Opinion ID: 548396
Heading Depth: 1
Heading Rank: 3

Heading: Citizens' Impaired Status

Text: 20 Bustop correctly asserts that the plan could still be considered under the cram-down provisions of section 1129(b) if we find that Citizens' loan to Bustop is impaired within the meaning of section 1124. The Bankruptcy and District Courts held that Citizens' loan was not impaired because the plan, while allowing the property securing the loan to be transferred to Creative Displays, did not require Creative Displays to assume the obligation to pay the note and did not extinguish Citizens' right to proceed against Bustop to collect the loan. 21 We agree with Bustop that Citizens' loan would be impaired as a matter of law if Bustop's obligation to pay the loan was extinguished and a different party substituted to assume the payments. See In re Barrington Oaks General Partnership, 15 B.R. 952, 956 (Bankr.D.Utah 1981); 5 Collier on Bankruptcy, paras. 1124.03 and (15th ed. 1988). But, as the Bankruptcy and District Courts correctly found, the plan does not require Creative Displays to assume the obligation and does not extinguish Bustop's obligation to pay on the loan. It is merely anticipated that this obligation shall be assumed by Creative Displays. 9 Unless the plan provides that Creative Displays is bound and limits Citizens' right to proceed against Bustop, then the plan leaves unaltered the legal, equitable, and contractual rights to which such claim ... entitles the holder of such claim or interest. 11 U.S.C. Sec. 1124(1). Even were the plan found to bind Creative Displays, the mere fact that Citizens gains an additional obligor on the loan does not require a finding of impairment unless the rights Citizens has vis-a-vis Bustop are in some way altered.