as con clusively g overn ing] the cat egory ofpro ceedin gs i t a dd re sse s. ” B lo a te v. U nited Sta tes , 130 S. C t. 13 45 , 135 5 (2 01 0). U n d e r s u c h a re ad in g, p lan s c ou ld on ly q u alify as “fa ir an d e q u ita b le” u n d er Su b se c tio n (iii) i ftheypro posed di sposing o fas set s in w ays thatare not d escribed i n Su bsec tions (i ) an d ( ii ). A l so counsel i ng ag ai nst the Debto rs ’ i nter preta ti on o f Se cti on 1 129(b) ( 2) ( A ) ( i i i ) i s the f act th at i t t re ats se cured cr edi to r s’ i nt er es ts i n a w aytha t sh ar pl y c o nfl i ct s wi ththe w ay that these i nter est s are tr eat ed i n other parts o f the Code. A re vi ew of the “ sect i ons ofthe Code re l ate d to pla n sal es ofencum ber ed proper ty fre e ofi ts l i ens, as w el las se cti ons concerni ng the prote c ti on a ff or ded to secur ed cr edi tor s, ” r eve al s that the C ode has an exp re sse d i n t e r e st in in su rin g t h at se c u re d cr ed ito rs are p ro p er ly24 N os. 10

- 3597& 10

- 3598

c om p en sa te d

. P hil a delp hia N ew spa pers , 59 9 F
. 3d at 331 ( Am br o , J
. , d i ss en ting )

. F o ri ns ta nc e, S ec ti o ns 3 63 ( k ) a nd 11 29 ( b) ( 2) ( A)( i i ) pr o vi de a secur ed cr edi to rwi ththe r i g ht to cre ditbi d w henevera debtorat tem p ts to se l lthe ass et th at se c u re s it s d eb t fre e a n d cle ar of its lien

. Id. S i m i l ar l y, S ec ti o n 1 11 1(b) pr o vi des s ec ur ed cr edi to r s wi thmean s to prot ect their cla i m s when a debto r see ks to re t a i n p os se ss ion of an en c u m b er ed as se t. Se eIn re68 0 Fifth A ve. A ssoc s. , 29 F. 3d 95, 97- 98 ( 2d Cir

. 19 94) ; Law re nce P . Kingetal

. , 7 Coll i e ron Bankr upt cy ¶ 1 1 1 1

. 0 3 ( 1 6 th e d. R ev . 201 1). Inco n tr as t, th e C od e d oe s n ota p p ea r to co n ta in an y p ro vis ion s th at r ec og n ize a n a u c tio n s ale w h er e c re d it bi dd i ng i s unavai l abl e a s a legi ti m ate way to di spose o f encum ber ed ass ets
. Because the Debt or s’ inter preta ti on ofS ecti on 1 129(b) ( 2) ( A ) would not provi de sec u red cred itors w ith th e typ es of protect ions th at th ey are gener al l y a ccor ded el sewhere i n the Code, thei r i nter preta
ti on i s l ess pla usibl e than a const ructi on o fthe sta tute that r ea ds S ubs ec ti o n ( i i ) , whi cho ffer s th e st an dar d pr o te ct i o ns to c r e d i t o r s , a s p r o v i d i n gth e o n l y wa y f o rp l a n s s e ek i ng t o s e l l en c u m b er ed as se ts free an d cle ar of lien s t o ob ta in “f ai r and equit abl e” sta tus. P hil a delp hia New spa pers , 59 9 F.3d at 331 ( A m bro, J. , dissen ting). Because the Debto rs ’ sugg est ed re adingo fS ubsect i on (i ii ) w ou ld n ulli fy its neighb oring sub sect ions an d i gn ore the pr ote cti ons f orse cu re d cre dit or s r eco gni zed i n other Code pr o vi si o ns , we r ej ec t th ei ri nt er p retati o n o fthe sta tute. Instea d, w e find that the Code r equi re s that cra m dow n pla ns thatco ntem pla te sel l i ng encum ber ed as se ts fr ee a nd c l ea ro fl i en s ata n a uct i o n s at i sfy the re quir em ents setf or th i n Subse cti on ( i i ) o fthe sta tute.N os. 10

- 3597& 10

- 3598 25 I I I . Concl usio n Fo r th es e re as on s, th e ru lin g of t h e b an kr u p tc y c ou rtis A FFI RMED

6- 28- 11